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Microsoft, Adobe squabble over PDF

Breakdown in talks over the use of Adobe's PDF in Office leaves Microsoft bracing for an antitrust battle in Europe.

Microsoft is bracing for a legal battle in Europe with Adobe Systems, following a breakdown in negotiations last week over the use of Adobe's PDF technology in Microsoft's Office applications suite.

Microsoft, which last October announced it would support Adobe's PDF format in its upcoming Office upgrade, has reached an impasse after four months of talks, a Microsoft attorney said Friday. Adobe wants the software giant to remove the PDF "save as" feature from its beta version of Office 2007 or to charge a fee for it, whereas Microsoft wants to offer that feature for free, said Dave Heiner, the deputy general counsel who oversees Microsoft's antitrust cases.

"The 'save as PDF' feature is the second most popular request we get from customers," Heiner said, adding, "Adobe has told the world that PDF is an open format...and (our competitors') products OpenOffice, WordPerfect Office and Apple already support PDF and tout it as a selling feature. Microsoft should be able to support PDF as well."

Adobe has threatened to file an antitrust complaint against Microsoft with the European Commission if the software giant includes the PDF "save as" feature in its Office 2007, Heiner added.

Adobe was not immediately available to comment.

In the past, the San Jose, Calif.-based software maker has raised objections to Microsoft's plans to put its own XML Paper Specification (XPS) format, developed under the code name Metro, into the upcoming Windows Vista update.

As a result, Microsoft now plans to forgo using the "save as PDF" and "save as XPS" as free features in its upcoming Office 2007 and Windows Vista products, Heiner said.

Microsoft, which last week released a test version of its Office 2007 package, now plans to remove the PDF feature from that beta as soon as feasible. The company does not expect that effort to lead to a delay in the scheduled release of Office 2007, which has already been postponed.

The software giant will instead offer the two "save as" technologies as free downloads, a company representative said.

Competitive concerns
One reason Microsoft is taking these steps is to avoid further clashes with the European Commission, which is reviewing whether to level a massive fine against the software maker, Heiner said. European regulators found that Microsoft engaged in antitrust behavior by bundling in its Media Player with its operating system. They also found that the company had put up hindrances to competitors that wanted to design enterprise software that would interoperate with Windows.

The European Commission is already taking a look at Vista, and it voiced its concerns in March over such issues as the possible bundling of PDF-like formatting capabilities in its operating system.

Another area of concern for European regulators is the possible bundling of Internet search technologies into Vista. However, the U.S. Department of Justice recently shrugged off antitrust worries over a search box in the Internet Explorer 7 browser update in Vista.

Microsoft contends that Adobe is seeking avoid competition, by wanting the software giant to charge for its own XPS technology and also for Adobe's PDF format.

Adobe's desire to hold pricing discussions on these matters may violate antitrust laws surrounding price fixing, Heiner said. He added that antitrust laws prohibit competitors from working together to lower or raise prices and, as a result, Microsoft has refused to enter into such discussions.

Adobe has also informed Microsoft that it does not want the software giant to use its PDF creation software. However, the parties are in licensing negotiations right now over Microsoft using Adobe Reader for PDFs in Vista, Heiner said.

Although talks have stalled on the "save as PDF" feature in Office 2007, Heiner said Microsoft is still open to renewing such discussions.

Microsoft has moved to resolve a number of its legal disputes over the past several years, settling with, among others, the U.S. Justice Department, Sun Microsystems, Time Warner and others. However, the company has seen new disputes crop up in recent months. In addition to the ongoing EU spat, Symantec has hit Microsoft with an antitrust suit over storage technology it inherited as part of its Veritas Software acquisition.