Posted by Dave Heiner
Vice President and Deputy General Counsel

David Heiner (LCA) formal 2004 01On Wednesday the European Commission announced its decision to approve a resolution of its long-running competition law inquiry concerning Microsoft.  Commissioner Kroes remarked that the decision has the potential to herald a “new, more positive” era in Microsoft’s relationship with the Commission.  We are obviously very pleased to reach this milestone.  We’ve posted the details here.

While most of the press attention has focused on the Commission’s decision regarding Web browser software in Windows, the Commission also announced Microsoft’s agreement to implement a series of measures to promote interoperability.  The interoperability piece is important too because consumers of everything from cell phones to mainframe computers want assurances that their products will work seamlessly with other devices, software and services. In speeches in June 2008 and thisOctober, Commissioner Kroes outlined a vision for how leading firms should address competition law concerns relating to interoperability.  Commissioner Kroes championed industry standards as “the foundation of interoperability.”  Products from different firms can work well together when they implement common, well-designed industry standards.  In addition, when firms innovate in a proprietary manner, Commissioner Kroes observed, interoperability can be facilitated if firms (i) disclose sufficient technical information to enable other firms to build interoperable products; (ii) provide other firms with a remedy if the technical information disclosed is not complete and accurate and (iii) charge fair royalty rates for any intellectual property that is needed.

As part of the settlement announced Wednesday, Microsoft has pledged to implement this approach to interoperability across all of our most widely used products—Windows, Windows Server, Office, Exchange and SharePoint.

The interoperability agreement includes a number of important aspects.

First, Microsoft has committed to implement a range of important industry standards in its software, including Web standards in Internet Explorer.  Our agreement also recognizes that standards are often complex, and sometimes imprecise or even incomplete.  To account for that, we will publicly document how we have implemented relevant standards so the information is readily available to all software developers.  Our customers can reap the benefits of some of this work already in the beta version of Microsoft Office 2010,available today, which enables users to save and open documents in a variety of industry standard formats. These formats include Open XML (a standard originally sponsored by Microsoft) and the Open Document Format (a standard originally sponsored by competitors to Microsoft).

In addition, to facilitate interoperability with proprietary aspects of Microsoft’s products, we will disclose technical information regarding the software “protocols” that our products use to exchange data with other products.  Other firms can use this technical documentation to develop their own implementation of Microsoft’s protocols.  We already have been hard at work preparing this technical documentation.  Hundreds of Microsoft developers have been dedicated to this effort, in part making good on theInteroperability Principles that Steve Ballmer and Ray Ozzie announced in 2008.  With our European Commission settlement we are doing even more and have pledged to carry this work forward for years to come as we release new products. 

We also are posting our protocol documentation on the Internet, so any developer can access it easily without entering into a license with Microsoft.  For our protocols that contain patented innovations, we are making available patent agreements on reasonable and non-discriminatory terms.  We are also making available warranty agreements that guarantee that our technical documentation is complete and accurate—backed by legal recourse if it is not.

These steps address competition law concerns relating to interoperability, but they are not a panacea for all technical interoperability challenges. Interoperability in practice is hard.  It requires more than adherence to technical standards and disclosure of proprietary technologies.  To best advance interoperability firms must design new products with interoperability in mind and—importantly—collaborate with one another in thinking through how products should interoperate and in testing products once they are built.  It also requires customers, such as governments seeking to connect disparate agencies, to develop common processes and taxonomies that software developers can implement.  For our part, Microsoft is working hard across our own product lines and with other companies to deliver interoperable products for an increasingly connected computing landscape.

These efforts are already bearing fruit.  For example, Polycom recently introduced a unified collaboration solution that integrates presence-based real-time instant messaging, voice, video and data collaboration by using Microsoft Office Communicator protocols.  At a developer level, Microsoft recently announced the public availability of its new Windows Azure platform to support “cloud computing,” which was designed from the outset to interoperate with a broad range of developer technologies, including open source technologies.  Microsoft’s greater commitment to openness has not been lost on industry observers such asTim O’ReillyJoe Wilcox, and Paul Thurrott.

As Commissioner Kroes noted in her October speech, “Microsoft has been on a journey itself . . . doing things on interoperability that were unimaginable just a few years ago . . .”  Microsoft’s discussions with the Commission were lengthy and required that we work through many complex challenges, but hopefully the approach we jointly arrived at may provide a suitable model for addressing competition law concerns relating to interoperability in other products and markets as well.