[Ecommerce] [ffii] EU boosts MS Monopoly
David Tannenbaum
davidt@public-domain.org
Tue Mar 30 10:49:01 2004
This is a different take on the EC's proceedings against Microsoft.
--__--__--
Date: Sun, 28 Mar 2004 12:59:18 +0200 (CEST)
From: Hartmut Pilch <phm@a2e.de>
To: news@ffii.org
Subject: [ffii] EU boosts MS Monopoly
+++ FFII News - Please Spread Wide +++
EU Boosts Microsoft Monopoly
The European Commission's competition procedings against Microsoft
have led to a verdict which gives a big boost to Microsoft's monopoly
position in the OS market and helps Microsoft expand this position to
other markets. While the Commission may have earned substantial
revenues for itself by imposing a one-time fine of 1% of Microsoft's
liquid cash reserves, the smallprint of the verdict gives Microsoft
green light to kill its main competitors in the operating systems
market. This smallprint was simultaneously reinforced through backroom
deals in the Council's Patent Policy working party, of which copies
have been leaked to FFII. Immediately after the announcments the stock
value of MSFT rose by 3%.
Details
The day after the announcement of the European Commission's decision
on Microsoft's anti-competitive practises, Microsoft's share values
were up by 3 percent.
While the Commission imposes a one-time fine of 1% of the liquid cash
reserves of Microsoft on the company, the decision implies extreme
interpretations of the TRIPs treaty, by which Microsoft is authorised
to charge a "fair remuneration" for the use of any proprietary
protocols on which it has obtained patents in Europe.
This means that, unless the European Parliament's amendments to the
proposed software patent directive are fully accepted, Microsoft will
have received official green light from the European Commission for
killing its main competitors.
As the Register reports:
Far from penalizing Microsoft, Wednesday's decision by the European
Commission assures a bright future for the company as a patent
licensing operation, according to one representative only two open
source interests called to testify before the investigation. Because
Microsoft will be allowed to pursue royalty revenue from the APIs it
publishes, Jeremy Allison says that the projects such as Samba, which
he jointly leads, may face a prohibitive hurdle. Microsoft's
competitors use software such as Samba to access file and print
services on Windows machines. The EC's investigation was brought about
by Sun Microsystems, which through ventures such as 'Project Cascade',
tried to do in proprietary form what Samba and similar projects such
as Novell's Evolution Exchange client do in software libre form:
provide a compatible, interoperable infrastructure to compete with
Microsoft's enterprise software. Microsoft's rivals have become
increasingly reliant on these free software projects. But Wednesday's
decision unexpectedly divides the anti-Microsoft camp, says Allison.
"The EU had a wonderful opportunity but it got greedy," he told us
yesterday. "This splits the competition."
H=E5kon Wium Lie, CTO of Opera Software, one of Microsoft's few
remaining competitors in the web browser market, adds:
It is never fair for any company, no matter of what size, to charge
any competitor for the mere use of protocols which are required for
interoperation. The only fair remuneration for such use is no
remuneration at all. That's why at the World Wide Web Consortium we
decided that web standards must be royalty-free. The same should apply
to all commmunication standards.
This position has also been stated by the European Parliament in the
amended Art 6a on the limits of patent enforcement with respect to
interoperability.
However, the European Commission is fighting against Art 6a of the
European Parliament, based on the same questionable interpretations of
the TRIPs treaty which it used to further the monopoly interests of
Microsoft in the competition case.
Reinier Bakels, scholar for computer law at Institute for Informatics
and Law in Amsterdam and co-author of a study on software patents
ordered by the European Parliament in 2002, comments:
Never believe anybody who says something about TRIPs without checking
the text! Article 30 of TRIPs states that the exclusion rights
conferred by a patent can be limited by competition considerations as
long as this does not prevent the normal use of the patent. The
meaning of most TRIPs provisions is abstract and open to
interpretation, but I do not think many people would agree that
software interfaces should be ownable, let alone that the "normal
use" of patents should be to make them ownable. Rather, ownership of
interfaces leads to anti-competitive effects which call for a
systematic solution within patent law, in conformance to the
meta-rules of Art 30 TRIPs. Art 6a of the European Parliament's
amended software patent directive is an example of a solution that
arguably achieves this aim. The European Commission has neither
explained why it thinks otherwise and how it interprets Art 30 TRIPs.
Rather, the Commission shows a regular pattern of using uninterpreted
TRIPS articles to foster fear, uncertainty and distrust to the
advantage of certain anti-competitive interests in the software
field.
These comments do not yet take into account the fact that the software
patents on which Microsoft's interface ownership attempts are based
have been granted against the letter and spirit of the European Patent
Convention and in fact of the TRIPs treaty itself, as is easy to see
and many law scholars have pointed out.
see also [19]The TRIPs Treaty and Software Patents and
[20]Interoperability and the Software Patents Directive: What Degree of
Exemption is Needed
The Commission seems to have adopted its anti-competitive
interpretations of the TRIPs treaty under pressure from [21]Frits
Bolkestein, the commissioner of the directorate for the internal
market, who had protested that the originally planned interoperability
requirements were too harsh on Microsoft and would lead to WTO
sanctions because they were not justifiable under Art 30 TRIPs.
Bolkestein's directorate has been threatening the Parliament and
misinforming the Council in order to promote extreme interpretations
of TRIPs and to pave the way unlimited patentability of software and
business method patents in the EU.
The texts which Bolkestein's directory has been using in this process
came from the European Patent Office and from the Business Software
Alliance. The software patent directive proposal carried the
handwriting of the same circles close to BSA and Microsoft which
appeared in a [22]document from the US government against the European
Parliament's Article 6a which was circulated to MEPs by the US
representation in Brussels in early september 2003.
While Bolkestein appears to be encircled by a swarm of big business and
patent community lobbyists all the time, he has so far not met any
representative from the camp of critics of his software patent agenda.
DG Internal Market has always unilaterally favored the interests of the
"economic majority", i.e. the corporate patent lawyers who dominate the
relevant committees at EICTA and UNICE, without ever explaining why the
other side's interests were not worthy of protection. There has been a
blockade of communication for years.
However, this may be slowly changing. David Ellard, successor to
[23]Anthony Howard in charge of the software patent dossier at DG
Internal Market, has agreed to participate in the [24]conference on
software patents organised by FFII within the European Parliament on
April 14th. This dialog would be the first of its kind since the
beginning of the Commission's directive plans in 1997.
The Council of the European Union has, in its session of 2004-03-02,
again reconfirmed its insistence on misinterpreting Art 30 TRIPs. A
motion of Luxemburg in favor of a variant of Art 6a was rejected.
Instead the Council's patent working party opted for a recital which
says that competition problems must not be solved within patent law but
on a case by case basis through competition procedings such as the
current one against Microsoft. By this extension to its previous
[25]working document, the Council has even further strengthened its
position as the uncompromising promoter of extreme patentability and
extreme patent enforcability in the European Union. These movements of
the Council have happened, at least in part, at the [26]instigation of
Bolkestein's directorate.
References
19. http://swpat.ffii.org/analysis/trips/index.en.html
20. http://swpat.ffii.org/papers/eubsa-swpat0202/itop/index.en.html
21. http://swpat.ffii.org/players/bolkestein/index.en.html
22. http://swpat.ffii.org/papers/eubsa-swpat0202/usrep0309/index.en.html
23. http://swpat.ffii.org/players/ahoward/index.en.html
24. http://plone.ffii.org/events/2004/bxl04/prep/
25. http://swpat.ffii.org/papers/europarl0309/cons0401/index.en.html
26. http://swpat.ffii.org/papers/europarl0309/cec0311/index.en.html
27. http://swpat.ffii.org/analysis/trips/index.en.html
28. http://swpat.ffii.org/papers/eubsa-swpat0202/itop/index.en.html
29. http://swpat.ffii.org/news/04/cecms0202/index.en.html
30. http://swpat.ffii.org/players/microsoft/index.en.html
31. http://swpat.ffii.org/news/04/index.en.html
32. http://swpat.ffii.org/news/04/ieeu0109/index.en.html
33. http://swpat.ffii.org/news/04/acacia0115/index.en.html
34. http://swpat.ffii.org/news/04/sver0116/index.en.html
35. http://swpat.ffii.org/news/04/kober0114/index.en.html
36. http://swpat.ffii.org/news/04/amaz0125/index.en.html
37. http://swpat.ffii.org/news/04/oecd0130/index.en.html
38. http://validator.w3.org/check/referer
39. http://www.gnu.org/licenses/fdl.html
40. http://swpat.ffii.org/group/index.en.html
--__--__--
_______________________________________________
News mailing list
News@ffii.org
http://lists.ffii.org/mailman/listinfo/news
End of News Digest
--
David Tannenbaum
Union for the Public Domain
davidt@public-domain.org
+44 (0)7816 392 758
http://www.public-domain.org