What’s Going On?

Europe’s Court of First Instance is about to render its decision in the case of The European Commission v. Microsoft. It’s gonna be a nail-biter.

As I have probably mentioned before, one of the challenges in writing a column like this is making it timely. Deadlines typically come about sixty days before the article goes to print, and therein lies the rub. If the subject is something happening at the time I am writing, it becomes a bit stale by the time it hits print. If I try to anticipate what’s to happen, I’m guessing about the outcome. However, there are occasions when, regardless of the possible outcome, it is worthwhile to look into events yet to occur. This is one of those times.

On September 17, the Court of First Instance in Europe will have rendered its decision in the competition case brought by the European Commission against Microsoft. The case revolves around Microsoft’s dominance of the work group server market (the market for servers that support groups of desktop clients), bundling of technologies, and using that bundling to leverage Microsoft’s dominance into other markets. It is a complicated case involving issues of changed behavior (the fact that up until about ten years ago Microsoft would willingly share program interface and protocol information and then chose to stop), diverted standards, proper remedies (all of the effort that has gone into forcing Microsoft to produce adequate protocol documentation), and significant fines. The case has pitted the world’s largest software company, a company that has already been found to violate competition laws in the United States and elsewhere, against a government agency determined to establish its authority to assure that consumers in Europe benefit from competition.

As an individual who has closely followed and even participated in some of this process, I have been even more fascinated by the artful efforts by Microsoft on the fringes of the fight. Take for instance, the tug-of-war that is going on over document formats, ODF vs. OOXML. Seeing the bigger picture, one comes to understand that this is a battle within a battle. The ODF side is truly intent on opening up document formats, but it wouldn’t mind seeing Microsoft’s dominance of the desktop eroded. Microsoft (I would say the OOXML side, but there are few who have lined up behind OOXML other than those companies substantially beholden to Microsoft) through its OOXML efforts wants to paint a picture of a company truly supportive of open standards. Success in this arena helps Microsoft in two ways: It supports their continued dominance of the desktop, and Microsoft’s Open Specification Promise provides Microsoft a credible argument that it is willing to share interoperability information on reasonable terms, for the OOXML specification is covered by that promise.

One need not have dealt with Microsoft for a long time to realize that the story doesn’t stop there. Microsoft is not likely to limit its implementation of OOXML to only that which is contained in the specification. As in the past with other protocols and specifications, one can expect Microsoft to extend its implementation beyond the OOXML standard to include proprietary technology, likely covered by patents. Thus, the OOXML standard is rendered moot as a meaningful specification (the dominant player in the market does not strictly use it), and the Open Specification Promise is rendered worthless since it is strictly limited to the OOXML specification and not the expected Microsoft extension of the specification. In the meantime, through the OOXML effort, Microsoft attempts to legitimize its claim that it is a willing and open participant in open industry standards, thus appealing to governments, businesses, and consumers in Europe that Microsoft plays by fair rules.

You be the judge on that one.

Another effort by Microsoft in the context of the European proceedings is their claim the European Commission is denying Microsoft the value of its intellectual property rights by forcing Microsoft to disclose highly valuable, proprietary protocols. Microsoft asserts it should have the right to be paid for those protocols and the intellectual property (read, patents and trade secrets) incorporated in them. However, there are a few problems with this line of reasoning.

1.Why is it that Microsoft can make a specification (OOXML) available at no cost when we know it is covered by at least one patent (see, for example, http://www.noooxml.org/patents)? Why is that patent (or those patents) not as valuable as the patents Microsoft claims to be implicated by the protocol disclosures mandated by the European Commission?

2.Not all national laws, and particularly not all national laws in Europe, consider trade secrets to be a form of intellectual property.

3.By what standard do intellectual property rights, which are a public grant of monopoly, trump competition law, which exists to protect the public? If patents are misused in a manner to maintain or extend an illegal monopoly that has been achieved through means other than the mere application of patents, why shouldn’t such misuse come into question?

These are just a few of the examples of the comprehensive strategy Microsoft is pursuing to maintain its dominant position.

So what is the relevance of all of this to Linux and open source? Many, and particularly the competition authority in Europe, believe that open source stands as the last, best hope that competition will return to the software industry. If open source software is not permitted to compete on an open, level playing field, Microsoft’s dominance will be sustained, and Microsoft will be in a position to leverage that dominance to new market after new market.

So the decision by the Court of First Instance on September 17 will have been pivotal. The Court will not have rendered the final verdict in this case unless it decides to side with Microsoft. A win by Microsoft, and you will likely see a level of aggressive behavior that makes past behavior pale in comparison. A win by the Commission, and the fight goes on.

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