Microsoft Charges EU With Collusion

Microsoft dialed up the heat Wednesday on the European Union's antitrust agency to high, charging that it colluded with the company's rivals and cannot be trusted to rule impartially.

Hours after that, Neelie Kroes, the head of the European Competition Commission, put her agency on a collision course with the American developer. In comments made in The Hague, she said "If we pursue the line we are following now, there will be fines and they won't be small fines."

Following a December 2005 ruling that said Microsoft had failed to meet the terms of the 2004 antitrust decision, Kroes threatened to fine Microsoft 2 million euros ($2.4 million) daily. For its part, Microsoft responded to the non-compliance charge on Feb. 15; the papers Microsoft made public were a supplementary filing made, according to the company, because the Commission had withheld important documents until two days before that deadline.

"The correspondence disclosed on 13 February has disturbing implications for the manner in which the Commission has conducted this case," Microsoft charged in the blistering 16-page document. "The documents reveal that the Commission has been conducting its investigation of Microsoft's compliance in secret collaboration with Microsoft adversaries and in violation of its own rules for communication with the Trustee."

Specifically, Microsoft said, the commission blindly used information provided by three unnamed rivals. "The correspondence that the Commission produced on 13 February evidences the Commission's willingness to rely on information fed to it by Microsoft's adversaries in producing the Statement of Objections without bothering to check the evidence itself."The Statement of Objections is the term for the official notice in December that Microsoft was not sharing enough technical information on the inner workings of Windows server software.

Microsoft also called into question the impartiality of Professor Neil Barrett, a British computer scientist who holds the title of Trustee, and is the commission's technical advisor on Microsoft's compliance. The December decision by the EU was largely based on Barrett's recommendations.

"The 13 February correspondence also calls into question whether the reports of the Trustee and OTR upon which the Statement of Objection is based are really independent, impartial assessments of Microsoft's Interoperability Information, or instead are argumentative tracts developed for the Commission with the assistance of Microsoft's competitors," Microsoft continued.

Microsoft didn't name the competitors it said collaborated with Kroes' commission, but the only firms that have been involved with the EU's case have been IBM, Oracle, Novell, and Sun Microsystems.

The company also claimed that the EU continues to withhold important documents.

"Even a cursory review of the documents disclosed [Feb. 13] reveals that there are others that have not been disclosed," said Microsoft. "E-mail chains are not finished, questions are left unanswered, and documents are mentioned that are not disclosed."Microsoft will be able to plead its case March 30 or 31, Kroes told Dutch business leaders in The Hague Wednesday. "We will listen to Microsoft and their lawyers and after that we will reach a decision as soon as possible," she said.

The American company, however, said that its defense for the upcoming hearing had been crippled by the lack of documents and compromised by the contacts between the commission, Barrett, and Microsoft's rivals.

Microsoft has appealed the 2004 antitrust ruling -- which resulted in a record 497 million euro ($613 million) fine -- and start the first round of court appearances in April before the European Court of First Instance, the 15-nation body's second-highest court.