Free Microsoft Software

Getting a free version of the new Microsoft (Nasdaq: MSFT) Vista OS would be fairly hard. But the European Union wants the world's largest software company to hand over extensive information about its Windows operating system to key competitors. The move would be part of the EU's antitrust settlement which would allow software from Microsoft's rivals to work better with Windows.

Documents obtained by the FT show that Microsoft would like to charge a royalty of 5.95% for the software. But, the EU is suggesting that the license revenue to MSFT be closer to zero. Several companies have been reviewing the proposals--Sun Microsystems (Nasdaq: SUNW), IBM (NYSE: IBM), and Oracle (Nasdaq: ORCL). Their position would appear to be that a high license fee would prevent them from developing profitable products to interact with Windows.

The EU dispute with Microsoft seems to have gone on forever. And, if its antitrust arm wants to leave Microsoft with nothing in exchange for its cooperation, the tug of war could continue for several more years. It is easy to say that Microsoft will face huge fines if it does not cooperate. But, giving away the store may be worse.

Douglas A. McIntyre

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