October 17, 2006

Microsoft, EU reach agreement

By David Gow

Brussels, Oct. 17: (Guardian News Service): Microsoft and the European commission yesterday welcomed an unprecedented break in their seven-year legal war of attrition that will enable the European launch of the software group's new computer operating system, Vista, to go ahead next month.

Neelie Kroes, competition commissioner, who fined Microsoft euro 280.5 million in July for failing to comply with commission anti-trust rulings, said: ``They promised they would behave and take into account our rules and regulations.

Well, I'm a happy woman.'' Ms Kroes, nicknamed ``Nickel Neelie'' because of her hardline stance on competition, reached an understanding with Steve Ballmer, Microsoft's chief executive, late on Thursday that the group would make significant changes to Vista to ensure rival software is available on its operating system.

For Microsoft, fined a record EUR497m in March 2004 for abusing its market dominance, the breakthrough after seven months of tense negotiations is a portent for the future. ``For once, we may be able to launch a productwithout entering into a hailstorm of legal suits,'' an insider said.

Yesterday, sources close to the group said the commission had shown a more proactive approach towards Vista. Ms Kroes, meanwhile, is said to havebeen impressed by the software group's flexibility and willingness to make information available.

Both sides agree that the commission has not given the ``green light'' for the commercial launch of Vista to business users next month and to retail customers in January. But Brad Smith, the group's general counsel,has said Microsoft accepts it is obliged to comply with antitrust law and believes the revised Vista does comply.

Microsoft has agreed to make three key changes in the form of commitments to address EU concerns about ``bundling'' software into its operating system. First, users can now choose their own search engine.

Second, after complaints from rival security software companies such as Symantec, it has agreed to create a new set of codes (APIs) that will enable rivals to gain access to Vista's core. Third, it agreed that its newfixed layout document format, XML, similar to that of Adobe's PDF files, will be scrutinised by a standards body.

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