Microsoft to Open Vista to Competitors' Software

By Sara Kehaulani Goo
Washington Post Staff Writer
Thursday, July 20, 2006

Microsoft Corp. said yesterday that it will allow competitors' software to appear more prominently than its own on the new Windows operating system, scheduled for sale next year.

The European Commission fined the software giant $357 million last week for not moving fast enough to make its systems more open to competition, and the two parties have yet to resolve a few issues about Vista, the operating system that will succeed Windows XP. Microsoft outlined a dozen "guiding principles" yesterday to show that it will comply with demands from government regulators here and abroad who are closely monitoring Vista.

"This is the responsible thing for us to do," Brad Smith, the company's general counsel, said after a speech yesterday at the National Press Club. "Users have control of their PCs. Users decide what remains."

Smith said that Vista will not impose default settings for Microsoft's MSN search engine on the Internet Explorer browser and that users will be able to decide if they want a Google or Yahoo search box built into the browser instead. In addition, Microsoft said it would license more of its patents to third parties and support industry standards to make its products more compatible with competitors'.

Vista will still include such Microsoft products as Explorer and Windows Media Player, but Smith said consumers could easily replace them with programs made by competitors.

It was not clear whether consumers would see substantial changes in the way PC manufacturers sell and bundle hardware and software, industry analysts said, though they said they welcomed Microsoft's more candid and accountable approach.

"It's good that Microsoft is coming out with explicit statements of how they're going to behave," said Chris Swenson, director of software industry analysis at NPD Group Inc. But he noted that legal and regulatory issues are forcing Microsoft to "play by different rules" than in the past, when the company was more aggressive about dominating competitors.

Eight of the 12 principles outlined by the firm are already requirements resulting from the Justice Department's antitrust lawsuit against Microsoft, which was settled in 2001. Several of the requirements expire next year, but Microsoft said it planned to continue with them. A spokeswoman for the Justice Department said yesterday that Microsoft's announcement "indicates that the principles of the judgment will continue to benefit software developers, computer manufacturers and consumers into the future."

Ken Wasch, president of the Software & Information Industry Association, which has been critical of Microsoft's practices, said he doubted consumers would see much change because Microsoft still has tremendous power in the pricing of its operating system and other products bundled together.

"This is part of a very effective Microsoft charm offensive," Wasch said. As long as Microsoft continues to sell its operating system with its own browser and media player, "there's no economic incentive" for a PC manufacturer to bundle Vista with a competitor's products, Wasch said. "They get no pricing differential."

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