Microsoft rolls over for EU antitrust ruling

Microsoft has agreed to comply with a 2004 EU court ruling on anti-competition, bringing changes that will "profoundly affect the software industry", according to Neelie Kroes, European commissioner for competition policy.

Kroes said in a speech in Brussels she has been in almost daily contact with Microsoft chief executive Steve Ballmer over the past two or three weeks, and that Microsoft has now agreed to make workgroup server interoperability information available to open source developers.

She said: "I told Microsoft that it had to make interoperability information available to open source developers. Microsoft will now do so, with licensing terms that allow every recipient of the resulting software to copy, modify and redistribute it in accordance with the open source business model."

Microsoft is now obliged to provide information allowing third-party developers of workgroup server software to develop products that interoperate with the Windows desktop operating system, at a reasonable rate.

Kroes said: "Microsoft has previously offered to license this information to developers on terms that the Commission thought wholly unreasonable."

The software giant will now have to license interoperability information it claims is covered by its patents at a royalty rate of 0.4 per cent, instead of the 5.95 per cent it had previously sought. Microsoft has also agreed to abandon its demand for a royalty of 2.98 per cent of revenues for access to "secret" interoperability information, instead charging a one-off payment of €10,000 for the information.

In addition, Microsoft will not pursue patent disputes with programmers over alleged patent infringements, limiting its attentions to software distributors and end users.

Kroes added: "I told Microsoft that it should give legal security to programmers who help to develop open source software and confine its patent disputes to commercial software distributors and end users. Microsoft will now pledge to do so."

Kroes said that put together, these changes in Microsoft's business practices - in particular towards open source software developers - will "profoundly affect the software industry".

She said: "The repercussions of these changes will start now and will continue for years to come. The Commission's 2004 decision set a clear precedent against which Microsoft's anti-competitive behaviour could be judged. Now that Microsoft has agreed to comply with the 2004 Decision, the company can no longer use the market power derived from its 95 per cent share of the PC operating system market and 80 per cent profit margin to harm consumers by killing competition on any market it wishes."

Microsoft confirmed it had agreed to comply with the judgement of the European Court of First Instance but had not commented at the time of writing on whether it had agreed to pay the £397m anti-competition fine imposed at the time by the Commission.

A Microsoft spokesperson said: "At the time the Court of First Instance [CFI] issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the Commission's decision. We have undertaken a constructive discussion with the Commission and have now agreed on those additional steps. We will not appeal the CFI's decision to the European Court of Justice and will continue to work closely with the Commission and the industry to ensure a flourishing and competitive environment for information technology in Europe and around the world."

Tom Espiner writes for ZDNet UK