Press
Microsoft Cries Uncle in Europe, Will Give Up Code to Competitors
Posted by Matt Buchanan at 6:00 AM on October 23, 2007
After nine years of back and forth and a small country's GDP in fines for antitrust violations, Microsoft's finally caving to EU antitrust regulators by giving code to competitors it's fought to keep to itself after a 2004 European Commission directive to hand it over. A ruling last month by the EU's second-highest court affirmed the EU's right to force powerhouse companies to share intellectual property with competitors in order to level the playing field, which purportedly led Ballmer to fly to Europe to cut the deal.
According to the deal's terms, developers can pay a one-time fee of 10,000 euros ($14,300) to get ahold of Microsoft's server protocols. If they're used in a rival's product, Microsoft's entitled to 0.4 percent of sales—Microsoft wanted 5.95 percent, so they've taken quite a pay cut, indicating that Microsoft's hands were pretty tied up on the matter. After their success in browbeating Microsoft here, it's anyone's guess as to where the EU's antitrust police will point their legal guns next. What do you guys think of the ruling? Should Microsoft have to relinquish code to the competition? [NYT, Flickr]
Tags: press

Comments (AU Comments · US Comments)
Jay Porter
Posted October 23, 2007 9:49 PM
While not directly related to the article I must say that I find it surprising that there are not more comments on the stories that you guys throw up.
Considering the size and scope of this article I am surprised that the zealots from the various camps are not all over this calling each other out.
In terms to the actual article itself though I for one am simply glad that it has reached it's conclusion.
alukard
Posted 5:13 AM 23/10/07
@honozooloo: Very intelligent and well thought out comment there. Top marks for factual in-depth analysis. I very much agree with you.
Far better than the bandwagon drivel of some other commenters here, "second that, third that" nonsense.
alukard
conception
Posted 10:49 PM 22/10/07
@honozooloo: Exactly. Imagine if anyone could create an ASP or Exchange server. It would force competition back into the marketplace.
It's basic econ. A government's job is to keep a market free and running. Unregulated markets do not create free markets. Ask Standard Oil or Enron.
conception
honozooloo
Posted 10:15 PM 22/10/07
@ everyone....
Seems many commenters are reading into this post but not clicking through to the NYT article. The crux of the issue is that rival companies, e.g. Linux developers, want access to segments of code, specifically Microsoft Server protocols. They can't really "steal" MS code to create their "own version" of MS software, they only want access to it so they can build server and client software with a greater level of interoperability with MS software.
A typical move made by a monopolistic business would be to make it as hard as possible for competitors to make anything that worked with their product. Its a tough question...and it boils down to this question: Is Microsoft so widely adopted that many so-called "Microsoft" server protocol standards really more like "industry standards" at this point? If so, is it legitimate to force MS to share its protocols?
Sharing intellectual property is a tough can of worms to open...on one hand Microsoft has a vested interest in keeping its intellectual property as closely guarded as possible. On the other hand, allowing the protocols to be made licensable to 3rd party developers also means that there are more software solutions available to consumers, and indeed it puts pressure on Microsoft to "step up" its game to ensure that people buy Microsoft products based on merit rather than a lack of viable alternatives (as is sometimes the case with Microsoft products).
If its only an issue over the protocols, I guess I land on the "EU was right" side of the fence. Protecting a set of protocols to prevent anyone from creating a product that will inter operate with yours is stifling to the market, competition, and progress. Especially if your product is the dominant one in the market, and controls many of the standards used to make modern businesses work.
Hey, it's Microsoft after all. Even if their server protocol standards are opened and they are left to face stiffer competition...who but Microsoft would have the kind of resources to develop solid software that still surpasses the 3rd party competition? I mean, what do they have to worry about anyway?
honozooloo
applebasher
Posted 9:00 PM 22/10/07
Hey they probably now have their sights on Apples Monopoly on both Hardware & OS... as well as itudes.
applebasher
Catharsis
Posted 7:51 PM 22/10/07
One of the major issues with this debate is that it has been aleged for a long time that open source code has been used in microsoft programs without following the eula for the code. this could for once end that debate. here is good and bad in all of this however we can not say what the implicatons are right now, it will definately be interesting to see how it pans out.
Catharsis
Vizi
Posted 7:32 PM 22/10/07
I was playing BioShock today and saw this appropriate phrase on a banner, "A Man Creates, A Parasite Asks 'Where's My Share?'" It's moments like these that remind even the most liberal socialized-medicine and social-security touting bleeding-heart how American we all really are. Long live our dumb, diabetic, and love-handled homeland.
Vizi
tamoko
Posted 6:59 PM 22/10/07
@Elvisisdead: I was thinking that too... It seems like the EU is so worried about protecting it's own software and hardware markets that they will eventually stifle their own innovation, and those of anyone they see as a threat.
It's an empty issue for anyone who could take the time to find software alternatives and load them up to replace Microsoft's apps.
tamoko
Cypher
Posted 6:56 PM 22/10/07
The EU has lost their damn minds. Forcing Microsoft to give up or sell any part of their code or protocols is just wrong and will stifle any kind of competition in the EU. Why try and build a better product when we can just wait for someone else to do it and reuse their work. For as much crying that people do about Microsoft they have done some good as well as bad.
If you want to stop them then earn it and make a better product. Don't just sue someone and force them to give you what is rightfully theirs.
What the EU has done is find a way to legally steal Microsoft property.
Cypher
Redwraithvienna
Posted 6:55 PM 22/10/07
@ThatGirlNY:
Pull out of a 500 Million People Market ? With more buying power then the USA ? LOL. Just LOL. And the next thing they do is give Vista away for free at the next Thanksgiving Parade...
@GHETTO.CHiLD:
Do you even know what communist means ? If not ... Dont use big words.
This is not about giving away code. This is about giving other companies the chance to built their software in a way that will work better with MS products which will in the end just benefit the customer (me and you)
BTW : Most benefit from this desicion will go to small and mid size Software companies.
And most of those are at home in the US not the EU. So in the end the US companies (those guys that give you and your friends jobs) will benefit the most.
Redwraithvienna
willyboy
Posted 6:48 PM 22/10/07
@quiksilver180: I third that! ;)
willyboy
ThatGirlNY
Posted 6:27 PM 22/10/07
Microsoft should do an Atlas Shrugged and pull out of the EU.
ThatGirlNY
bitfactory
Posted 6:18 PM 22/10/07
Sound of competitors after receiving and viewing said code: "What's this shit?"
bitfactory
fuzzycuffs
Posted 5:50 PM 22/10/07
@conception: Protocols so they can compete with Word? What are you talking about?
File formats? Open XML is a standard, anyone can code to it (and they do). Last I checked Microsoft isn't using at network protocols that are any different than the standards, and if they do make their own (Toredo for instance), it's pretty heavily documented.
fuzzycuffs
quiksilver180
Posted 5:50 PM 22/10/07
@altus: EXACTLY!
quiksilver180
altus
Posted 5:06 PM 22/10/07
Ouch... Tell us that this isn't true: The quality standards of Microsoft code and applications are now going to be part of everything!!!! That's punishing the world and not Microsoft.
altus
goingthewongway
Posted 4:59 PM 22/10/07
I don't think that the EU forcing MS to give their code away is anything but a move towards stronger government. Essentially it goes against capitalism because it forces the government to make things "more" fair where they get to draw the terms for what fair is. And as much as I think that MS has done wrong in their past, they still have succeeded in doing a lot of things better than everyone else.
So the EU needs to just go sit in the corner and stop trying to get its fingers in everyone else's business. Especially in the economic realm where supposedly capitalism reigns supreme.
goingthewongway
Elvisisdead
Posted 4:54 PM 22/10/07
My bet is that it's not 10K for a perpetual license. I can guarantee that MS will tweak the protocols just a bit between every release to 1) kill anything that was developed on the prior protocol and 2) get the 10K again.
Elvisisdead
conception
Posted 4:42 PM 22/10/07
@zeolus: So... all security in Linux is obsolete? Knowing how something works is not knowing how to break it.
conception
zeolus
Posted 4:40 PM 22/10/07
Following that law that intellectual property has to be shared, any sort of security sure would suck. In other words if someone invents some sort of security measure you must share how it works and how it is made. Therefore it will be very easy for someone to bypass and make the security obsolete.
zeolus
conception
Posted 4:39 PM 22/10/07
There's a big difference between a company that sells software and a company that sells software that runs 90% of the computers in the world. When you use your monopoly to control the market (which they do quite often), that in fact, is how a free market breaks down. Monopolies and free markets do not co-exist.
To, they aren't getting code. They are getting protocols. So, people can develop competition for word, exchange and active directory. This will mean that those products will get better far faster than Microsoft inching along.
conception
sunkist
Posted 4:34 PM 22/10/07
this is crazy. has anyone ever read "atlas shrugged"? This is like that.
sunkist
fuzzycuffs
Posted 4:33 PM 22/10/07
@Hvedhrungr: Is that why Firefox has done such a good job making a browser that works wonderfully in Windows?
That argument is pretty tired. You can replace any app in Windows that isn't made by MS quite fine. OpenOffice, VLC, Pidgin, whatever.
fuzzycuffs
fuzzycuffs
Posted 4:32 PM 22/10/07
@FreeMan: Very well put, and 100% agreed.
"Interoperability" my ass. That's what published APIs are for, which MS and a whole lot of other companies do. Protecting their own IP is paramount of any company who's sole revenue stream is IP. Sorry if software companies don't sell tangible goods, anymore.
fuzzycuffs
Hvedhrungr
Posted 4:31 PM 22/10/07
I think the point is that Microsoft is supplying an OS which is included in a lot computers, and they're forcing consumers to use other Microsoft products exclusively by not making it possible to competitors to develop matching software.
Which, according to EU cartel laws, is creating a monopoly.
Hey, you've seen the news about the iPhone in France. Apple will be forced to sell open iPhones if they want to sell in France at all. What's not to love?
Hvedhrungr
clarkjw
Posted 4:26 PM 22/10/07
Huh? MS doesn't have to serve the EU market.
clarkjw
FreeMan
Posted 4:23 PM 22/10/07
That settles it. Europe is officially Communist.
While I'm not the biggest fan of some of MS' decisions, products, or business practices, I am a big fan of free-market economy. If the competition can't cut it, then tough. MS has paid millions, if not billions, to develop the code in WinXP, Vista, etc. and the EU is making them give it away for a few thousand? That's a load of crap. What's next, is the EU going to force Google to hand over their code for PageRank so the competition can copy & use it? This ain't college, folks, write your own damn code!
FreeMan
GHETTO.CHiLD
Posted 4:22 PM 22/10/07
No, its not fair. If the bully on the block knows how to make better beating sticks its not fair to make him teach the chumps how he makes them so they can fight back. If you spend money, time and lives to develop some semi decent code than you should get to keep it. Now setting price caps is a different story.
GHETTO.CHiLD
Hvedhrungr
Posted 4:20 PM 22/10/07
You know, say what you will about the EU and its bureaucratic juggernaut, but I have to applaud them for this.
...and probably sue them for the tear in my diaphragm after laughing about Microsoft and this news for at least half an hour.
Hvedhrungr
whiteknight
Posted 4:18 PM 22/10/07
As much as I don't like Microsoft for it's incredible monopoly over the coding market, I don't agree with the EU. That doesn't seem to promote the safe, free, and competitive business market that should exist.
whiteknight
Asteroid
Posted 10:05 AM 23/10/07
@clarkjw:
Yeah, Microsoft doesn't have to sell their software to the EU. They should just stop selling the software if the EU has a problem with it. This will probably increase piracy, but there are still people that will buy the retail version and they will complain.
Asteroid