Microsoft's European License Dissected

An anonymous reader writes "ZDNet has published a step-by-step explanation of Microsoft's proposed server interoperability license, which was just rejected by the European Commission. The EC said the license excluded open-source vendors and charged unjustifiably high royalty fees -- all bad for business."

Comments

Two lines....

[0x461FAB0BD7D2]

Two lines sum up the entire article:

Can I trust that?
This is Microsoft.

Re:Two lines....

[chrish]

Hey, that's nearly a haiku. How about:

Can we trust them now?
Business as usual.
This is Microsoft.

Re:Cold War ..

[0x461FAB0BD7D2]

In Redmond, Windows licenses you?

Here is a question

[orin]

Is it reasonable to force Microsoft to produce a license that is royalty free - or are people concerned about the cost here.

By looking at the article it seems as though Microsoft wants to charge people royalties who create a competing product when those people have looked at Microsoft's secret API. This seems reasonable - why should someone be able to sell a competing product that does the same thing as a domain controller of global catalog server after they've been able to look at Microsoft's secret APIs?

The reverse engineering clause seems to cover SAMBA and so on - they don't have to pay a license fee because they haven't seen all the secret stuff.

Re:Here is a question

[asserted]

the question is...why does it have to be secret in the first place?

Re:Here is a question

[FLAGGR]

Because the royalties are extremly high, didn't you read the article? Plus, it bars you from doing open source stuff with your code.

Re:Here is a question

[lachlan76]

Because Microsoft are a monopoly, and as such, forcing secret APIs bars most competition out of the market.

Re:Here is a question

[jhdevos]

The reverse engineering clause seems to cover SAMBA and so on - they don't have to pay a license fee because they haven't seen all the secret stuff.

The licence effectively says: if you never ever look at anything this licence covers, then this licence does not apply to you. Sort of like some country having a law that anyone who never sets foot in that country or has any sort of dealings with it, does not have to adhere to that countries laws.

That seems pretty obvious to me. In other words, whatever this licence has to say about SAMBA is moot -- since SAMBA has nothing to do with the licence in the first place.

Jan

Re:Here is a question

[orin]

Yes, but the restriction against "doing open source stuff" is very specific. You are only restricted IF you look at the secret stuff. If you reverse engineer - no restrictions apply. Why should you be able to look at Microsoft's secrets and then build a competing product that does exactly the same thing for free? Reverse engineering is quite different (no look at the crown jewels) and doesn't apply to this license.

Re:Here is a question

[Scarblac]

Is it reasonable to force Microsoft to produce a license that is royalty free - or are people concerned about the cost here.

Remember that this is a punishment for a crime. It's supposed to hurt.

Re:Here is a question

[KiloByte]

If you're a convincted monopolist, many things than otherwise would be legal are considered a breach of the rules.

Re:Here is a question

[Anonymous Coward]

... but it is ultimately your choice, as the developer, as to whether your original code is open or closed.

We are not talking about code here. We are talking about an API.
In my opinion APIs may never be closed.

Re:Here is a question

[aug24]

But this is rather the point of the punishment: People like the Samba team should be able to use the 'secret' APIs, thus preventing MS using them to make their desktop products interoperate better than their competitors!

Justin.

Re:Here is a question

[Godwin O'Hitler]

I could explain why they are a monopoly but I'd rather use this opportunity to ridicule you for using the word boxen.

Re:Here is a question

[ciroknight]

I understand you are a Microsoft apologist, but I'll explain things in simple terms for you.

Microsoft broke the law. They've repeatedly shut out/down other competing products that do the same thing, either by changing APIs to break compatibility, or releasing their own product that forces the general market to break compatibility (in the case of Open Standards). By forcing Microsoft to release the simple documentation of the APIs, they are asking Microsoft to standarize themselves.

Look at it this way. With the APIs remaining "secret", and engineers reverse engineering them for compatibility, all Microsoft has to do to change compatibility is to change a bit, or shift a few bits around, or some other nonsensical thing. Open Source projects /may/ be able to keep up, but if a company were developing a closed source solution, this could slow down their release time by months, if not years.

Forcing Microsoft to release their API information basically puts a standard on the table for other companies/programmers to conform to. They don't lose any market dominance. They don't lose any time. They simply are forced to be compatible. And if that's unreasonable, then Microsoft has won, and Open Source is all for naught.

Re:Here is a question

[ciroknight]

But that's just it. They don't have to reveil a single line of code to publish an Application Programmer's Interface. All the API is, is a guidelines of how to build your product, so that it will be compatible with their product. It's like a car company telling a company that builds transmissions how to hook their transmission up to the car company's Whizbang new V8. Normally companies see this as being a good thing, meaning their original product will sell more. But when you have a monopoly over the market, publishing interoperability information is the very LAST thing you'd want to do. It's like the old saying "Give a man a fish, he knows where to go for fish. Teach a man to fish, you give up your monopoly on fisheries".

Re:Here is a question

[Anonymous Coward]

If they wrote it, shouldn't they have the right to decide whether it is open or not?

At the point where they were convicted of breaking the law, they lost that right to decide. This is a punishment. It is intended to increase competition at the expense of Microsoft. It's supposed to hurt!

Re:Here is a question

[ciroknight]

If you're a convincted monopolist, many things than otherwise would be legal are considered a breach of the rules.

That may be true (aside from some wording issues), but I wasn't aware that trying to run a business and make money without providing valuable gifts to your direct competitors was one of them.

Valuable gift? This isn't a cheese wheel and some bologna we're talking about here. This is a Monopolistic company, deemed guilty, who won't give up the specifications on how to build a compatible product. This is like a car company, not only welding the hood shut, but bolting on the tires with a patented bolt head (only unscrewable by paying the licencing fees), and making the engine run on a special formulation of fuel (a mixture of shit and octane..), that is non-reproducable except from direct sample and duplication. This allows Microsoft to change the Fuel-to-Shit ratio as they please, making your car undriveable on Alternative pumpgas.

Face it. This is a last ditch effort for a brute of a company to stay alive in the business they've dominated for too long. The European Union is only doing what their public ask of them, and their public has been crying out for far too long about Microsoft's shenanigans.

Re:Here is a question

[Anonymous Coward]

> In a free market,

Stop right there. The U.S. is *not* a free market, it's a regulated market that is somewhat free.

To be a free market, the U.S. would need to get rid of:

* Greenspan and the FED
* All federal regulations
* All intellectual property laws (copyright, trademarks, patents)
* corporate law (Corporations no longer have special status over fly-by-night lone vendors or individuals. There would be no limitted liability for companies either.)

Do you *really* want a free market? I sure don't. Given that the U.S. market is not a free market, such regulations are perfectly justified.

Ironically, if you read Adam Smith, you'd realize that he was in favour of regulating Monopolies precisely because when monopolies become big enough: they essentially become their own governments able to make their own laws (contra the free market) and charge their own taxes against competitors (contra the free market) to shut them out.

In essense, an unregulated free market inevitably leads to Oligarchy, which is contra-free market. However, there is a sweet spot where regulated free markets are sustainable, and this, in Adam Smith's words, is what we should be striving for.

Re:Here is a question

[sepluv]

Actually, No. The EC are not doing this because Microsoft are a monopoly or even a near monopoly (which is more accurate), but because they have gained their monopoly by criminal means and are using it to illegally extend their monopoly to other markets.

There is nothing wrong with monopolies, per se; it just means you have make a product which everyone thinks is better than the competitions (think BIND, Apache) unless you have got the monopoly through clandestine criminality, a la Microsoft, as opposed to free market forces.

Re:Here is a question

[Anonymous Brave Guy]

Of course, Microsoft's operating system monopoly can be argued to have a cascade effect on the markets involved (If it wasn't for Microsoft Windows, do you seriously think we'd be running Microsoft Office?)

Personally, I'd say it's the other way around: if it weren't for Microsoft Office, I don't think Windows would ever have taken off. The early Windows versions of Word and Excel were good products, with genuine advantages over their rivals. MS had plenty of competition back then, and it didn't die off by magic. Without those major office applications as drivers, I can't imagine Windows developing the kind of momentum it did in the mid-90s.

That said, IMHO, the problems with Microsoft didn't start with either Windows or Office, both of which competed on their own merits with real competition until they'd established themselves as the dominant players in their respective markets. The problems began when Microsoft started throwing in other toys (IE, Media Player, etc.) on the back of Windows and/or Office, at the expense of competitors those toys couldn't beat in their own right. IME, the court cases have been aiming at the right target on this one.

Re:Here is a question

[sepluv]

Sort of like some country having a law that anyone who never sets foot in that country or has any sort of dealings with it, does not have to adhere to that countries laws

Unlike US law which states the exact opposite: if you have never set foot in the US and have no dealings with it, you are still accountable to US law (so you can be extradited there for `crimes' that are not actually crimes in the country you committed them in) but (as you are not a US citizen) you do not have the rights of the US constitution to contest those laws which villate your natural rights such as freedom of expression.

You gotta love the US of A.

Re:Here is a question

[Ithika]

Thank you for saying that. Someone with a bit of knowledge, finally! :)

I wouldn't ever count myself as a free-market capitalist type, but it pisses me off even more that people who are don't even understand what it means.

I'd be inclined to suggest that the economic situation in the USA is too free, with the continued consolidation of media companies etc remaining unopposed.

Too many people on Slashdot seem to think the be-all and end-all reason for corporations is to make money. As if money was inherently useful in itself. Businesses are only useful if they benefit society; otherwise they destructive.

Re:Here is a question

[QuietLagoon]

If they wrote it, shouldn't they have the right to decide whether it is open or not?

If they had not broken the law, yes. However, they did break the law, so things change.

Open source software will never benefit

[jhdevos]

The European commission has said that the royalties MS asks are 'excessive'. That means that they don't think it is unreasonable to ask for royalties at all. And asking 'per-user' or 'per-server' royalties effectively makes it impossable for free software to get such a licence.

Obviously, the rest of the licence is ridiculous -- MS getting all your code, you having to implement any DRM they choose to put into it, audit-trails, very excessive royalties -- so MS has a lot of room to get closer to what the EU wants without having to let OS benefit as well.

Jan

Re:Open source software will never benefit

[Anonymous Coward]

Probably the european union is going around this in the wrong way. Instead of having Microsoft publish their interfaces to the public, which arguably contain trade secrets important to Microsoft, waranting them to ask for a license fee, they should have imposed on microsoft to comply with a set of open standards (which should be royalty free) that allow for the same kind of interoperability.

Make them share printers using ipp, files using NFS v4, authenticate users using ldap, without extending those standards in incompatible ways.
In such a way, interoperability with microsoft servers could be guaranteed. As an added bonus, Microsoft gets the burden of implementing the interoperability, instead of the third party having to comply with every funny requirement Microsoft chooses to add.

Re:Open source software will never benefit

[Anonymous Coward]

Obviously, the rest of the licence is ridiculous -- MS getting all your code, you having to implement any DRM they choose to put into it, audit-trails, very excessive royalties -- so MS has a lot of room to get closer to what the EU wants without having to let OS benefit as well.

Same old story. Make the first proposal absolutely ridiculous, and subsequent proposals, however harsh, seem reasonable in comparison. It sounds like Microsoft are taking lessons from lawmakers.

Article summary

[ites]

1. You will pay royalties
2. Open source is explicitly disallowed
3. Microsoft can audit your development
4. They get to see your code
5. They get to see your technology
6. They get to choose the auditor
7. You may have to pay the audit
8. Microsoft suggest you "trust them".

ROTFL. Excellent article.

If this is the price of interconnection, it makes it all the easier to justify why Microsoft's server technology should be isolated, relegated, and eventually thrown discarded.

There are, after all, alternatives.

Re:Article summary

[intermediate_represe]

9. All your code base are belong to us

Because

[Catskul]

Because they broke European law and this is supposed to make up for their infraction. (At least thats how I understand it)

Re:Because

[orin]

And it does. They have to allow people that they don't want to allow to look at some of their code. What the license is about is making sure that those people that look at their code don't go off and make a replica operating system without in some way compensating Microsoft. Now the fees are high - but it does seem reasonable that if someone builds a competing product based on the fact that they've actually seen the guts of Microsoft's product (rather than building it independently and separately) that Microsoft is in some way compensated for this. The niggling detail is how much compensation is appropriate?

Re:Because

[lachlan76]

There's a difference between the implementation and the API.

Re:Because

[Catskul]

The were charged with opening up interoperablity. Publishing the API is probably sufficient to do this. No one needs to look at their code. Its like publishing the pinouts to a chip... no. they do NOT need to be *compensated* for this. No one needs to see the guts.

Re:Because

[AstroDrabb]

What the license is about is making sure that those people that look at their code don't go off and make a replica operating system without in some way compensating Microsoft.

Are you serious? Do you _really_ think someone/some company can turn around and build a replica OS from a few "secret" API calls? Get real. Look how many years MS has tried to build an acceptable OS. It wasn't until Win2k that they had anything worth the money. MS spent many years in man hours and billions in development costs. I don't think disclosing some of their server/client communications protocols is going to allow someone to come along and build a Win32 replica.

All of your agruments you have made so far have been as if MS is just some good-ole-company that has just been trying to compete fairly. That is not the case. MS has leveraged their monopoly illegaly for a long time now and have been convicted of that in two separate nations. Now it is time for MS to pay the penalty. The main point of the punishment, IMO, is not what is best for MS (that wouldn't be much of a punishment), but to ask what is best for the industry/society. IMO, the best thing would be to force MS to disclose their "secret" OS API's so that the whole industry can leverage those on an equal footing instead of having all MS software have the leg-up because MS controls the OS.

Your arguments sound as if you believe that MS cannot compete on a level playing field. That if their competitors also have access to the same server API's, then MS will no longer be able to deliver a better product. Is MS really that bad at developing programs that if they are not the _only_ ones to have access to "secret" API's than their non-OS products will fail?

No GPL, but what about Public Domain?

[PhilHibbs]

Section 2.4 states: "The licenses granted in Section 2.1(a) do not include any license right, power or other authority to subject Licensed Server Implementations or derivative works thereof in whole or in part to any of the terms of any other license that requires such Licensed Server Implementations or derivative works thereof to be disclosed or distributed in source code form."

So you can't write LSI applications that are under the GPL, ebcause that licence requires that source be made available, but I can't see anything in that paragraph that prohibits anyone from releasing the source code into the public domain. It's a lot easier to reverse-engineer a protocol when you have a source implementation of it :-)

Re:No GPL, but what about Public Domain?

[roemcke]

Fast forward to paragraph 6 about confidentiality. Just be careful when reading it, or your head will explode...

I think I was the first person in 7,500.000 years managing to read this without getting killed..

Re:No GPL, but what about Public Domain?

[roemcke]

It is here Here

(I just followed the links in the ./ article ;-)

Re:No GPL, but what about Public Domain?

[EnderWiggin99]

It's $5/view.

Pay at the door.

interoperability as in beer

[FidelCatsro]

". The EC said the license excluded open-source vendors and charged unjustifiably high royalty fees -- all bad for business."

The EU Gouvernance may be highly flawed in several areas ,Though it is not made up of total idiots.
I do belive MS really needs to fire its consultants and contract lawyers as Really they should have known this one would get them in trouble.

If you get orderd by a court to comply with an order ,you dont start acting like a 3 year old who has had their crayons taken away for drawing on the walls.
This is exactly what MS tried to do , basically they are saying "Honestly Mother i wont draw on the walls anymore , i will stick to painting on the floor"

""And this is the same Microsoft whose chairman Bill Gates recently lectured the industry that boosting interoperability "will be the only way for companies to make customers' lives easier"?
The very same."
He was telling the truth , but i doubt he cares about making our peoples lives easier , only making the proffits and market share larger

NOPE

[Anonymous Coward]

NO code is required to be released by the EU compliance request. None. Nada (Not NDA). Zip.

MS have broken the law. Either they open up the API to competitors or they go (all of them) to jail. As an individual, I don't get the choice of charging for my time if I am forced to do community service, am I. If I pay a fine, I don't get to deduct costs, do I. If I'm under a restriction order, I don't get to break it because it stops me from going anywhere I want.

So why does MS get to charge for interoperability?

Note also that the EUCD means that if interoperability requires breaking DRM, then you CANNOT reverse engineer. If the protocols are patented, then you cannot bypass them.

See how easy it is.

What I don't get

[Anonymous Coward]

One.

Why fees? Why any? This is not something Microsoft is fucking selling. This is a legal judgement. What, next will Ken Lay be charging hourly consulting wages for the time the government keeps him in jail? By what right can Microsoft even consider this? Is the law that illogical?

Two.

They say this is incompatible with open source. How could it not be? The GPL is very plain; no encumbrances, period. If there are any limitations on how this information can be used, it's incompatible with the GPL. If it's incompatible with the GPL it's incompatible with almost all important open source out there. Microsoft can't put licensing restrictions of any kind on this information and still claim compatibility with open source.

---

So what now? If Europe doesn't want this, what would they accept? Would they accept something that something BSD-ish can be used with, but not the GPL? Would they accept licensing fees if they were smaller? Would they move from Microsoft's anticompetitive actions being an unconvicted illegal action to a legal tax Microsoft may put on open source in exchange for compatibility with SMB? Will they settle for forcing all of open source to adopt some new bizarre unique license which offers the rights of the GPL except for the tentacles of Microsoft's NDAs still reaching through? What does Europe want, what will they settle for? And will they accept the next license? Can we expect hundreds of licenses, all just ever so slightly superficially more giving on Microsoft's part but all still specifically engineered to keep SMB out of SUSE, rejected over and over until a year and a half from now the EU gives in and just accepts whatever Microsoft handed them the week before?

Someone explain to me.

Bad for Business

[joshsnow]

The EC said the license excluded open-source vendors and charged unjustifiably high royalty fees -- all bad for business

Hmm. If the royalty fees were not "unjustifiably high" would this still be found to be "bad for business"?

I like this:

[FoboldFKY]

The licenses granted in Section 2.1(a) do not include any license right, power or other authority to subject Licensed Server Implementations or derivative works thereof in whole or in part to any of the terms of any other license that requires such Licensed Server Implementations or derivative works thereof to be disclosed or distributed in source code form.

That's all one sentence... I guess MS wanted the OSS guys to suffocate just by reading the license. A truly insidious plan...

So what next Windows API's?

[NigelJohnstone]

So if they're doing this for server protocol, what next, future Windows API with a license?

i.e.:

1. You build your corporate application on Windows.
2. Your company becomes dependent on it.
3. Windows XP is discontinued. The new version has a 'new' 'enhanced' slightly different API.
4. You want the documentation.
5. Microsoft says, no problem, but it will cost you.
6. Your screwed, you take the hit of shifting your people over to a new platform, or you take the hit and give Microsoft what it wants.

Re:So what next Windows API's?

[kisak]

That is why the EU ruling is so important; it has set a precedence. If MS tries the old tricks again, the EU commision or the EU high court will fast be able to impose new fines if any competitor complains to them. This is the one reason the EU commision took on MS in the first place, they were feed up with MS being able to do the same monopoly tricks for each new software marked or new technology (the case the EU commision looked at was of course Media players, while the US government had previously found MS guilty with web-browsers). When the US government under the corrupt leadership of Bush didn't want to stop the MS monopoly game, the EU had to step up to the plate.

Bets microsoft will "sort this out"

[danbond_98]

What's the betting that microsoft make some carefully placed "donations" to people in charge of overseeing the changes to this and suddenly very minor changes are accepted as sufficient? I really can't see them letting this get changed too much in case it actually helps open source.

Found guilty = get more money!!!

[Wolface]

MS lawyers have to be the nectar of law schools dude. Either I'm not understanding this thing or this utter BS. I think this is the first time in my lifetime that I've seen a result like this :

"And now it's looking to make more money for breaking the law? So surely Microsoft must be flush enough to give the open-source guys a break? Do they have to pay royalties too?
No."

Can I get sued like that so I can become rich too?

"Microsoft has proposed a royalty fee of 5 percent of your company's net revenue obtained from a software product that has used Microsoft's file and print protocols, and 2.5 percent if the protocols are used for an embedded product."

WOW just wow...

Re:Ugly

[caluml]

The requested URL could not be retrieved

While trying to retrieve the URL: http://bbltxt.com/

The following error was encountered:

Unable to determine IP address from host name for bbltxt.com

The dnsserver returned:

Name Server for domain 'bbltxt.com' is unavailable.

This means that:

The cache was not able to resolve the hostname presented in the URL.
Check if the address is correct.

Try using www.dnsstuff.com to sort out any DNS problems you're having.

Royalties for some servers, but not for others...

[OwlWhacker]

Do you have to pay royalties for accessing a Web server?

Does the Firefox team have to pay royalties to Microsoft because the browser could access an IIS server?

Do you have to pay royalties for creating an e-mail client that collects via POP3 from Microsoft Exchange?

No.

So why should anybody be expected to pay in order to develop an application that accesses a file/print server?

I believe that it's in the best interest of the end-user that such servers should have open protocols and APIs.

This would certainly help prevent illegal monopolies from maintaining their anti-competitive actions.

Re:What does Microsoft have aginst the GPL anyway?

[RotateLeftByte]

Yes.
I guess that there could be a lot of GPL code inside Windows and they don't want to get caught. Therefore, if the GPL dies then they can breathe a big sigh of relief.
Imagine the scale of the damages if they got caught like this. $x for the infringement and $y for each copy of the software sold. If they sufficiently pissed off the Judge (Who Me Surely not says BillG) it could make their stock become Junk. The Judge could even order it all opened up for inspection by interested companies(Now where have I seen that before. Yep SCO) so there is a precident for this type of order. Then watch the numbers of law suits escalate. Naturally, this is just speculation and guesswork and I have no evidence that this is true but...
This is Microsoft...

Re:Amazing

[Dr_Barnowl]

Burger King employees don't speak a different language. You don't need to buy a phrase book to have a hope of ordering a Whopper and Fries. The same is also true in McDonalds, Wendys and many other smaller burger establishments.

Now imagine that instead of a phrasebook, you had to buy a universal translator. And the only people that made them was the burger vendors ; the translator is expensive enough that you'd really only want to buy one. And they don't work as well in the other big chains, and forget using it at Honest Als Burger Shack. And Pizza Hut? Ahahaha.

You're pretty much gonna have to eat Whoppers. The language of burger flippers is complicated, some say deliberately so, and people have a hard time deciphering it. Now, some of the other establishments produce translators that work on BurgerKing-ese. But they're not perfect (although in some cases their grammar is technically better). It would be so much easier if they had access to a proper BK dictionary.

But BK don't want that. They want people to keep buying Whoppers, and avoid the other chains because they speak a "funny" language (some of them don't even have pretty menus!) Now some politos are pestering them. They don't want them to give away the secret recipe (although it's not really a secret anymore, and there are a lot of people who say that the other chains have better sandwiches, or even prefer grilling their own). They don't have to give away the secret recipe ; they just have to make it easier for people to order burgers.

I guess Microsoft are a bit like Burger King ; they do want us to keep buying Whoppers....

Re:Amazing

[Aldric]

No. They broke the law and are now planning to profit from the judgement against them. If they don't like it they can piss off out of Europe, I certainly won't complain about their stuff not being sold here.

Re:Amazing

[mattyrobinson69]

i dont think you understand. Microsoft got to where they are by illegal practices.

They keep their apis closed in order to keep their competitors from competing.

a comparison ive seen is a company which owns 95% of the car market making their cars only work with a particular kind of gas, which is secret.

microsoft arent being asked to open any code, just enough information to make other software products work with their software.

Agreed... But

[maximjd]

While I agree that Microsoft has broken the law, they don't play fair, and that they should either publish a set of API's or conform to some standards - I have to admit that they're doing this the smart way. They throw out a piece of trash like the one discussed and let the EU get up in arms about it - they don't care, what's $5 Million a day to them? But, then they later come to the table - most likely before any deadline with injunctions - and submit an amended agreement. Because Microsoft has made the new agreement more fair than their initial one, it's more likely to be accepted. AND - they'll probably get an extension on coming up with a new agreement if that one is rejected. This is heavyweight bargaining IMHO... And Microsoft has proven they're good at it - sounds a lot like a certain anti-trust case in the US...

A good case for requiring open standards...

[yeremein]

The EU should just mandate that government-owned systems must use protocols and file formats whose specifications are publicly available royalty-free. Any other arrangement allows a vendor (be it Microsoft or anybody) to hold your data hostage.