Citing confidential documents related to Microsoft's years long antitrust battle with the European Union (EU), the Financial Times reported yesterday that European Commission (EC) regulators are forcing the software giant to turn over sensitive and valuable internal documentation to competitors for almost no compensation. Microsoft has been fighting the EU over the terms of its antitrust case since March 2004 and the last remaining compliance issue is this technical information.

Microsoft had hoped to recoup some of its cost by charging licensees a royalty of as much as 5.95 percent of any revenues made by licensee products, according to the documentation. But the Times says that the EU is demanding that Microsoft be allowed only a tiny fraction of the royalties it expected. The prices charged by Microsoft are prohibitive and would not allow its competitors to develop products that would be viable from a business perspective the EC complained in documents quoted by the Times.

Microsoft was recently granted a three week extension to respond to the latest EU complaints. In the same confidential documentation Microsoft told the EU that it would respond to the latest statement of objections in full by April 23. We believe we are in compliance with the March 2004 decision and that the terms on which we have made the protocols available are reasonable and non-discriminatory.

Top Retailers Chime In Demand for Vista is Strong

Despite lingering concerns that Windows Vista isn't making much of a sales dent after more than a month of general availability, retailers are reporting that demand for the new OS is indeed strong. Both Best Buy and Circuit City report that consumer interest in Vista based PCs is particularly strong. Best Buy says that sales were up 10 percent in the past month while Circuit City didn't order enough Vista based PCs to meet demand.

Of course, Best Buy and Circuit City have gone down different paths in recent months. Best Buy is surging with profits up 18 percent year over year in the most recent quarter thanks to increased sales of its PC and other electronic profits. Circuit City, meanwhile, is floundering. The company lost 12.2 million in the most recent quarter and responded by firing its top salespeople to save money. Its inability to stock enough Vista based PCs was a direct result of its financial problems Circuit City admitted

Regarding Vista, its success is still somewhat fuzzy. When you combine Microsoft's numbers (20 million units sold in 30 days) with these reports from top electronics retailers in the United States, Vista appears to be doing quite well. But it's worth noting that Vista benefited from pent up demand due to its five year gestation while the market for PCs today is quite a bit larger than it was five years ago when XP first arrived. That said, PC makers are expected to ship more than 250 million units this year and the vast majority of those PCs will use Vista. So no matter how you measure it Vista will be the dominant computing platform at some point in the near future.