Report: EU wants MS to charge little for Windows info

European Union antitrust regulators want Microsoft to give away information on Windows protocols to rivals so that they can make their products work better with the company’s servers, the Financial Times reported Thursday.

The paper, which has seen the confidential Statement of Objections sent by the EU’s Competition Commission to Microsoft March 3, said the antitrust agency wants the company to charge little or nothing for the documentation it’s been working on since a 2004 ruling.

Microsoft currently charges up to 5.95 percent of companies’ server revenues as a license fee, said the Times. But the Commission’s technical advisor, Neil Barrett, said in the filing that even an average royalty rate of 1 percent would be “unacceptable.” A zero-royalty would be “better,” Barrett argued, adding: “We can only conclude on this basis that the Microsoft-proposed royalties are prohibitively high and should be reduced in line with this analysis.”

That, minus the details on royalty rates, was the Commission’s argument in March when it announced the new charges and threatened to slap Microsoft with additional fines of up to $4 million per day.

Microsoft reacted much as it did more than a month ago. “We firmly believe the prices we proposed are fair, which is supported by the analysis conducted by PriceWaterhouseCoopers that found that our pricing is at least 30 percent below that of comparable technology in the marketplace,” company spokesman Jack Evans said.

The Commission’s position is that Microsoft’s protocol documentation lacks “significant innovation,” and should be priced accordingly. In March, however, EU spokesman Jonathan Todd said: “The commission does not want Microsoft to give away the fruits of its research for free.”

Todd was not available for comment late Thursday.

Microsoft again disputed the Commission’s contention that the server protocols lack innovation. “We also believe that this technology is innovative because it includes 36 patents issued by U.S. and European patent offices, with another 37 patents pending,” said Evans. “We look forward to addressing both these issues — pricing and innovation — in our response due April 23 to the Commission’s most recent Statement of Objections.”

Last week, Microsoft was granted an extension from April 3 to April 23 to respond to the Commission’s March charges.

The EU-Microsoft case, which began in the 1990s, resulted in a $613 million fine in 2004; the company was also ordered to share several server protocols with competitors as compensation for what the EU said were Microsoft’s monopolistic practices. Last July, the Commission added another $373 million in fines, saying Microsoft was dragging its feet in preparing the documentation. Microsoft has appealed both fines to EU courts.