Analysts slam EU over Microsoft fine

Stan Beer
Thursday, 13 July 2006 19:34

IT Industry - Market

Two Microsoft watchers at UK-based research group Ovum have been highly critical of the EU's treatment of Microsoft, after regulator the European Commission levied a hefty fine against the software giant.

The EU has confirmed that it is to fine Microsoft to the tune of €280.5m. In December 2005, the EU determined that Microsoft had failed to comply with the terms of the March 2004 decision that required Microsoft to publish detailed documentation about certain client-server protocols that appear in the Windows operating system.
 
David Mitchell, Software Practice Leader and Gary Barnett, Research Director at Ovum had the following comments:
 
"Many in the analyst community, the media and the blogosphere have continued to repeat the mantra "Microsoft is bad, the EU is good!" without bothering to subject the conduct of the EU to any form of real analysis. The, perhaps unpalatable, truth is that the EU deserves its share of the blame for the long delay in Microsoft's compliance with the 2004 decision, and as a result it is wholly inappropriate for the EU to fine the company for non-compliance at this point in time.

"The timing of this fine is bizarre and unhelpful in resolving the dispute. In the last three to four months there has been genuine progress towards resolving the substantive issue around documentation of Windows protocols. Agreement has been reached between the EU's monitoring trustee and Microsoft on the form and substance of documentation. A series of seven milestones were agreed upon and the first six have been achieved already, with scrutiny of the revised documentation showing signs of a positive reaction. Waiting until the final milestone, due on 24 July, had been reached and those deliverables examined before confirming this fine would have been much more logical.

"Microsoft is appealing against this decision and the saga will stretch on - this latest extension is down to the EU, not Microsoft. The EU should not rely on spending the money that Microsoft will hand over as there is a significant chance that they will need to give it back after the full flush of the appeals process.

"This case hangs like a pall over the European software industry, acting as a general market depressant. The case will set wider and very significant precedents that will affect many aspects of the European industry. By taking the stick to Microsoft the EU could inadvertently end up beating other companies too, thereby damaging the industry. Engineers and scientists have more chance of producing a rapid resolution to the case than the civil servants and lawyers - the EU should allow the current technical work to complete, and call off the legal and bureaucratic dogs for a while.

Microsoft is not blameless in this case, but the blame equation has more weight on the EU side than most recognise."