EU warns Microsoft over Vista features

The European Commission has laid out specific antitrust concerns it has about Vista, Microsoft's long-awaited new operating system, Commission spokesman Jonathan Todd said Wednesday.

"We are concerned about the possibility that Vista will include software elements which are available separately either sold by Microsoft or by other software companies," Todd said.

"There is also the possibility that we won't have all the technical information needed for competitors to make their software interoperable with Vista," he added.

Microsoft's top lawyer in Europe, Horacio Guttierez, said in a telephone interview Wednesday that adding such functions into the operating system is essential if Microsoft is to meet customer demand. "I know consumers want more secure computer systems," he said.

The concerns echo the findings in the Commission's 2004 antitrust ruling against Microsoft, which found the company guilty of bundling its Media Player software into the Windows operating system. It also ruled that the software giant had stunted competition by not allowing competitors' server software to interoperate fully with PCs running Windows.

The concerns about Vista, which is due to be released at the beginning of next year, include plans to bundle in an Internet search function, a digital rights management program and software for creating fixed document format comparable to PDF (Portable Document Format) and security features, Todd said.

"The Commission is concerned that computer manufacturers and consumers won't have a proper choice of software," he said.

Forcing the company to sell Vista without Windows Defender "is a bit like forcing BMW to sell cars without airbags," Guttierez said. "We have a responsibility to make our products better and more secure for our customers," he said.

"Microsoft is building Windows Vista to provide the most secure personal computing environment and to provide unprecedented opportunities for other companies throughout the industry," the company said in a statement, adding that consumers are "free to use a wide range of competitor products, and Windows Vista is designed to respect the choices that consumers make."

Microsoft claims it has included partners and competitors in its planning of Windows Vista, to allow them to build products and services that work with the new operating system.

Keeping the industry and regulators informed of its product development plans "has been, and will remain, a priority," Microsoft said.

No formal investigation has been opened yet, but Todd said "If our concerns are confirmed and we conclude that Vista violated European competition rules then we would open a new case."

Todd was responding to questions prompted by comments made by the competition Commissioner Neelie Kroes in an interview in the Wall Street Journal Europe Wednesday.

"We expect that Microsoft will design Vista in a way which is in line with the European competition laws," Kroes said in the interview. "It would be rather stupid to design something that is not," she added.

At the beginning of last week Kroes detailed the Commission's concerns about Vista in a letter to Microsoft Chief Executive Officer Steve Ballmer. "Microsoft asked us what could be problematic with Vista so we told them," Todd said.

The warning about Vista comes a day before Microsoft's top lawyers gather with regulators and rivals at a Brussels hearing about the company's compliance with the 2004 ruling.

In December the Commission issued a new lawsuit against Microsoft, accusing it of failing to honor the 2004 ruling. Microsoft requested the hearing so that it could refute the Commission's accusation and explain to regulators that it is in compliance with the ruling.

In the two-day hearing, which begins Thursday, Microsoft will explain that in spite of its best efforts to comply, the Commission has set the company an impossible task.

"It will take a real-life application to judge whether the documentation is adequate," Guttierez said, adding, "It will take real licensees using the documentation to know. That's the way the industry works."

"Trying to create a test looking at the documentation in abstract is not consistent with the way the industry works," he said.

If Microsoft fails to change the Commission's mind it faces daily fines of up to US$2.4 million, backdated to mid-December, until it is deemed to be in compliance with the 2004 ruling.

But it's more than money that's at stake during this hearing, said Thomas Vinje, a partner at the law firm Clifford Chance and a founder of the European Committee for Interoperable Systems, a trade group supporting the Commission.

"The meaningfulness of the 2004 ruling is at stake here," Vinje said. "So far no one has bought a license to see Microsoft's technical documentation. There is a danger that this side of the case could be rendered meaningless."

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