MICROSOFT tried to fend off the threat of swingeing European Union fines yesterday by offering to make the Windows Server source code — the equivalent of the DNA of the server operating system — available to its competitors.

The surprise concession is the latest move by the company in its high-profile eight-year battle with the European Commission over allegations that it abused its near-monopoly in the market for PC operating systems. The move is designed to rebut the Commission’s complaint last month that the software group is still failing to comply fully with an antitrust ruling issued nearly two years ago. This stated that the group must disclose complete interface documentation to allow nonMicrosoft work group servers to achieve full interoperability with Windows PCs and servers.

Announcing the initiative, Brad Smith, the American multinational’s general counsel, said: “Today we are putting our most valuable intellectual property on the table so we can put technical compliance issues to rest and move forward with a serious discussion about the substance of the case.” He added: “We have given the source code to some of our most valuable customers and to some governments, but never before directly to competitors.”

The Commission, which is still examining whether the price that Microsoft intends to charge licensees for the interoperable documentation is reasonable, later confirmed that it would “study carefully” the company’s offer once it received full details.

But it insisted that it alone would decide whether the terms of the original ruling were being fully implemented. “The decision concerning full and accurate compliance by Microsoft with the European Commission’s March 2004 decision rests with the Commission,” it said in a statement.

Before Christmas the Commission gave Microsoft until yesterday to take further measures to ensure that it would no longer be able to abuse its dominant position. If it failed to do so it faced immediate fines of €2 million (£1.4 million) a day, backdated to December 15 — the original deadline for complying with the ruling.

Ultimately the daily penalty could be as high as £2.8 million, equivalent to 5 per cent of the global turnover ceiling allowed by EU rules. The day of reckoning may now be delayed by up to two months. The company is challenging the Commission’s view that it has not fully complied with all the terms of the 2004 decision. It will submit its appeal by mid-February and can look forward to a hearing in March.

Microsoft has already produced more than 12,000 pages of technical documentation for server software developers who wish to take out licences and offered up to 500 hours of free technical support, worth some $100,000.

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