Microsoft: Vista Will Be On Time, Will Satisfy EU Officials

BRUSSELS, Belgium – Microsoft Corp. (MSFT) said Friday it is on schedule to deliver the new Windows Vista operating system and agreed to changes in several key sectors in an attempt to soothe European and Korean antitrust worries.

The Redmond, Wash., software company said it still plans to deliver the long-delayed Vista to its volume license customers around the world in November and to the general public in January.

Brad Smith, the company's general counsel, said Microsoft made changes to Vista's search service and security system on the advice of European antitrust officials and had an international standards organization look at its new file format.

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"Having received guidance from the (EU) Commission, having had a constructive dialogue, and having made each of the changes we were advised to make, we felt confident we can move forward in compliance with EU law," Smith said in a conference call.

Smith said the company also believes it has solved trade worries in South Korea, following talks with the Korea Fair Trade Commission.

Despite the political wrangling, Microsoft said it remained on track to deliver Vista under the schedule promised in March, when the company announced it was delaying the consumer release of Vista and missing the holiday sales season to enhance security and other functions.

"Windows Vista is probably one of the most heavily scrutinized products in the history of technology," Smith said. "It is certainly the most heavily scrutinized product in the history of information technology."

The EU antitrust office, which warned this spring it had concerns about the new Windows software, refused to back Microsoft's optimism that European concerns had been met.

"The jury is out," EU spokesman Jonathan Todd said. "It is up to Microsoft to shoulder its own responsibility to ensure full compliance with competition rules."

He said it was not the Commission's role to take pre-emptive action or pre-approve products.

"We will closely monitor the effects on the market and in particular examine any complaints," Todd said.

In a statement, Smith said Microsoft believed it received enough guidance "to ensure that we're in compliance with our competition law obligations, and we are moving forward to make Windows Vista available on a worldwide basis."

EU antitrust chief Neelie Kroes and Steve Ballmer, Microsoft's chief executive, spoke on the phone Thursday.

The EU and Microsoft have fought for years over previous versions of Windows, and the 25-nation bloc already levied a record $613 million fine on Microsoft in 2004 and ordered it to hand over technical information to rivals, saying it had deliberately tried to cripple them as it won control of the market.

Over the summer, the EU fined Microsoft $357 million and threatened more penalties, saying the company failed to obey the 2004 antitrust order to share the technical information. Microsoft said it would appeal the fine.

The EU's executive Commission had already warned Microsoft it had to take care to avoid antitrust problems with Vista, which will include an Internet search and a PDF-type document reader that could pose problems for current rivals.

Security vendor Symantec Corp. (SYMC) has accused Microsoft of abusing its monopoly in deciding which security products can run on Vista, arguing that Microsoft is deliberately withholding information needed to develop products that work on the new system.

Smith insisted Microsoft had specifically worked on security, the document reader and the search system to make it compatible with European law.

Todd was noncommittal on whether Microsoft's constructive tone on Vista would help end years of acrimonious debate: "Quite honestly? Time will tell."

Microsoft shares rose 37 cents, or 1.3 percent, to $28.59 in morning trading on the Nasdaq Stock Market.