Microsoft to EC: More clarity on licensing fees

Microsoft has responded to the European Commission's objections over licensing fees for a technology to aid interoperability, saying it seeks more clarity from the antitrust regulatory arm.

In response to the Commission's statement of objections over pricing for licensing Microsoft's Work Group Server protocol technology, the software behemoth said it will waive its right to a hearing on the matter and continue discussions with the antitrust agency.

Brad Smith, Microsoft general counsel, said in a statement: "We need greater clarity on what prices the Commission wants us to charge, and we believe that is more likely to come from a constructive conversation than from a formal hearing."

The issue centres on whether Microsoft is providing its Windows Server protocol technology under "reasonable and non-discriminatory" terms.

A monitoring trustee hired by the EC is recommending royalty payments of zero to one per cent for the licences, whereas Microsoft wants to charge 5.95 per cent, according to a report in the Financial Times.

The Commission will review Microsoft's response and will ultimately make a formal decision on whether the company is adhering to its historic March 2004 order and whether to impose daily fines if needed, according to the EC's statement.

Competitors, meanwhile, find Microsoft's 5.95 per cent royalty too steep to make it feasible to use the software giant's technology to make their products interoperable with Microsoft's products.

Thomas Vinje, counsel to the European Committee for Interoperable Systems, said in an email interview: "The Commission's preliminary conclusion is entirely correct: the licences would provide no value to licensees other than that flowing from the ability to interoperate with Microsoft's dominant products, and that is something for which the (decision) does not allow Microsoft to charge licensees."

He added that protocol specifications designed to aid interoperability are typically licensed royalty-free in the software industry.

He added: "It would be ironic for Microsoft to be allowed to charge for something in the context of an antitrust remedy that its competitors typically give away for free."

Dawn Kawamoto writes for CNET News.com