Microsoft alleges EU collusion with rival countries

Microsoft Corp filed a formal complaint with EU antitrust regulators today, alleging the European Commission withheld documents and secretly colluded with rival companies and an independent monitor shortly before the EU charged the Microsoft had not obeyed an earlier ruling.

The EU said it had no immediate comment on the content or admissibility of what it called Microsoft’s “supplementary response” to last December’s charges. It said it would decide after a March 30 or 31 hearing if it would levy £1.4m (€2.1m) in daily fines against the company for not doing enough to provide competitors with the information needed to make their software work with Microsoft servers.

Those charges were based on independent reports from computer science professor Neil Barrett, who said the technical information Microsoft had provided needed a drastic overhaul to make it workable.

Microsoft said it believes EU officials had “inappropriate” contacts with Barrett and rival companies, which it claimed called into question the independence of Barrett’s final reports.

“While the documents provided do not include the direct correspondence between the Commission and its technical experts, they show that the Commission, the trustee, and Microsoft’s adversaries were secretly collaborating throughout the fall of 2005 in a manner inconsistent with the Commission’s role as neutral regulator and the trustee’s role as independent monitor,” said Horacio Gutierrez, Microsoft’s associate general counsel in Europe.

“These contacts call into question whether the reports … are really independent, impartial assessments of Microsoft’s technical documentation, or instead are argumentative tracts developed for the Commission with the assistance of Microsoft’s competitors,” he said.

Microsoft claimed the Commission also facilitated secret meetings between Barrett and “another of Microsoft’s adversaries” that it did not name, saying it offered to help Barrett fly to Texas for the meeting.

“The purpose of the meetings was to allow engineers work together with the trustee on identifying any continuing gaps, which would allow the trustee to demand supplementary information from Microsoft,” it said.

Some of the contacts are referred to but not documented in correspondence between EU officials and business rivals the company first saw on February 13, two days before a deadline to respond to the December charges. Microsoft said this meant the EU was breaking its own public commitment to increasing transparency in antitrust cases to give more assurances to companies under investigation.

“The Commission’s encouragement of secret contacts between Microsoft’s adversaries and the trustee … and the undocumented communications that resulted, is entirely inconsistent with any attempt to portray the trustee … as independent and impartial experts,” it said in the complaint.

The EU appointed Barrett after Microsoft nominated him as one of several acceptable candidates to supervise its compliance with the 2004 antitrust ruling. Barrett, currently a visiting professor at Cranfield University in Britain, is an expert in internet crime and fraud and has previously advised the British government on computer cases involving everything from pedophiles to hackers.

The company also complains that regulators delayed giving it documents it needed to respond in full to the December charges, saying it only provided the correspondence between the Commission and four US rivals – earlier named as Sun Microsystems Inc., IBM Corp., Oracle Corp. and Novell Inc. – two days before the February deadline.

The EU levied a record £340m (€495m) fine against Microsoft in March 2004. It also ordered the company to share code with rivals and offer a version of Windows without the Media Player software for what the court saw as an abuse of the company’s dominant position in the industry.

Microsoft is appealing the ruling and the case will be heard in April by the European Court of First Instance, the EU’s second-highest court.