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Wednesday, December 22, 2004

Microsoft Loses EU Case

Windows Media Player 10The Europen Union court has upheld the earlier ruling against Microsoft, and the software giant has already said it plans to try to settle the case. The ruling holds in place sanctions against MS that include unbundling Windows Media Player, revealing confidential communictions protocols, and paying over $600 million in fines. More importantly, this ruling makes those sanctions go into effect sooner, rather than later, since the case's main point had been Microsoft lobbying for a stay.

If Microsoft cannot settle, it will undoubtably take as much time complying with the rulings, in the hopes that it will win a future appeal. Most likely, Microsoft will claim that, like in the case of Internet Explorer, Media Player is too tightly integrated with Windows, and will take a very long time to unbundle. Microsoft counsel Brad Smith said the company had not decided yet whether to appeal (waiting for a settlement), but had two months to make that decision. A statement on Microsoft's web site said that the company was hopeful, since the court said it had established a prima facie case in support of its position on the major aspects of the case, arguements which are now required to be considered on appeal.
Rick Sherlund at Goldman Sachs said, "Our view is that the decision itself is not that harmful for Microsoft's business, but rather sets a precedent where the EC could argue that future enhancements to the operating system such as search or antivirus must similarly be unbundled."
It's an excellent point. If courts are going to rule that Microsoft must remove enhancements from the OS because they are anticompetitive, then why should Microsoft make those enhancements? While Media Player was made to compete with Real, it has become a much better product, and, over time, far less "evil" than Real's offering. If you unbundle Media Player, what will people use? The non-user friendly non-supported Winamp? The bordering on spyware RealPlayer?

Microsoft's antivirus and antimalware solutions are not being released to combat Norton, but because consumers have demanded them, but will rulings such as this one hurt Microsoft's ability to release these sort of products? I certainly hope not. While no one wants to see Microsoft take down small but innovative companies, everyone who uses Windows wants it to get better. Well, Windows is better off for Windows Media Player, and that alone makes this ruling a bad precedent.
(via MarketWatch)


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