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A question of anti-trust

This article is more than 18 years old
Microsoft's latest rebuff to the European commission's monopoly ruling threatens values at the heart of democracy, critics say. David Gow reports

A new front opened in the six-year war between Microsoft and the European commission last week. The endgame is uncertain, as regards both timing and outcome, but the enormous scale of the stakes are clearer: Brussels is challenging the entire basis of the group's business strategy and model. It is determined to change them.

With the US department of justice (almost) out of the picture following its 2002 settlement and most of Microsoft's once-litigious rivals either out of business or bought off, the commission sees itself as a lonely David fighting Goliath, aiming its sling at the group's quasi-monopoly. It wants to force it to face genuinely free competition.

Last Wednesday, Microsoft raised the ante yet again. The world's biggest software maker not only defied Brussels on the central issue of making servers running its Windows operating system interoperable with rival versions but challenged the authority and integrity of an independent trustee - charged with monitoring its compliance with an anti-trust ruling - it is, albeit reluctantly, co-sponsoring.

Almost two years ago, the then EU competition commissioner, Mario Monti, levied a record fine of €497m (£340m) on Microsoft for abusing its dominant position in the PC operating systems market: it had been leveraging its near monopoly on to markets for work group servers and media players.

Mr Monti demanded "remedies" - forcing Microsoft to disclose "complete and accurate" interface documents to enable rival servers to achieve full interoperability and to make available a version of Windows without a media player.

Twenty-three months later and, after court hearings, voluminous correspondence, private meetings between Neelie Kroes, Monti's successor, and Steve Ballmer, Microsoft chief executive, colossal lawyers' bills and millions of man-hours, the paramount issue of interoperability is unresolved. And, therefore, the threat of daily fines of €2m - backdated to mid-December - draws closer.

Microsoft argues that Brussels has wilfully ignored copious evidence of its compliance and, moreover, denied it due process - raising the prospect of yet another legal battle. In a 75-page assertion of its complete compliance with Mr Monti's March 2004 decision, it insisted it had gone beyond the commission's mandatory remedy and opened up (part) of the ultra-secret source code behind Windows to rivals willing to pay a - yet to be agreed - licence or royalty fee.

It attached a 49-page report from five computer science professors - British and German - wholly at odds with the findings of Professor Neil Barrett, the monitoring trustee, that the technical information Microsoft had supplied was "fundamentally flawed" and "totally unfit". But the report refused to name the academics and it transpires that at least one of them was nominated by the group to be the trustee - and rejected as he had worked for Microsoft in the past.

For Georg Greve, president of the Free Software Foundation Europe and one of the strongest of the commission's few backers, this latter response was "outrageous" in its implication that Prof Barrett was "biased". But for Mr Greve the stakes are even higher: as a spokesman for the "open source" software community, he sees the struggle between Brussels and Microsoft as a war for the soul of society and democracy itself.

"This is a conflict of approaches and models. Free software is not a single company or product, it's a fundamentally different approach to working with software and the computer industry as a whole: in upholding the freedom of competition we're asserting the values of a democratic society," he said.

Mr Greve, who accuses Microsoft of constantly trying to "wriggle out of its obligations", added: "They should comply and stop ignoring the commission and pretending they are above the law, because they are not. What's in it for them is money, control, power - the ability to leverage their monopoly on the desktop into new markets such as mobiles and set-top boxes."

The "open source" community is built around the Linux operating system, which, Mr Greve says, is increasingly popular with companies such as Sun, Hewlett-Packard, Intel and IBM as well as with governments. South Korea has recently announced plans to set up a university dedicated to developing Linux programmes.

But Mr Greve says: "Destroying Microsoft is not our objective at all. I believe they will learn eventually if they are forced to learn. As long as they put themselves above justice, politics and regulation, they have to be pinned to the ground ... When companies have desktops running on Windows, they have no choice but to use Microsoft servers. But if they choose to buy a new Linux server, they can help clients ... choose different desktop systems."

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