No Microsoft vendetta, says Kroes

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The war of words between Microsoft and the European Commission over the software group’s new flagship product has escalated, with Neelie Kroes, EU competition commissioner, denouncing what she calls “a co-ordinated campaign” to discredit the regulator.

Ms Kroes, in a letter to the Financial Times, insists that the Commission is not conducting a “vendetta” against Microsoft. Brussels, she says, is simply trying to ensure that Vista, the operating system set to replace Microsoft Windows next year, complies with EU competition rules.

The Commission is concerned about Vista because it bundles a string of new programmes and functions into the operating system, for example an internet search engine and a fixed-document reader.

It fears that the product will undermine competition from software makers that sell similar products on a standalone basis.

Microsoft warned last week that the Commission’s actions could delay the launch of Vista in Europe, and could even prevent the group from improving the security of the new operating system.

The group has also published a study claiming that Vista will create thousands of new jobs in Europe and boost other companies’ revenues.

But Ms Kroes says in her letter: “I have seen it suggested that the Commission may seek to prevent Microsoft from improving the security of its operating system. This is categorically not the case. We do nevertheless seek to ensure that rival security software vendors . . . are able to compete on a level playing field.”

She adds: “Similarly, I have noted attempts to link the ongoing Vista discussions to the purported creation of jobs in Europe that a Microsoft-sponsored study claims will result from Vista, It would be wrong to imagine such a link. If jobs are to be created as a result of Vista’s release, any such job creation would only be enhanced with the release of a version of Vista which allowed others to compete on the merits of their products.”

Ms Kroes also disputes complaints that the Commission failed to issue sufficient guidance showing how Microsoft could avoid new antitrust trouble on Vista.

Microsoft said yesterday: “We look forward to constructive discussions with the Commission that we hope will yield clarity on how we should proceed.”

The Commission’s concerns regarding Vista are based on its landmark ruling against Microsoft in March 2004, when it found the software group had abused its dominant market position and imposed a record €497m ($630m) fine.

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