Microsoft dropped a nearly decade-long legal battle with European regulators Monday, agreeing to key parts of an antitrust ruling that has already led to hundreds of millions in fines.
The world's largest software company will slash the royalties it charges rivals for interoperability information needed to make programs that work smoothly with Microsoft's ubiquitous Windows operating system. It will make access to the data easier for open source developers.
Microsoft said it would not appeal a EU Court of First Instance decision on Sept. 17 that turned down its challenge to a 2004 European Commission order that found it guilty of monopoly abuse.
The major issues with Microsoft have been resolved, but Microsoft could still face penalties for overcharging royalties on interoperability information. Backdated daily fines would stop as of Oct. 22.
EU officials last year cited possible problems with Vista's integrated security software, Internet search, digital rights management tools for copyright protection and software for creating documents in a format similar to Adobe Systems Inc. (ADBE)'s Portable Document Format, or PDF.
Microsoft has now agreed to substantial changes for server software, the EU said, giving greater access to data it previously said was secret and valuable.
The company will now charge a one-time fee of $14,310 to any developer - including those working on open source systems such as Linux - for "complete and accurate" technical information to help make software compatible with Windows. It had previously demanded a percentage of future sales.
Developers - such as IBM and Sun, which sell software based on Linux - will pay a worldwide patent fee of 0.4 percent of revenues for Microsoft's data. Microsoft's original rate was 5.95 percent.
Microsoft will now charge for only 31 server protocols under patent instead of the 154 originally offered for licensing.
Following the Court of First Instance's ruling in September, the company "had no reason to believe that they would get anything different from appellate court," said Keith Hylton, a professor at Boston University School of Law. "Even a deep-pocketed firm like Microsoft has to stop spending money on litigation at some point," he said, noting that the software company also recently withdrew its appeal of a South Korean antitrust decision.
If the software maker does not keep to the terms of the deal, competitors will be able to take the company to Britain's High Court to seek damages.
Regulators warned that Microsoft had "ongoing obligations to continue to comply" with the 2004 ruling that found it guilty of monopoly abuse, ordering it to share information with rivals, market a version of Windows without a media player and pay a fine of $613 million. (info from The Associated Press)