EU to Microsoft: Unbundle or Else

UPDATED: European regulators are warning Microsoft to remove several features
from the upcoming Windows Vista operating system or face being barred
from the European market.

The latest threats come a day before EU
regulators meet to decide whether Microsoft is complying with a 2004 antitrust ruling.

At tomorrow’s hearing, Microsoft could also face an additional $100
million fine. Next month, the software goliath plans to appeal a $613
million fine stemming from a 2004 EU decision that Microsoft violated
antitrust regulations. Today’s events happen as Microsoft recovers from
last week’s delay
of Vista.

In a letter to Microsoft CEO Steve Ballmer, EU antitrust chief Neelie
Kroes outlined concerns regulators have about applications bundled with
Vista.

While Kroes told the Wall Street Journal she hasn’t decided whether
to open a new investigation into Microsoft and Vista.

EU spokesperson
Jonathan Todd told internetnews.com that “it is in Microsoft’s own
interest to clarify these issues as soon as possible so as not to have
any doubts about the legality of Vista hanging in the air.”

A Microsoft spokesperson said the copmany has a responsibility to make its products better and more secure for its customers in a manner that respects all laws and
competition standards.

The spokesperson added that the company is willing to discuss its plans “anytime and
anyplace.”

A topic in the letter, which the commission refuses to release, is
the possible bundling of software and services available separately from
Microsoft or other vendors, Todd said in a statement.

Internet search,
digital rights management and PDF creation software are some of the
features under EU scrutiny.

A group of rival companies, including IBM, Sun and Oracle, filed a February complaint
with EU regulators urging European antitrust officials bar a number of
features from being bundled with Windows.

The European Committee for
Interoperable Systems (ECIS) said bundling of applications within
Windows threatened consumer choice and competition,
internetnews.com previously reported.

Microsoft has had mixed success with bundling to dominate
markets. Although the inclusion of Windows Defender to guard against
spyware will likely push out many security players, Internet search
remains the domain of Google, according to Joe Wilcox, a JupiterResearch analyst.

For Microsoft’s part, it denies it will offer a full-blown security
product and Vista will provide a variety of search engines for users to
choose from, according to the software company.

Despite Microsoft’s
protestations, “Windows is the largest software distribution platform on
the platform,” according to Wilcox.

Microsoft has made some concessions to Europe’s previous concerns
about its bundling practices.

In 2005, the company unveiled Windows XP N, a version of its operating system sans Windows Media Player
(WMP).

Microsoft recently appealed a South Korean
decision
requiring two versions of Windows, one without WMP and
Windows Messenger and one with links to third-party media and IM
applications.

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