- The Washington Times - Wednesday, March 13, 2002

BRUSSELS (AP) Microsoft Corp. is proposing concessions to the European Union that go beyond those agreed to in the United States to help rivals ensure their equipment can operate with its dominant Windows software.
Microsoft's chief European attorney, John Frank, said the two new measures are in addition to steps included in the software giant's proposed settlement with the U.S. Department of Justice, but are related.
"All go toward increasing the amount of information we share, and thereby, helping interoperability," he said in a telephone interview from Paris.
Microsoft opponents attacked the announcement as a "public relations exercise" that fell far short of addressing the anti-competitive charges made by the European Union.
"This ain't going to cut the mustard," said lawyer Thomas Vinje in the Brussels office of Morrison & Foerster, which represents a U.S.-based industry group that opposes Microsoft.
Regardless of its actual value, the latest move is more evidence of Microsoft's switch to a more conciliatory tone in recent months as it strives to settle the EU case and avoid a hefty penalty, outside lawyers said. Last December, Microsoft waived its right to a hearing, saying it wanted to focus on reaching a settlement.
The EU said last August that it believed Microsoft was abusing its dominant position in desktop software to horn in on the market for servers, which link personal computers in networks.
Part of the charge stems from the introduction of the Windows 2000 operating system. In it, Microsoft included a previously existing technology called Kerberos, developed at the Massachusetts Institute of Technology.
Kerberos secures networks by encrypting the passwords sent from a computer to a server, keeping them safe from eavesdroppers. It is distributed for free and is widely used in networks running UNIX, Window's main competitor in the market for server operating systems.
Rivals like California-based Sun Microsystems charge that Microsoft changed its version of Kerberos to make it incompatible with the freely distributed version. Servers running UNIX cannot accept passwords from computers running Windows 2000.
Mr. Frank said Microsoft had addressed this concern by submitting information on its modifications to an industry body two weeks ago.
By August, Microsoft also will license the SMB file-sharing protocol around another of its standards, known as Common Internet File System. SMB allows computers tied into a network to talk to the server.
EU spokesman Michael Tscherny said the commission had yet to receive the proposals, so he could not comment on them.
But Mr. Vinje, representing the Computer and Communications Industry Association (CCIA), said Microsoft's proposals are insufficient because they address only a couple of problems from the past.
"I'm pretty sure the commission is not going to be satisfied with being solely backward-looking in its remedy," he said.
"They're going to insist on a broadly based remedy, formulated in a way that it has teeth and is effective into the future."
The CCIA has joined the EU case as an interested third party. Its membership includes Netscape Communications Corp., Intuit Inc., AT&T; Corp., Oracle and Sun.
While EU regulators initially said a decision would come early this year, they have suggested recently the decision may be delayed until after the U.S. court rules on whether to approve the settlement worked out by Microsoft and the Bush administration.
Under EU law, the commission could fine Microsoft up to 10 percent of its worldwide sales if it finds it guilty of antitrust violations.

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