European Union Criticized for Action Against Microsoft

LONDON -- Four European Parliament members warned the European Commission that its actions toward Microsoft could endanger the competitiveness of European businesses by delaying the release of Vista, Microsoft's next operating system.

In a strongly worded letter submitted today to Competition Commissioner Neelie Kroes, the legislators said Microsoft regards the EU's regulatory actions as a "risk factor." Microsoft also used the terminology in its annual report filed August 25 with the U.S. Securities and Exchange Commission.

"This effectively means that the Commission's actions are endangering the ability of European business to compete globally," the legislators wrote.

The letter is signed by UK representatives Chris Heaton-Harris, Sharon Bowles, and Peter Skinner, plus Michal Kaminski of Poland.

Microsoft Has Same Concerns

Microsoft wrote in the SEC filing that its ongoing appeal of the European Commission's March 2004 antitrust decision means there's uncertainty over the legal principles regarding product design in the European market.

"These uncertainties could ... delay release dates for Windows or other products," the SEC filing read.

Microsoft has provided copies of Vista to the Commission along with technical information, said spokesperson Tom Brookes. The Commission, he said, has raised concerns regarding complaints from competitors.

In March, the Commission sent a letter to Microsoft chief executive officer Steve Ballmer, saying it was concerned about certain functions in Vista and how compatible the OS would be with products from other software companies.

Commission Doesn't Agree

Commission spokesperson Jonathan Todd said today that it's misleading to say the Commission is delaying Vista's European launch.

Todd disputed Microsoft's characterization of "uncertainty" in EU competition rules, saying the Commission has given guidance to the company many times regarding its antitrust decision. The Commission doesn't have to give Microsoft a "green light" before the company puts Vista on the market, he said.

The Commission sent Microsoft another detailed list of concerns in July, which the company replied to last week, Todd said. "It is up to Microsoft to accept and implement its responsibilities as a near monopolist to ensure full compliance," he said.

Business Worries

The Commission's actions have prompted concern among small to medium-size businesses in Europe worried that the EU could potentially delay Vista's release, putting them at a competitive disadvantage with the rest of the world, Bowles said.

"That climate of uncertainty caused through competition policy and actions already taken ... are meaning that Europe is being deprived," Bowles said.

Europe is in the middle of a ten-year plan, called the Lisbon Agenda, to increase the continent's competitiveness in technology. The legislators wrote that they are concerned the Commission's actions toward Microsoft are undermining Europe's moves to become a knowledge-driven economy.