EU: No Fee for Windows Source Code

European Commission antitrust head Neelie Kroes told EU lawmakers on Tuesday that Microsoft cannot charge a licensing fee for the Windows source code it has promised to share, unless it can prove such code is "innovative." Microsoft made the offer last week in order to comply with a 2004 court ruling.

The EU fined Microsoft 497 million euros in March 2004, and attached stipulations for compliance. One demand was a version of Windows without the company's media player software, which it released last year, and the other was to open the source code of Windows Server networking protocols to third party developers.

While Microsoft initially balked at the demand, the company later rolled out a licensing program, but the Commission said the move did not go far enough. In response, Microsoft announced a broad program last week to provide the entire source code to Windows Server.

Microsoft was previously given until February 15 to comply with the demand.

"We have now come to the conclusion that the only way to be certain of satisfying the Commission's demands is to go beyond the 2004 Decision and offer a license to the source code of the Windows server operating system," Microsoft General Counsel Brad Smith said.

But Jupiter Research senior analyst Joe Wilcox questioned the significance of the company's move. "Microsoft didn't say how much source code would be licensed. Contrary to some news reports, I expect the amount of source code to be fairly limited," Wilcox said.

Likewise, Kroes said she had yet to receive all of the information from Microsoft regarding its offer. In fact, the EU only heard about the news from the company's own press release, not in advance. Based on Microsoft's response, the EU could decide to enforce a 2 million euro per day fine dating back to December.