Microsoft Prepared to Strip Media Player

Microsoft reportedly plans to push for a negotiated
settlement of its antitrust dispute with the European Union (EU), even
if it means deleting the Windows Media Player (WMP) from its operating

According to weekend media reports out of Brussels, where Microsoft’s lead
attorney Brad Smith met with reporters, the software giant is willing to stop
bundling the media player with its Windows operating system if it can’t persuade the
court to annul the EU regulators’ decision and to suspend or
substantially reduce the record fine imposed.

Microsoft officials weren’t immediately available for comment.

Microsoft is appealing
the EU’s $613 million antitrust ruling, arguing that it
“undermined innovation” and was not in the best interest of consumers.

The EU’s regulatory body has ruled that Microsoft abused its “virtual
monopoly” with its Windows operating system and broke European antitrust
law governing competition. It also ordered Microsoft to sell a second
version of Windows that does not include the WMP software and to open
its APIs to rival server software makers.

The first hint that Microsoft was readying a WMP-free Windows came
during the company’s financial analyst day presentation on July 29th.
Asked by after the event if the company was preparing a WMP-free version of Windows in case it loses its appeal, Microsoft CEO Steve Ballmer said the company was prepared to comply with any order from the EU, if it is in fact ordered to remove WMP from Windows.

In his most recent briefing in Europe, Smith said Microsoft had
“spent millions of dollars over the past few months” to prepare a
Windows version that would meet the EU requirements and left the door
open for a broader legal settlement.

RealNetworks , which markets the competing
RealPlayer software, plans to oppose the Microsoft request at the
hearings this week.

RealNetworks spokesman Greg Chiemingo told
the company has filed a series of briefs and supporting documentation
and will make a formal presentation to show why the EU sanctions should
be upheld.

“After five years and a very thorough investigation, the commission
concluded that Microsoft was violating their monopoly,” Chiemingo said. “We believe the
sanctions are appropriate and in keeping with antitrust laws. There is
no reason why they should be further delayed.”

RealNetworks has filed its own antitrust
against Microsoft, accusing the rival firm of “predatory
conduct over a period of years by abusing its monopoly power, resulting
in substantial lost revenue and business for RealNetworks.”

During hearings on Thursday and Friday, Microsoft’s Smith is expected to argue
that consumers benefit more from product innovation and competition and
that the legal standards set by the EU’s ruling would alter incentives
for research and development.

According to published reports, Smith plans to use the success of
Apple’s iTunes service and the iPod device to show a
case of direct competition in the digital media market.

On the server side, Smith is expected to use the open source Linux OS
as an example of competition without sanctions.

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