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Microsoft made a concession in its six-year dispute with European competition regulators on Wednesday by offering to give rivals access to parts of its Windows source code.

With only three weeks until a compliance deadline set by Brussels, which had threatened fines of €2m ($2.5m) a day, Brad Smith, the group’s general counsel, said: “We are putting our most valuable intellectual property on the table.”

However, while the software giant said the move went beyond the Commission’s requirements, rivals were quick to say it fell far short of the demands on Microsoft. The Commission refused to say whether the offer was good enough.

Microsoft’s offer, which it hopes will remove the threat of fresh financial penalties, came in response to a European Commission warning last month that it would impose fines unless the software group complied quickly with Brussels’ 2004 antitrust ruling against the US group. The daily fines would come on top of the record €497m payment the Commission ordered in 2004.

The regulator said Microsoft had failed to comply with a part of the ruling requiring the software group to share information about its Windows operating system. That information, the Commission argues, is essential for rivals wanting to develop software that works with Windows-driven computers and servers.

Microsoft argues that in giving away a part of its source code – the basic programming instructions that form the core of the operating system – it has gone beyond the Commission’s demand. But rivals say that instead it has dumped a vast amount of data on companies without the “road map” that tells them how to use it. The regulator did not, however, order Microsoft to release parts of the Windows source code.

In an attempt to end months of wrangling over the extent of the information required by the decision, Microsoft said it would license the relevant parts of the Windows source code.

Mr Smith said: “We have come to the conclusion that the only way to be certain of satisfying the Commission’s demands is to go beyond the 2004 decision and offer a licence to the source code of the Windows server operating system.”

Microsoft’s rivals dismissed the group’s offer. Thomas Vinje, a partner at Clifford Chance, who represents several Microsoft rivals, said the move was a
“PR ploy”. He added: “Microsoft is offering to dump a huge load of source code on companies that have not asked for source code and cannot use it. Without a roadmap that says how to use the code, a software engineer will not be able to design interoperable products.”

Mr Smith had pointed out that the group had drawn up 12,000 pages of interoperability information for potential licensees, and had offered free advice on how to use the technical specifications contained on those pages.

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