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WALL STREET JOURNAL MARCH 3, 2004 TECHNOLOGY
EU May Demand Microsoft Let PC Makers Pick Media Players
By JAMES KANTER . Dow Jones Newswires BRUSSELS-- Instead of trying to force MicrosoftCorp, to sell stripped-down versions of Windows directly to consumers, European Union regulators are likely to demand that computer makers get to choose what multimedia software to install, people familiar with the case said. That tack would be designed to avoid requiring consumers to buy bare-bones operating' systems, as Microsoft has warned would be necessary if its Media Player software were unbundled. It also would be designed to avoid gray-market imports of full-function Windows from flooding into Europe.
Like regulators' suggestion-in the other half onhelr antitrust case-that Microsoft. and its rivals offering server software decide among themselves a way to level the playing field - the idea throws detailed solutions in the high-profile case into the hands of private industry. The EU has found that Microsoft has used its strength in personal-computer software to gain an illegal advantage in related markets, specifically software for large "server" computers and tools for playing audio and video on a PC.
The possible plan comes as Microsoft is trying to resolve the long-running EU investigation. Negotiations are reaching a critical stage. EU Competition Commissioner Mario Monti is preparing to make a final decision on a remedy for the Microsoft case after hearing from EU government representatives, who meet on March 15 and 22 in Brussels.
One person familiar with the case said regulators plan to charge a fine in the area of €200 million (about $250 million) unless Microsoft agrees to a settlement. Settling one side of the case could cut that figure by half.
Any measures agreed to by Microsoft in a settlement are more likely to be applied globally. Regulators have worried that any unbundling order will be ineffective otherwise, because their writ runs only as far as the EU's borders.
In the Multimedia proposal, big hardware makers would choose which addons to install on top of Windows. It remained unclear how much software code Microsoft woUld be obliged to strip from some European versions of Windows under the plan. In a U.S. settlement of similar issues, Microsoft agreed to allow rivals' products to be offered alongside its own on computer desktops, but did not have to share proprietary code.
EU antitrust spokeswoman Amelia Torres declined to comment on the case. Microsoft spokesman Tom.Brookes reiterated the company's position that it is working actively toward an amicable settlement of the case.