EU restricts Windows
By Matthew Newman and Robert McLeod
Bloomberg News Service
Microsoft Corp. must sell a version of Windows software without a music and video player and license proprietary information to competitors after a European Union court rejected the company's bid to suspend an antitrust order.
Yves Logghe • Associated Press
Yesterday's decision may restrict Microsoft's ability to add features to Windows and hurt its efforts to fend off corporate- network software competitors in Europe, which accounts for about a third of the company's sales.
A customer browses through Microsoft products at a shop in Brussels, Belgium. A European Union court ruled yesterday that Microsoft Corp. must produce a version of Windows without a media player.
The EU said the order will prevent Microsoft from quashing rival products such as the free Linux operating system and RealNetworks Inc.'s media player.
"This is a very serious setback for Microsoft," said Nicholas Economides, an economics professor at New York University. "It's the first time that a court has told them what they can and can't include in Windows. It's like telling General Motors what features it should have in their cars."
Bo Vesterdorf, president of the European Court of First Instance in Luxembourg, dismissed a request by Microsoft to delay the European Commission's measures pending an appeal of a March ruling that Microsoft violated antitrust law.
Shares of Redmond, Washington-based Microsoft fell 10 cents to $26.97 in Nasdaq Stock Market composite trading. They have dropped 1.5 percent this year.
Microsoft, the world's biggest software maker, will comply immediately with the order, general counsel Brad Smith said. Windows powers almost 95 percent of the world's personal computers, and the Redmond, Wash.-based company will make a version without a media player available to PC makers in January and through software resellers in February, he said.
"This is by far a more serious series of remedies than they have faced before, so maybe these will be the ones they will finally stub their toe on," said Ernest Gellhorn, who teaches antitrust law at George Mason University's law school in Arlington, Va.
Former Competition Commissioner Mario Monti imposed a record $666 million fine as part of his March 24 decision on the case, which began with a complaint by Sun Microsystems Inc. in December 1998. Microsoft paid the fine into an escrow account managed by the commission.
Microsoft hasn't decided whether to challenge yesterday's decision to the EU's highest court. Such an appeal can only be done on a point of law.
