Remedies may not help Microsoft's competitors

IDG News Service - PARIS -- IT industry watchers and legal observers were skeptical today of the significance of a ruling by a European court that Microsoft Corp. must comply with antitrust remedies imposed by the European Commission. Analysts doubted the power of the remedies to achieve their stated goal of boosting competition in two key software markets: workgroup servers and media players.
On March 24, the commission gave Microsoft 90 days to unbundle its media player software from its operating system and sell a version of Windows without Windows Media Player, and 120 days to give its competitors access on reasonable and nondiscriminatory terms to the technical interface information needed to make non-Microsoft workgroup servers interoperable with Windows PCs.
Microsoft appealed the decision and, separately, asked the European Court of First Instance to suspend the remedies until the appeal was heard.
The court announced today (see story) that it had dismissed Microsoft's request for a suspension, and to have decided otherwise would have effectively neutralized the commission's antitrust decision, said Anthony Woolich, a partner at Lawrence Graham LLP, a law firm specializing in European competition.
Microsoft already has a version of Windows without Windows Media Player ready for market, according to the commission, which expects the unbundling remedy to allow media player software vendors like Apple Computer Inc. and RealNetworks Inc. to persuade computer manufacturers to install their technology in place of Microsoft's. However, analysts and Microsoft alike are skeptical of the benefits of the ruling to competitors.
The unbundling remedy is a minor irritant for Microsoft, as the prevalence of Windows Media format files already in circulation means users will have no choice but to install the Microsoft player, said Philip Carnelley, research director at Ovum Ltd. in London.
Woolich said the bundled version of Windows with the media player will remain popular. "The way that part of the ruling was phrased doesn't prohibit Microsoft from supplying Windows with Media Player at the same price as the version without, so there's very little room for competition in the marketplace. If you can get something for free, why would you not take it?" he said.
Microsoft will still be able to use products like the Media Center Edition of Windows, or Portable Media Centers, to push adoption of Windows Media Player, according to Paul Jackson, principal analyst at Forrester Research BV in the Netherlands. "For Microsoft, it's slightly inconvenient having to take some stuff out of Windows, but because of their power in other areas ... it's not going to have much effect,"