What the Microsoft Standards Battle is Really About

Microsoft's purpose for suggesting its Office Open XML suite of formats become adopted as an international standard is not so it can leverage its seal of approval from the ISO in selling its Office suite to large businesses and to the public sector. Its purpose is to enable the company to be perceived worldwide as cooperating with businesses and with nations in the drive for interoperability, especially for the benefit of the European Commission which maintains that Microsoft is an unfair competitor.

For that reason, whether or not OOXML is eventually adopted by the ISO come February is not as important as whether Microsoft is perceived as trying to play fair. OOXML could still be rejected, but if Microsoft handles this right, it could still argue it's striving for interoperability and fair competition even in the face of that loss. And being able to maintain that argument is of principal importance.

If there is any greater nightmare than having a US federal court impose oversight on one's business affairs, it's having the European Commission do it. European law is an extremely fragile framework, and the European Union is still a young organization, without the benefit of a few centuries of legal precedent to guide it.

What's more, it is not a federal organization. The EC is a group of elected lawmakers endowed with the authority to render judgments and impose fines. But one of its guiding principles is that it only governs when it can prove it can do a better job of governing than its member states can either collectively or individually. Which means, in the absence of any substantiation for why it must involve itself in European affairs, by default, it doesn't actually have jurisdiction.

For the EC to continue to have validity in Microsoft's antitrust affairs, under what's called the Subsidiarity Principle, it needs continual proof that Microsoft's anti-competitive conduct requires the iron hand of a continental authority. In other words, if Microsoft were to suddenly behave, a court might at some point find the EC has to step aside.

Consider that last sentence very carefully. Wouldn't that be Microsoft's dream state of affairs?

The European Committee for Interoperable Systems is generally on hand to help supply fresh arguments to the EC. Last April, ECIS published a white paper on OOXML stating its researchers discovered files saved by Office 2007 using OOXML (PDF available here) where tags were used to wrap binary content that was clearly Windows-specific.

"Developers wishing to support OOXML on a non-Windows operating system," wrote ECIS, "are faced with a hurdle of trying to reverse-engineer Windows functionality required to support the features present in the documents." Statements such as this, coupled with the accusation that the company is conspiring to replace HTML with XAML, are used to bolster the EC's premise that Microsoft plays unfairly in the broader software community.

The stakes in this debate are actually just as high as they were when the US Justice Dept. pursued Microsoft during the Clinton administration. In a public statement last April, EC Commissioner for Competition Neelie Kroes boasted that her office had the authority to break up the company if necessary, even though it's based in Redmond, Washington.

So last Sunday's vote of the ISO committee on adoption of OOXML is important to Microsoft not so much because of the status of its format as the perception of the company. This is why last week's revelation of company officials (authorized or not) imposing influence on standards bodies in the Nordic states could be a critical, if not fatal, blunder for its public perception strategy. Whether an OOXML translator is included in the next version of OpenOffice is of minimal importance to Microsoft compared to whether it escapes the public perception (some of it earned, historically) of the company as a scheming, conniving monopolist.

This is why the vote is a victory for Microsoft, despite not being granted fast-track status. In light of last week's hijinks, had there been one more vote in Microsoft's favor among the "participating" (P-class) member countries, and had the standard been fast-tracked, the public perception of Microsoft would not have changed. The EC's perception of Microsoft would not have changed.

Microsoft needs to have the opportunity to be seen as going through the motions, as playing by the rules, in order to escape the wrath of a lawmaking body that needs the presence of an evil enemy to justify its own authority.

And while we're on the topic of public perception, this is why last week's agreement between the Justice Dept. and Microsoft to continue its government oversight for the next two years, is also good for Microsoft.

Had DOJ's antitrust oversight period been allowed to elapse, as it would have if nothing were done to prevent it, the company would not have had the protective shield of DOJ independently confirming Microsoft's continued cooperation on a regular basis, as it continues to pursue lucrative business arrangements such as the one it made with Novell. The DOJ's seal of approval is a very strong shield against accusations and implications by the EC that it is making light of, or not taking seriously, governments' mandates that the company behave.

A Microsoft spokesperson told me this afternoon that today's vote represents a "chance for some real dialog. That's why we entered into this process to begin with - to get this feedback from the global community."

This is about perception. What the 1990s taught Microsoft is that it can no longer get what it wants by scheming with - or against - its customers. All through that decade, the company was accused by both competitors and customers of being unjust, unfair, and disrespectful of their needs and of the standards process. Those accusations fueled the legal arguments that very nearly broke up the company. Microsoft wants to cut off the source of fuel.

A long, drawn-out standards process throughout which Microsoft can be perceived as the champion of customers and businesses, coupled with the DOJ Seal of Cooperation, achieves that goal.