Europe Proposes Unbundling Media Player

UPDATE: The European Commission accuses Microsoft of trying to monopolize markets for server software and audiovisual players.

Taking a tougher stance on Microsoft Corp.s use of its market power than the United States recently took, Europe is proposing remedies for alleged non-competitive behavior that include greater interface disclosure requirements and potentially the unbundling of Windows Media Player from the operating system.

The European Commission said in a news release Wednesday that it has collected further evidence from consumers, suppliers and competitors that bolster an earlier finding that Microsoft is using its dominant position in the PC market as an advantage in the low-end server market. Insufficient interoperability between Windows and rival products is impeding competition, the Brussels, Belgium, regulator said.


When contacted by the commission, a majority of small, medium and large enterprises in all industries across Europe said that interoperability factored into their purchasing decisions. The commission concluded that the amount of interface information that Microsoft discloses alters consumer choice in favor of Microsoft server products.

The commission said it also found that by tying Media Player to Windows, Microsoft is weakening competition, stifling product innovation and ultimately reducing consumer choice.

Europe plans to impose a series of remedies, including interface disclosure requirements that would allow competitors in the low-end server market to fully interoperate with Windows products. To remedy what it calls the "tying" problem, Microsoft would either have to provide a version of Windows without Media Player included or provide rival media players with Windows.

Depending on Microsofts reaction to the objections and remedy proposals, the commission can impose a fine of up to 10 percent of the companys annual sales, said Wilfried Schneider, spokesman for the delegation of the European Commission in Washington. "If they would comply with the proposals, there would be no fine, obviously," Schneider said. "If they implement the remedies that the commission wants them to, then theres no fine."

"We will not speculate on possible outcomes or the suggested remedies, and will continue to focus our efforts on responding to the commissions concerns," said Microsoft spokesman Jim Desler. "Microsoft takes this investigation very seriously, and continues to work hard to maintain a dialogue that will allow positive resolution to the commissions concerns and this new Statement of Objections."

The commission has not completed its probe, and is giving Microsoft a final chance to comment.

(Editors Note: This story has been updated since its original posting to include additional comments from Microsoft and the European Commission.)