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FSFE in Samba case: Microsoft's defiance backfired

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Luxembourg, May 25 - FSFE played a key role at a Microsoft hearing before the European Union's General Court on Tuesday, helping explain the intricacies of Free Software servers.

The hearing was called to consider Microsoft's challenge to a EUR 899 million fine imposed by the European Commission in 2008. Microsoft had failed to carry out remedies imposed for its violation of EU antitrust law. A ruling is expected for later in the year.

Microsoft was required to provide interoperability information that would enable others to hook up to its products so they could compete with its workgroup servers. Key among those was the Samba team, which is the only surviving competitor in the workgroup server market. Only after a European Union court acted in 2007 to uphold nearly all of the Commission's 2004 decision did Microsoft finally meet the Commission's requirement to comply.

"In order to compete, the Samba team only needed the mundane information about how Microsoft computers talk to each other," said Tridgell. "There is nothing innovative here. All the innovative bits are either already published by Microsoft's own researchers, or are contained in the Microsoft program source code – and we have no interest in seeing that. The innovation certainly isn't in the protocol specifications."

Tridgell appeared before a panel headed by Chamber President Nicholas James Forwood of Britain, which also included judges Franklin Dehousse of Belgium and Juraj Schwarcz of Slovakia. Microsoft, the Commission, and outside intervenors on both sides were also represented. FSFE and the Samba team were represented by lawyer Carlo Piana.

The problems date back to the Commission's 2004 decision that Microsoft should release interoperability information. After that, the company played for time and waited three years to comply with the Commission's demands. Explaining the significance of Samba for a competitive software market, Chamber President Forwood said: “Samba is the funnel through which the effects on the market will be produced.”

Microsoft contended that the information it had to provide was valuable and innovative, and originally sought to charge high prices for it. Tridgell demonstrated that the valuable information had already been revealed by Microsoft in research papers and other public fora. By contrast, the information that Samba team needed to interoperate with computers running Microsoft Windows was neither original nor innovative.

“Microsoft didn't keep this information secret because it was valuable; the information was only valuable because it was kept secret,” Piana told the Court on behalf of FSFE. He said it let Microsoft preserve its dominant position, because no other software was able to talk to the company's systems. “The company used these three years to further entrench its dominant position in the market.”

“Microsoft is acting like a gambler who doubled up on a losing bet, and now wants his money back,” said Nicholas Kahn, the representative of the European Commission. By waiting three years before complying with the Commission's decision while the clock on the fine was ticking, Microsoft set the stakes very high – and finally lost.

“In this case, Europe's competition regulators have shown their bite. We hope that the court will uphold the fine and make it clear that companies in Europe have to play by the rules,” said Karsten Gerloff, President of the Free Software Foundation Europe. “FSFE does many things to help foster the growth of Free Software. We're proud to help make the case for Free Software in a forum such as this, where we believe we are providing a public service.”

Workgroup servers handle tasks used in small groups – printing, signing in, and allocating permission to access particular files. The Samba project not only provides an alternative to Microsoft's workgroup server. It has come up with an alternative that is better in many respects. For example, the Samba team used the trivial information provided by Microsoft to build an innovative system that runs on very small, cheap computers -- something that Microsoft's software cannot do.

“The hearing established that Free Software is central to restoring competition in the workgroup server market,” says Piana. “Everyone agreed to this, including the judges. This case matters because it highlights that interoperability is more important than a company's interest in keeping its dominant position.”