A reflection on the Microsoft antitrust penalty hearing 2006

“Money is not a problem for them.”

A short interview that was taken right after the from on a historical day in the Microsoft antitrust penalty hearings in Brussels, 30 March 2006.

The interviewee is Carlo Piana from Tamos, Piana & Partners (Milano) who served as a counsel to the Free Software Foundation Europe and an intervenor during the hearing.

  • Date of recording: Fri, 2006-03-31
  • Language(s) spoken:

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Q: OK, I’m sitting here with Carlo Piana who represents the FSFE. [He’s] just gotten out of the hearings in Brussels. I’d like to ask you just a few questions. Now, I know that it was a confidential hearing and of course that you probably can’t answer all of them, but I will ask them, and you could tell us what you can tell us. Well, our first question: How did it go today? What can you tell us? And are you able to tell us anything about your statement?

CP: Well, I think that today was the day for the intervenors mainly. And I think that most of the intervenors, especially those supporting the Commission, made a great case against Microsoft, while yesterday was more a Microsoft show. So, they did very well, and we also did very well. My statement covered essentially a couple of issues, one is that although - for whatever the documentation was complete and accurate, the Free Software is excluded from it, so there is no point in discussing very much the accuracy of the documentation if the real competition — which is SAMBA, which is Free Software — cannot enjoy [benefit] from it.

And then, Volker Lendecke, who is a SAMBA team member, explained in details what is our view of the difficulties and why for Microsoft to produce good documentation and that’s because in our view, they have put themself in a situation where compliance is difficult — but the blame is on them. And finally, I compared the disclosure effort of Microsoft with what SAMBA achieved through network analysis alone, with very limited resources and with very limited money, while Microsoft has unlimited resources and almost unlimited money, so if you compare the two results, you have one implementation that ever changes, without specifications, without the possibility to document it, and on the other side you have a standard-abiding implementation, with some technical constraints, of course, because they have to follow Microsoft protocols, and you have a source of reference that Microsoft relies upon for the disclosure of their protocols. That’s interesting.


Q: Well, what’s the next step in this case? Today, as I understand, it was just a hearing — the ruling will come later. If there’s a ruling, what’s the step after that? Is Microsoft able to appeal the ruling?

CP: Yes. We don’t expect the ruling to happen very soon. And, of course, if there is a ruling, there is an appeal, [to] the CFI, the Court of First Instance, pretty much the same way Microsoft has appealed against the 2004 decision, the Monti decision.

Q: OK. What is your impression of Microsoft’s attitude, judging by events today? Bill Gates has said previously that Microsoft will eventually make it through this process, just as it did the US antitrust action. Do they seem to be taking the situation seriously?

CP: I think they are taking the situation seriously, because maybe the European Commission has learned some lessons from the DOJ litigation. And, well, Microsoft said they are fully committed. They repeated that many times. And they are — they were — Brad Smith in particular was very sweet and friendly and saying we are here just to comply, we will do anything it takes, ask us and we will provide you anything you want. That’s the basic message it wanted to convey. Well, we’ll see what they are going to provide.

Q: Now, Microsoft has so much money, couldn’t they just pay the fines forever rather than change?

CP: That’s a possibility. I think that Microsoft doesn’t fear very much the fine per se, but they fear the general aura that this would put on it. So it’s more the publicity, the bad image that this is going to provide that they fear most. Money is not a problem for them.

Q: Now, one worry some had about the March 2004 Final Decision was the licensing. Microsoft was encouraged to license the protocols to competitors on a reasonable, non-discriminatory basis, which of course is discriminatory against Free and Open Source software. I saw on the Microsoft site that the entry level for independent developers is $50,000. Was this issue addressed at the hearings? What is the FSFE’s position on this issue? What wording would you prefer regarding licensing? And, what response would you have for Brad Smith, who just earlier coming out of the room said, “We look forward to working with our future licensees”?

CP: Well, I don’t think that it’s just a matter of money. If the documentation is worth [it], Free Software operators could find ways to finance that. It’s not about the quantity of money they are requesting for it. Of course, the price is not irrelevant. The top license would cost 8.5% of the sales for a licensee, which is very much — for some companies it’s just their margin. But what concerns us most is that you need to control the end-user license so the end-user license shouldn’t be the GNU GPL. So that’s the main problem with the conditions. They want that our implementation, the Free Software implementation of their information, which is a separate product developed by, independently by other companies, would be forced to be licensed under non-Free Software, non-copyleft conditions. That’s plainly unacceptable, because the only real competition now is under the GNU GPL. They will be forced to change their licensing, and they cannot. And they will not. What was that final remark by Brad Smith?

Q: Well, he had said earlier to some journalists, “We look forward to working with our future licensees”.

CP: If the conditions remain the same, I say they are not dealing with the right people.

Q: Microsoft wanted the hearings to be public, but were refused. Why do you think that they wanted public hearings? How does that square with their request that competitors leave the chamber for confidentiality reasons?

CP: It’s unfair to say that this is the case — they didn’t request us to leave. The reason they requested a public hearing may be to turn it into a circus.

Q: Brad Smith claimed before the hearing that the language of the Final Decision was ambiguous; his exact words were “We know that the specifications need to be complete and accurate, but there’s nothing that defines what complete means”. A few minutes ago, he also said, “We’re so pleased we finally have some clarity”. Do you find that statement credible, two years after the Final Decision? Was there any elaboration on what “complete” means from the Commission?

CP: This is completely unacceptable, because the decision was clear. Microsoft just picks up some few words, twisting them a little bit, providing them some specific meaning which wasn’t in the mind and in the context of what these people were saying, such as “on the wire”, and they say, “we are confused”. But if you read all the documents, all the official positions of the Commission, and all our requests, it is not the case.

Q: Why has Microsoft been unable to provide adequate documentation, from what you’ve learned in the hearings? Is it inability? Or unwillingness? Is it that the documentation is too massive, and necessarily so because the code base is so massive and complex?

CP: That’s very hard to tell. For sure, Microsoft’s attitude in code writing is not level with the standard in the industry, and so they are in a worse position than others to provide us accurate and complete documentation. It’s their decision. It’s not a wise decision as I understand from computer science, and maybe this decision — I mean the… for them to be forced to produce specification will help them to make better products, because they will have — at the end of the day, they will have a good way to produce their own software.


Q: Do you see anticompetitive efforts from Microsoft’s offer to provide tech help to competitors instead of documentation?

CP: Not entirely. I say that providing technical assistance instead of good documentation is a way to circumvent the terms of the Decision, but technical assistance is for sure something that licensees can look forward to, but once that they have a sufficient basis to ask the right questions.

Q: Microsoft called into question the competency of the Monitoring Trustee, Professor Neil Barrett, after he reported a month ago that the revised interoperability documentation was “incomplete, inaccurate, and unusable”. Did that issue come up in the hearings? I understand Professor Barrett was there. Were any of the competing scientists Microsoft used to counter his conclusion there?

CP: I cannot judge the competence of Professor Barrett; I have found him as competent as I was expecting, but frankly, it would be too bold by me assessing his credibility and competence. But my only remark on this is that we have professors against professors, and Mr. Neil Barrett is a sort of independent expert picked by the Commission within a range of possible experts nominated by Microsoft, and the ones who are countering him are experts retained by Microsoft. That’s all I can say.

Q: Earlier this month you called Microsoft’s recent offer to license the Windows source code a “poisoned honeypot”. Could you explain?

CP: That’s something that must be attributed to Georg Greve, actually, our president. We call it a poisoned honeypot because it’s something that you upfront you can desire to have, but once you get your hands on, you can be poisoned because after, there is no way to be clean of possible contaminations. The conditions under which Microsoft offers you this source code are more liberal than other examples, but still the risk, the potential risk, of some litigation — maybe unsuccessful — but it’s very small in comparison with the potential benefit. If the potential benefit were higher, maybe somebody could take the chance, but under this situation there’s no gain.

Q: Some might claim that Microsoft has achieved its success with superior products, and cases such as this one are just an opportunity for the losers in the market trying to get some money from the winner. What would you say to them?

CP: Antitrust is not about preventing somebody to be successful and eventually, possibly, gaining 90% or 100% of a market. It’s not to abuse this position, not to prolong this situation indefinitely because you have the power to do whatever you want, because anybody will follow you because simply you own the key to the door, to the technology. So, they are the doorkeeper — they have obligations which [those] who are not the doorkeeper do not.

Q: Today, the SAMBA project is moving forward, with the second Technology Preview of version 4 which will bring Active Directory compatibility. Will today’s hearing have an impact on the next version of SAMBA?

CP: I don’t think so.

Q: And finally, will you be at the Court of First Instance in Luxemburg next month for the Microsoft appeal to the Final Decision?

CP: You bet I will.

Q: Carlo Piana, thank you very much.

CP: You’re welcome.



Interview transcript: Carlo Piana of Tamos Piana & Partners, Counsel to the Free Software Foundation Europe
30 March 2006 7:20PM interview, Place: Schuman, Brussels, Belgium Interviewer: Sean Daly


Comment by Pamela Jones from groklaw.net:

Keep in mind that English is not Mr. Piana’s native language, and he was incredibly gracious to grant the interview at all after such a very long day. Two days, actually. We’ve heard Microsoft’s reaction to the hearings (“breakthrough”) and that of those not in the Microsoft camp (“nothing new”), but now we have the opportunity to hear another view, that of FSFE, not details of the hearings (all have been asked not to divulge information about the hearings themselves) but more of an overview of developments so far particularly regarding documentation, licensing terms, and what happens next.