Microsoft Settlement Attempt Falls Short in Europe

[bluebsh]

The European Union (EU) has rejected a Microsoft offer to settle

the company's European antitrust case. Under terms of the proposal,

Microsoft would have supplied competitors' media player products on a

CD-ROM that PC makers could have shipped with new PCs, potentially

opening up those products to a much wider range of consumers.

Microsoft hoped the action would alleviate concerns that the software

giant was abusing its monopoly power by bundling Windows Media Player

(WMP) with Windows. But the EU believed that the CD-ROMs would do

little to improve the use of competing media players because few

people would use them.

Earlier, the EU had suggested two more stringent solutions to the

media player problem. First, the EU requested that Microsoft simply

remove WMP from Windows and ship a less expensive version of Windows

that didn't include the middleware. Second, the EU asked Microsoft to

bundle competitive products, such as Apple Computer's iTunes and

RealNetworks' RealPlayer, with Windows. For obvious reasons, neither

choice was particularly appealing to Microsoft.

To those familiar with Microsoft's amazingly toothless antitrust

settlement in the United States, these media-player-integration

matters might seem like a tired rehash of problems that were never

solved on this side of the Atlantic. But the EU seems curiously

uninterested in bowing to the ineffective remedies that Microsoft has

proposed, and that situation alone could seriously differentiate this

case from the US case. By rejecting what's clearly a half-hearted

response to a real problem, the EU has shown--for now at least--that

it might have the nerve to actually stand toe to toe with Microsoft

and demand that the company change its illegal behavior. We'll know

for sure in March, when the EU's European Commission (EC) presents its

final decision against the company.