October 30, 2003, 9:28 AM — The European Commission has contacted unspecified hardware manufacturers about Microsoft Corp.'s licensing policy because it suspects anticompetitive behavior, it said Thursday.
Describing the move as a preliminary fact-finding stage, the Commission said it is acting in response to companies that have expressed concern about certain licensing conditions that Microsoft attaches to its Windows operating system.
These so-called "nonassert obligations" prevent hardware manufacturers from enforcing any hardware patents they have that may have implications for software.
If, for example, IBM Corp. patented a method for speeding up the operations of a computer, the company would not be able to prevent Microsoft or any other competing hardware manufacturer from using the technology.
Hardware manufacturers such as IBM, Dell Inc., Hitachi Ltd. and Toshiba Corp., have signed these nonassert clauses because they can't afford to offer computers without Windows, said Thomas Vinje, an outspoken critic of Microsoft and a partner in the Brussels office of law firm Morrison & Foerster LLP.
The Commission sent a series of letters to equipment manufacturers requesting information on the agreements they have entered into with Microsoft, it said in a statement.
The Commission has not reached any conclusions yet, nor contacted Microsoft about the issue, it said.
Microsoft was not immediately available to comment.
The software giant started inserting the nonassert obligations into contracts with hardware manufacturers four or five years ago, according to Vinje.
The inquiry is separate from an ongoing antitrust lawsuit conducted by the Commission. The antitrust case focuses on Microsoft's policy of bundling its audio-video Media Player software into successive versions of Windows.
The European Commission has accused Microsoft of abusing the dominant position of Windows in order to foreclose the market for audio-video software.
The Commission also accuses the U.S. software giant of leveraging its dominance of PC-operating system software into the market for low-end server operating systems.
The inquiry into Microsoft Windows licensing agreements with hardware manufacturers could form the basis of a separate antitrust investigation if the Commission suspects that the U.S. company is using the nonassert clause to stifle innovation among hardware manufacturers.
When a hardware manufacturer "signs a clause like this, it's a pretty big disincentive to innovate," Vinje said.
Vinje's clients include Dell and Fujitsu Ltd.