Microsoft on the Cusp


When Microsoft made its first proposal to the European Commission to settle the latter's investigation of Microsoft for possible anti-competitive behaviour in the browser sector – which was to provide a version of Windows 7 *without* any browser – I noted that this was intentionally useless, and must be the opening gambit in its regulatory chess match. So it comes as no great surprise that Microsoft has now come back with a rather more sensible suggestion:

Under our new proposal, among other things, European consumers who buy a new Windows PC with Internet Explorer set as their default browser would be shown a ‘ballot screen’ from which they could, if they wished, easily install competing browsers from the Web. If this proposal is ultimately accepted, Microsoft will ship Windows in Europe with the full functionality available in the rest of the world. As requested by the Commission, we will be publishing our proposal in full here on our website as soon as possible.

An ancillary document [.doc] gives details of how that ballot screen will work:

The Ballot Screen will give those users who have set Internet Explorer as their default web browser an opportunity to choose whether and which competing web browser(s) to install in addition to the one(s) they already have. The Ballot Screen will provide two links associated with each web browser. An “install” link will connect to a vendor-managed distribution server, which, upon the user’s confirmation, can directly download the installation package of the selected web browser (and only a web browser, including software to update the web browser only) for local execution (the resulting situation will therefore equal a scenario in which the user himself had downloaded and executed the installation package without being aided by the Ballot Screen). An “information” link will connect to a vendor-managed web page from which the vendor can offer users more information about its browser and installation options. Users will be able to select one or more of the web browsers offered through the Ballot Screen. Microsoft shall ensure that in the Ballot Screen users will be informed in an unbiased way that they can turn Internet Explorer off.

That sounds eminently reasonable – unlike the first proposal. Indeed, the whole of the “Proposed Commitment” document, from which the above paragraph is quoted, seems surprisingly fair. For example, it includes clauses such as the following:

This Commitment is intended to allow for an unbiased choice between Microsoft web browser and competing web browsers for both OEMs and end users. Microsoft will not circumvent or attempt to circumvent this Commitment.

And even:

Microsoft shall not retaliate against any OEM for developing, using, distributing, promoting or supporting software that competes with Microsoft web browsers, in particular by altering Microsoft's commercial relations with that OEM, or by withholding Consideration.

Which is tantamount to admitting that it *might* have done such things otherwise.

But most surprising is the fact that the “ballot screen” for browsers is only part of what Microsoft is proposing to the European Commission:

As the European Commission announced, Microsoft’s proposal also includes a public undertaking designed to promote interoperability between third party products and a number of Microsoft products, including Windows, Windows Server, Office, Exchange, and SharePoint.

Like the Internet Explorer proposal, the interoperability measures we are offering involve significant change by Microsoft. They build on the Interoperability Principles announced by Microsoft in February 2008, which were also based on extensive discussions with the Commission, and they include new steps including enforceable warranty commitments.

Again, reading through the detailed Proposed Interoperability Undertaking (.doc), the abiding impression is of thoroughness and, well, fairness:

Microsoft shall ensure that third-party software products can interoperate with Microsoft’s Relevant Software Products using the same Interoperability Information on an equal footing as other Microsoft Software Products.

Microsoft shall:

Make Interoperability Information available to interested undertakings in the way outlined in this Section for the purposes of achieving interoperability.

Support open, public standards in Microsoft’s Relevant Software Products in the way outlined in this Section.


Access to and use of the Interoperability Information shall be subject to reasonable and non-discriminatory terms.

Now, as I've noted several times before, such “reasonable and non-discriminatory” terms aren't necessarily much use to free software, since they can be both and still incompatible with major licences like the GNU GPL. But Microsoft appears to have addressed this issue:

Access to and use of the Interoperability Information shall be subject to no more than a nominal upfront fee and licensing terms which are compatible with Open Source Licenses.

This seems to mean that free software projects will be able to pay a relatively small upfront fee, with no per copy licensing – necessary to allow copies to be made and passed on without worrying about such fees.

And that's not the only explicit concession to free software in the document:

Support for Open Document Format (“ODF”). Microsoft commits to support ODF in Microsoft’s Primary PC Productivity Applications, as described below.

Microsoft shall implement ODF 1.1 support, and include ODF in the “save as” drop down box, for Word 2007, Excel 2007 and PowerPoint 2007 in Office Service Pack 2 (“SP2”), and shall give customers who install SP2 the ability to set ODF 1.1 as their default format. This means that Microsoft shall support the ODF standard and provide a warranty as specified in the general provisions outlined in Section B.I of this Undertaking, effective 30 October 2009.

Now, I'm not familiar enough with the ins and outs of the ODF standards to know whether there's any wiggle room for Microsoft in those commitments, but my naïve reading is that they are committing to support the latest versions in a pretty comprehensive way (I'm prepared to be corrected on this, if wrong). It certainly seems as if Microsoft has accepted that it must support ODF properly if it is to satisfy the European Commission.

Given the thoroughness of these proposals, it's clear that they weren't knocked up in a couple of weeks: presumably, there were being prepared even when Microsoft made its initial offer to drop Internet Explorer completely. It knew that this wouldn't be acceptable, but following its well-established habit of being as awkward as possible, threw it out as a suggestion anyway.

Its hand has probably been forced because of external factors. It's an interesting coincidence that these latest offers comes at precisely the time when Microsoft has announced its worst-ever financial results:

Microsoft Corp. today announced revenue of $13.10 billion for the fourth quarter ended June 30, 2009, a 17% decline from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $3.99 billion, $3.05 billion and $0.34 per share, which represented declines of 30%, 29% and 26%, respectively, when compared with the prior year period.

The fact of the matter is that Microsoft simply cannot afford to be hit with further billion-Euro fines by the EU. The days when it could swallow such punishments and carry on offending are long gone. The world has changed, and so has Microsoft. It is no longer driving the computing industry, but cruising along with the considerable momentum it has built up over the last decade.

It's also worth pointing out that the latest concessions by Microsoft are an important vindication for the European Commission and its approach of getting tough with the company. Despite the scepticism of many observers – especially in the US – the offer to allow other browsers to be installed on new PCs running Windows, and Microsoft's commitment to provide detailed interoperability information for reasonable upfront payments is a big win for openness in general and open source in particular, which should benefit greatly from these moves.

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