EU Regulators Give Microsoft Another Deadline

Regulators from the European Union (EU) say Microsoft (Nasdaq: MSFT) continues to lag in its compliance with the conditions of its antitrust ruling and have again set a deadline for the software giant to make changes or face additional monetary penalties.

European Commissioner Neelie Kroes has given Microsoft until Nov. 23 to meet the requirement that it supply competitors with access to its communications protocols -- intended to make it easier for them to make Windows-compatible server software -- before it faces another round of fines that could be up to US$3.8 million per day.

"As of today, the Commission has not received the complete documentation regarding all relevant protocols that is required to comply with its March 2004 decision," EU commissioners said in a statement on Wednesday. "The Commission expects the remaining omissions and deficiencies in the technical documentation to be remedied by Nov. 23 so that by the end of November the entire set of technical documentation will be available for potential licensees to review."

Microsoft said it was working to provide additional documentation in the hopes of satisfying regulators by the end of that time frame.

"We stand ready to do any additional work that is required to comply with the Commission's decision," the company said in a statement.

Peace Ahead?

Any additional fines would be retroactive to the end of July and as a result would likely push the total payout from Microsoft to the EU regulatory body well over the $1 billion level. The 2004 decision came with a record $600 million fine and more recently, the software maker was hit with another $300 million in penalties for not meeting time frames for sharing its code and protocols.

Regulators said they would review what Microsoft files by the deadline and consult with both competitors, who have been among the most vocal critics of past attempts by Microsoft to offer code licensing, and a third-party trustee that has been assigned to review the documentation.

The code-sharing requirement has become the most hotly contested part of the Commission's March 2004 ruling, which included the hefty financial penalty as well as the requirement that Microsoft make available a version of the Windows operating system that did not include the Media Player software. Microsoft now offers that alternative version in Europe.

Microsoft has made several passes at attempting to satisfy regulators. Early efforts were deemed too complex and expensive to be worthwhile for competitors, who want to use the information to make their products operate smoothly with Windows deployments. Microsoft has said it has spent millions compiling the code needed to comply with the requirement, with scores of engineers dedicating time solely to the project.

Getting to an agreement on the protocols may make moot Microsoft's appeal of the original decision. The second-highest court in Europe has heard that case and is expected to rule early in 2007.

The View on Vista

Many of the Microsoft competitors who helped start the EU antitrust action more than seven years ago have since settled with Microsoft, but that has not made regulators there any less aggressive in dealing with the company, Yankee Group analyst Laura DiDio told the E-Commerce Times.

Microsoft has had more success in striking a cooperative tone with regulators in the U.S., she added. "The EU has shown it is not backing off of its stance, regardless of what's gone on with the companies that helped start the investigation," DiDio noted.

The latest tussle with the EU comes at a time when Microsoft is hoping to keep its focus on new product launches, with business versions of Windows Vista now reaching customers, the iPod-killer Zune hitting stores and the consumer version of Vista due out early in 2007.

Microsoft had warned that regulatory issues in Europe and Korea could delay the launch of Vista in some markets, but more recently said it would go ahead with plans for a worldwide launch. It also made some changes meant to mollify regulators, including modifying Vista to make it more compatible with third-party security software.