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Microsoft clause "stifles innovation"

EU quizzes hardware makers on MS licences

The European Commission has contacted unspecified hardware manufacturers about Microsoft's licensing policy because it suspects anticompetitive behaviour, it said today.

Describing the move as a "preliminary fact-finding stage", the Commission said it is acting in response to concerns from companies about certain licensing conditions that Microsoft attaches to its Windows operating system.

These so-called "nonassert obligations" prevent hardware manufacturers from enforcing any of their own hardware patents that may have implications for software.

If, for example, IBM patented a method for speeding up the operations of a computer, the company would not be able to prevent Microsoft or any other competing hardware manufacturer from using the technology.

Hardware manufacturers such as IBM, Dell, Hitachi and Toshiba, have signed these nonassert clauses because they can't afford to offer computers without Windows, said Thomas Vinje, an outspoken critic of Microsoft and a partner in the Brussels office of law firm Morrison & Foerster LLP.

The Commission sent a series of letters to equipment manufacturers requesting information on the agreements they have entered into with Microsoft, it said in a statement. It has not reached any conclusions yet, nor contacted Microsoft about the issue.

Microsoft was not immediately available for comment.

The software giant started including the nonassert obligations into contracts with hardware manufacturers four or five years ago, according to Vinje.

The inquiry is separate from an ongoing antitrust lawsuit conducted by the EC. This latter case focuses on Microsoft's policy of bundling its audio-video Media Player software into successive versions of Windows.

The European Commission has accused Microsoft of abusing the dominant position of Windows in order to foreclose the market for audio-video software. It also claims the software giant is leveraging its dominance of PC-operating system software into the market for low-end server operating systems.

The inquiry into Microsoft Windows licensing agreements with hardware manufacturers could form the basis of a separate antitrust investigation if the EC suspects that the company is using the nonassert clause to stifle innovation among hardware manufacturers.

"When a hardware manufacturer signs a clause like this, it's a pretty big disincentive to innovate," said Vinje, whose clients include Dell and Fujitsu.

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