Microsoft: We're not gouging Europe on Windows 7 pricing

Company exec denies that higher EU prices stem from antitrust action

By Gregg Keizer

June 30, 2009 04:01 PM ET

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Computerworld - A top Microsoft executive today denied reports that European users will pay more for Windows 7 because of the company's wrangling with antitrust regulators.

In a statement first posted as a letter to the Financial Times Web site, Bill Veghte, the senior vice president for the Windows business group, said "nothing about this [case] will mean higher prices for Windows 7 in Europe."

Today, Microsoft's public relations firm forwarded the same Veghte statement to Computerworld.

Veghte was countering a Financial Times story last Friday that noted that because Microsoft has unilaterally decided to strip Internet Explorer 8 (IE8) from Windows 7, users would need "a fuller version of the new software when they upgrade." The newspaper, however, also made it clear that Microsoft was selling that software, dubbed "Full" or "Full Packaged Product" (FPP) to differentiate it from editions labeled "Upgrade," at the lower prices of the latter.

Microsoft has said it will price the full editions of Windows 7E -- the "E" stands for "Europe" -- at the lower upgrade prices until at least Dec. 31, 2009. Windows 7E is part of Microsoft's campaign to head off European Union antitrust regulators, who have charged the company with illegally tying Internet Explorer (IE) to Windows, from mandating even more drastic measures.

Microsoft is making the price concession on Windows 7 because of technical issues involving upgrades from Windows Vista. Microsoft will block customers in the EU from doing "in-place" upgrades, which would leave some version of IE on the machine. So it will not be selling "Upgrade" editions in the market, at least not when Windows 7 launches in late October.

Veghte explained the move in his statement. "We typically offer two Windows versions to retail customers: a full version for use on any computer and an upgrade version -- at a lower price -- that can only be used on computers that are already licensed for Windows," he said. "In light of recent changes we made to European versions of Window 7, we will not have an upgrade version available in Europe when we release the new operating system."

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