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EU criticised for Microsoft action

Could potentially delay Vista

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

In a strongly worded letter submitted today to competition commissioner Neelie Kroes, the legislators said Microsoft regards the regulatory actions as a 'risk factor'. Microsoft used the phrase in its annual report filed on 25 August with the US SEC (Securities and Exchange Commission).

"This effectively means the EC'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 wrote in the SEC filing that its ongoing appeal against the EC's March 2004 antitrust decision means there is 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 EC, along with technical information, said spokesman Tom Brookes. The EC, he said, has raised concerns regarding complaints by competitors.

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

EC representatives were not immediately available for comment regarding today's letter.

Brookes said Microsoft was unaware of the letter until this morning. Two of the legislators said their letter is based on information contained in the company's SEC filing.

Heaton-Harris referred questions to Microsoft regarding why the company thought the EC might delay Vista's release. Microsoft has said Vista will be ready for corporate customers in November and consumers in January.

Bowles said she has participated in informal sessions where EC members have acknowledged they are watching Microsoft's development of Vista closely. She said she had no specific information on what the EC is currently doing, as few details are publicly released.

However, the EC's actions have prompted concern among small to medium-sized businesses in Europe, worried about a potential delay to 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 10-year plan, called the Lisbon Agenda, to increase the continent's competitiveness in technology. The legislators wrote that they are concerned the EC's actions toward Microsoft are undermining Europe's moves to become a knowledge-driven economy.

Microsoft and the EC have locked horns over how the company is complying with the March 2004 antitrust decision. The EC fined Microsoft €280.5 million (about £190.5m) in July for failing to provide technical documentation for certain protocols used by its server products.

The EC required disclosure of the protocols to allow competitors to develop compatible products. Microsoft is appealing.

Microsoft is also appealing against the entire March 2004 decision, in which it was fined €497m (£338m), before the European Court of First Instance in Luxembourg.


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