Re: 1994 EC undertaking - EC press release

[Wandered Inn <esoteric@denali.atlnet.com>]

James Love wrote:
> 
> This is a press release issued by the EC in 1994, describing the EC's only
> undertaking with Microsoft.  I'm getting a copy of the undertaking itself, but
> not in digital format.  (Volunteers for making it digital?).   Jamie

Are you talking OCR?

> 
> -----------------
> FOLLOWING AN UNDERTAKING BY MICROSOFT TO CHANGE ITS LICENSING
> PRACTICES, THE EUROPEAN COMMISSION SUSPENDS ITS ACTION FOR
> BREACH OF THE COMPETITION RULES.
> 
>  DN: IP/94/653     Date: 1994-07-17
> 
>      TXT: FR EN DE DA ES PT NL IT EL
>      PDF:
>      Word Processed:
> 
> Mr. Karel Van Miert, the Commissioner responsible for competition policy,
> has obtained an undertaking signed 15 July 1994 from Microsoft to modify
> its licensing practices. This followed a period of intense negotiations
> involving Microsoft and a team of senior officials drawn from the European
> Commission and the United States Department of Justice. These negotiations
> also resulted in Microsoft settling charges brought by the United States
> Department of Justice by signing a consent decree.
> 
> This undertaking is very significant at least in two respects. It is the
> most important case in the software industry until now. It opens up the
> market for the operating system software which is at the heart of the
> estimated 150 million computers in use worldwide and is of strategic
> importance to the development of some of the fastest growing sectors of the
> Information Technology industries.  Furthermore, the negotiation of the
> undertaking was a historic and unprecedented piece of co-operation between
> the EC Commission and the United States Department of Justice. It serves as
> an important model for the future, as it shows how the two authorities can
> combine  their efforts to deal effectively with giant multinational
> companies. The success of this joint approach sends a strong signal to all
> multinational companies, including those in other sectors.
> 
> Background
> 
> Microsoft, founded in 1975 and based in Redmond, Washington, has become the
> largest developer, manufacturer and supplier of PC software in the world,
> with a worldwide turnover of US $ 3.7 billion and a net profit of almost
> US $ 1 billion in 1993, a third of which was derived within the European
> Union. Microsoft supplies the MS-DOS and Windows operating systems used in
> more than 120 million personal computers and therefore enjoys a virtually
> unchallenged leadership in this market.
> 
> The Commission launched an investigation of Microsoft's licensing practices
> following a complaint dated 30 June 1993 from Novell, the world's second
> largest PC software company based in Provo, Utah. Novell is mainly known
> for its networking software, but also supplies operating system software in
> competition with  Microsoft. Novell alleged  that Microsoft  blocked
> competitors out of the market for PC operating system software by certain
> anticompetitive practices. In particular, the structure of Microsoft's
> standard agreements for licensing software to PC manufacturers was said to
> exclude  competitors from selling their products. Manufacturers were
> required to pay royalties to Microsoft based on the number of PCs shipped
> regardless of whether such PCs contained preinstalled Microsoft software, a
> competitor's software, or no software at all.
> 
> After investigating the complaint, the Commission was concerned that:
> 
> - the use of "per processor" and "per system" licences,  i.e. clauses
> requiring payment of a royalty on every computer produced by a PC
> manufacturer either containing a particular processor type or belonging to
> a particular model series designated by that manufacturer, regardless of
> whether a particular computer is shipped with preinstalled  Microsoft
> software;
> 
> - the use of "minimum commitments" in these contracts, ie requirements that
> licensees pay for a fixed minimum number of copies of a particular product
> regardless of actual use; and
> 
> - the duration of Microsoft's licence agreements,
> 
> had the effect of foreclosing the European market for PC operating systems
> software, thereby infringing Articles 85 and 86 of the EC Treaty .
> 
> At the same time the United States antitrust authorities were investigating
> similar concerns. Investigations had been launched by the Federal Trade
> Commission. When, in early 1993, this body was split on the issue on
> 
> whether or not to take action, the case was continued by the Antitrust
> Division of the US Department of Justice. During these investigations,
> Microsoft consented to the exchange of information between the Commission
> and the US Department of Justice by waiving its right to secrecy with
> respect to both authorities. A number of contacts between DG IV and the DoJ
> followed in which a coordinated approach was prepared. However, this type
> of joint action was independent of the Cooperation Agreement in competition
> matters concluded in 1991 between the EC Commission and the US Department
> of Justice whose validity is still under scrutiny by the Court of Justice.
> 
> At the time when the Commission was about to open the formal procedure and
> to issue a statement of objections, Microsoft indicated its willingness to
> reach a settlement with the authorities concerned. In order to reach such a
> settlement, the Commission and the US Department of Justice agreed to
> negotiate jointly with Microsoft. To this end, trilateral talks were held
> both in Brussels and in Washington DC. They resulted in an Undertaking from
> Microsoft to both authorities.
> 
> The Undertaking
> 
> The Undertaking obtained by the European Commission and the US Department
> of Justice provides that Microsoft will not enter into licence contracts
> with a duration of more than one year, will not impose minimum commitments
> on licensees and will not use per processor clauses any longer.
> 
> Per system licences will be allowed only if licensees are clearly given
> flexibility to purchase non-Microsoft products and to avoid payment of
> royalties to Microsoft in such instances.
> 
> In addition, any provisions of existing licence contracts which breach
> these provisions will not be enforced, and licensees have an option to end
> existing contracts.
> 
> This Undertaking has a duration of six and a half years.
> 
> -----------------------
> 
> A similar press information was issued by the US Department of Justice for
> immediate release on Saturday, 16 July 1994.

--
Until later: Geoffrey		esoteric@denali.atlnet.com

You mean you paid MONEY for Service Pack '98????