Microsoft said it will fully comply with all of its obligations under the European Commission's landmark 2004 antitrust decision, which was upheld by the European Union's Court of First Instance last month. The software giant indicated it will not attempt to further dispute the matter before the European Court of Justice.
European Commissioner Neelie Kroes said the onus is now on Microsoft to change its business practices to allow competition and innovation to be restored to the market. "These changes in Microsoft's business practices -- in particular toward open-source software developers -- will profoundly affect the software industry," Kroes predicted.
The European Commission said the interoperability information made available by Microsoft so far appears to be complete and accurate to the extent that a software development project could be based on it. However, Microsoft must now continue to provide complete and accurate technical documentation as the software giant's products evolve.
Devil in the Details
"As always, it is essential that the Commission continues vigorously to monitor Microsoft's compliance, particularly with respect to the completeness of the interoperability information for Vista and Windows Server 2008," said legal counsel Thomas Vijne of the European Committee for Interoperability Systems, which has a membership roster that includes Microsoft rivals Adobe Systems, IBM, Oracle, RealNetworks, Red Hat, and Sun Microsystems.
Kroes pointed out that Microsoft's commitment to full compliance sets a precedent with respect to the software giant's future market behavior overall. "Microsoft must bear this in mind," she said.
Still, University of Baltimore School of Law professor Robert Lande said he is highly skeptical. "The declaration of victory seems highly premature, given Microsoft's track record," Lande said. "Will Microsoft do what they said they will do in good faith, or will they passively resist, as they have done, repeatedly, in the past? I remain highly suspicious."
Lande noted that the market for Microsoft's products is global, which means that the software-maker will, in effect, have to adopt the same adjustments in the U.S. as in Europe. "But the Devil will be in the details of exactly what they will do," Lande added.
Leveling the Playing Field
Kroes said she and Microsoft CEO Steve Ballmer had ironed out the details of Microsoft's surrender while remaining in almost daily contact over the past two to three weeks. As a result, the software giant has agreed to slash royalty rates from 5.95 percent to 0.4 percent for third-party developers of workgroup server operating systems that request a worldwide license governing the use of its proprietary information, including patents.
Microsoft abandoned its demand for a royalty of 2.98 percent of revenues from software developed through the use of its proprietary information. Going forward, companies that dispute the validity or relevance of Microsoft's patents will only need to pay Microsoft a one-off payment of $14,240, she explained.
Under the agreement reached by Kroes and Ballmer, Microsoft must provide its licensees with legally binding guarantees about the completeness and accuracy of the information it delivers. Additionally, the software giant has pledged to give legal security to programmers developing open-source software, confining its future patent disputes to commercial software distributors and end-users.
Microsoft's offering of interoperability information and specifications without onerous restrictions could absolutely benefit end-users rather quickly, noted Linux Foundation spokesperson Amanda McPherson. "New versions of Linux are released every six months, and improvements can be implemented quickly. This is precisely why Microsoft has treated interoperability as a threat to their business."