April 26, 2006
ECIS Media Note on the Microsoft Hearing: Background to the interoperability case pleadings
Work group server operating systems are the software systems enabling office workers in their day-to-day work to communicate with each other via their PCs, as well as to share basic functions such as file and print. They are a key part of an organisation’s information technology infrastructure.
Novell, not Microsoft, created this technology. Other earlier innovators included Sun Microsystems. As the Windows PC operating system spread to some 95% of all PCs worldwide, work group server vendors remained dependent on the willingness of Microsoft to supply the Windows protocol specifications necessary to interoperate with the ubiquitous Windows PC operating system.
However, the Windows desktop monopoly enabled Microsoft to leverage its desktop operating system monopoly to overtake its server system competitors, and to discourage the emergence of new competitors simply by ending the supply of the necessary Windows protocol specifications to its competitors.
In September 1998, Microsoft refused Sun’s request for the necessary protocol specifications. Over the next two years, Microsoft’s share of the market for work group server systems rose dramatically, from the mid 40s to the high 60s. Today it stands at over 70% of worldwide shipments, and continues to move inexorably upward, while all other competitors fight among themselves within the ever-diminishing residual piece of the market.
The European Commission’s Decision of March 2004 found Microsoft’s refusal to supply Sun Microsystems to be an abuse of Microsoft’s dominant position under Article 82 of the European Union’s competition rules, and ordered Microsoft to make the necessary protocol specifications available to any interested party on reasonable, non-discriminatory terms.
Microsoft argues for annulment of this portion of the Commission’s decision because:
- the required information is valuable intellectual property protected by copyrights and patents;
- these protocols specifications reveal valuable innovations and
- there is strong competition in the work group server market.
None of these arguments will stand up to objective scrutiny.
ECIS is an international non-profit association founded in 1989 that strives to promote market conditions in the ICT sector allowing vigorous competition on the merits and a diversity of consumer choice. ECIS has actively represented its members on many issues related to interoperability and competition before European, national and international bodies, including the EU institutions and WIPO, and is an official Intervener in the legal proceedings arising from the Commission’s March 2004 Microsoft Decision.
ECIS’ members include large and smaller information and communications technology hardware and software providers Adobe, Corel, IBM, Linspire, Nokia, Opera, Oracle, RealNetworks, Red Hat, and Sun Microsystems.
ECIS media desk at Burson-Marsteller:
Tel: +32 2 743 66 10
Fax: +32 2 735 85 28