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Microsoft Acts on Antitrust Ruling

Windows Without Media Player to Be Available in Europe

By David A. Vise
Washington Post Staff Writer
Tuesday, January 25, 2005; Page E05

Microsoft Corp. said yesterday it will comply with a European antitrust ruling and within weeks begin offering a version of its Windows XP operating system without a built-in media player.

The decision by Microsoft, which was not a surprise, is consistent with the firm's strategy these days on antitrust matters: Get them resolved quickly, so the software giant can focus on its business, rather than on legal wrangling.

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The company plans to continue to pursue a long-term legal appeal on the merits of its antitrust case in Europe. That legal appeal could take years.

In addition to offering its Windows operating system without a pre-installed media player, it is also revealing some source code to make it easier for European software developers to make Windows-compatible products.

Microsoft is giving European computer manufacturers the choice of buying Windows with or without the company's favored Windows Media Player, which lets computer users listen to music and watch videos. Both versions of Windows will be offered for the same price, and the company said they will be available through retail channels, but only in European outlets.

"Rather than seeking to suspend the commission's remedies, Microsoft's focus now is on working constructively with the commission on their full and prompt implementation," the company said in a statement. "To that end, Microsoft has made available licensing information for communications protocols and has made available the first versions of Windows without media functionality to computer manufacturers."

The European Commission in Brussels had ruled last year that given its dominant market share with Windows, Microsoft was violating European antitrust laws by bundling its media player with its operating system, thus harming competing media players and limiting consumer choice.

"It is important to note that . . . we will continue our appeal on the merits of the commission's decision," Microsoft said. "We expect to learn later this year when the court will hold a hearing on our appeal. We remain very optimistic as we move forward in this process and are encouraged that the December court order noted a number of Microsoft arguments that could provide a basis for overturning the commission's decision."

The conditions imposed on Microsoft in Europe are more stringent than those imposed on Microsoft in 2002 in the U.S. settlement of its antitrust case.

In December, a European court turned down Microsoft's request to suspend the antitrust remedies while it challenged the merits of the European Commission's ruling. With its actions yesterday, Microsoft is complying fully with the European Union's ruling and the court decision, a Microsoft spokesman said, noting that the company has already paid a fine of about $650 million.

"We had requested that these measures be suspended while the full appeal is being heard, which could take 18 months to two to three years," said Microsoft spokesman Jim Desler. "We lost on that. We are not appealing the court's decision. We are continuing with the case on the merits, and we have paid the fine."

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