Microsoft Fires Back at EU Regulators as Deadline Approaches

Threatened with massive fines, Microsoft sent an 11th-hour response on Wednesday to EU demands that the US software giant prove it was not abusing its dominant market position.

As the clock ticked down to a midnight deadline, Microsoft sent a detailed but clearly irritated 75-page response to the European Commission, which polices competition issues in Europe.

Fuelling fears of a future showdown, critics said the software giant's answer suggested that it had no intention of complying with the commission.

In its reply, which Microsoft said provides clear evidence that it fully complies with the demands, the firm accused the commission of ignoring key information and denying it due process to defend itself.

Attack is the best form of defense

"Similarly, the response demonstrates that the commission repeatedly refused to clearly define its requirements and concerns, despite repeated requests and accommodations by Microsoft," it added.

And in what appeared to be a complaint about the findings of the trustee in the case -- an independent expert endorsed by the company -- it also filed "two independent expert reports by software system engineering professors."

"We conclude that the interoperability information as provided by Microsoft meets current industry standards, particularly in such a complex domain," the five professors said a separate 45-page document.

It's not over till it's over

The commission said in a statement that it would "consider carefully the response that Microsoft filed."

"It is of course the European Commission that will decide whether Microsoft is compliant with the March 2004 decision, and not Microsoft," it added.

The dispute relates to a move to fine the software group a record 497 million euros ($588 million) for abuse of its market position.

Microsoft was also ordered to sell a version of its extremely popular Windows operating system unbundled from its Media Player software and to divulge information on its operating system needed by manufacturers of rival products.

The US giant is hoping to get the ruling annulled in an appeal due to go before the European Court of First Instance, the EU's second-highest court, in the last week of April.

A prelude to the showdown

The commission is increasingly impatient for evidence of compliance with the ruling and turned up the heat in December by threatening to slap a daily fine of up to two million euros on the company.

"The decision on whether or not we need to impose these daily fines will be taken in the light of the information received from Microsoft," commission spokesman for competition issues Jonathon Todd said earlier.

The total fine, which would be back-dated to December 15 if levied, could amount to more than 100 million euros. Todd said any decision could come about three weeks after an oral hearing that the company has requested.

Microsoft's compliance: a Potemkin village?

Microsoft announced late last month with much fanfare that it would license parts of the source-code for Windows in hope of laying to rest EU regulators' concerns that is not doing enough to comply with the 2004 antitrust ruling.

But Todd said it would have to explain why that was helpful to competitors.

The Free Software Foundation Europe was pessimistic about Microsoft's reply.

"The company does not plan to comply," concluded FSFE spokesman Joachim Jakobs. "They are complaining against the trustee that they have proposed themselves.

"Microsoft wants to protect its monopoly by any means," he added.