Concession: Microsoft has agreed to make part of the source code of its Windows software available to its competitors in an unexpected development in the ongoing anti-trust case between the company and the European Commission.
The move will make it easier for other companies to provide products that integrate with Windows. Microsoft had previously rejected calls for it to open up its source code.
Making the announcement, Microsoft general counsel Brad Smith said that it would "put to rest" any concerns over Microsoft's compliance with the commission's decisions and was a "substantial step" for the company.
"We have provided access to our source code to some valuable customers and some governments, but we have never taken this step before, to license it to our direct competitors," said Mr Smith.
Mr Smith stressed that Microsoft would be providing a reference licence for the code, which allows competitors to "refer to it, study it, learn from it", but they would not be able to copy it or use it directly in their own software.
The move is in response to objections raised last December by the commission, which said that Microsoft was not going far enough to provide the information required as part of its March 2004 anti-trust ruling.
At that time, the commission found that Microsoft was abusing its near monopoly position in desktop PC operating systems to gain market share in server operating systems and media players.
Microsoft is appealing that decision and the case will be heard at the European Court of First Instance in Luxembourg next April.
It hit Microsoft with a record €497 million fine for abusing its market power in the EU. Microsoft was also ordered to release a version of Windows that did not include the Windows media player and to disclose to competitors the protocols necessary for their products to interoperate with Windows.
Microsoft has now gone beyond the requirements of the 2004 ruling, which explicitly stated that it did not require Microsoft to reveal the Windows source code.
Microsoft claims releasing part of the source code will answer any remaining questions as rival software developers will be able to see exactly how the communications protocols have been implemented.
"For developers, source code is the ultimate, it's the DNA," said Mr Smith.
To comply with the commission's 2004 decision, Microsoft established a licensing program for competitors called the work group server protocol program (WGSPP), which enabled them to purchase a licence to use the communications protocols in their software.
The US company had initially provided 12,000 pages of technical documents to the commission and users of the WGSPP.
In December, the commission said in its view, Microsoft had not provided complete and accurate information.
Mr Smith said that in December, Microsoft offered 500 hours of technical support to licensees who had any further questions, but that the decision to license the source code itself would put the issue "to rest".
However, he admitted it "does not lay to rest all issues of compliance" and that the commission was reviewing Microsoft's pricing structures.
At the press conference in Brussels yesterday to announce the new licensing program, Mr Smith said he was more confident of Microsoft's position than he had been in 2004.
