WinInfo Daily Update, April 26, 2006: Microsoft, EU Disagree on XP N as Antitrust Hearings Continue

Microsoft, EU Disagree on XP N as Antitrust Hearings Continue

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In the News

- Microsoft, EU Disagree on XP N as Antitrust Hearings Continue

- Scott McNealy Steps Down as Sun CEO

by Paul Thurrott, [email protected]

Microsoft, EU Disagree on XP N as Antitrust Hearings Continue

As Microsoft's appeals process in its antitrust case with the European Union (EU) continues this week, lawyers for both the software giant and the European Commission (EC) have squared off over the Windows XP N Editions and the media player rivals that Microsoft says have been given "a free ride." But on one interesting point, the sides do agree: XP N has been a sales disaster. Both sides differ as to why that's the case.

As part of the EU antitrust ruling against the company, Microsoft was ordered to create versions of XP that don't include Windows Media Player (WMP). Microsoft complied by creating the XP N Editions a year later and offering them to the European market at the retail level and via PC makers. To date, fewer than 2000 copies of the software have sold at retail, Microsoft says, and no major PC makers have shipped PCs using these OS versions. This, the company says, indicates that the EU ruling was in vain.

The EU has a different theory. Because it didn't require Microsoft to sell XP N at a discount, the company chose instead to offer the software at the same price as the regular XP versions (Microsoft also did nothing to promote XP N). "If Microsoft now sells these versions at the same price, the commission will have to examine this new policy in the context of the present market conditions," EC lawyer Per Hellstrom noted, adding that the EU might alter its ruling soon to require Microsoft to discount the XP N Editions.

On Wednesday, the hearings addressed another provision of the EU antitrust ruling, which specifies that Microsoft must provide technical documentation to competitors to help them make solutions that integrate with Microsoft's Windows Server products. Microsoft has delayed the documentation project repeatedly and has gotten into trouble with the EU for the shoddy quality of the documentation it's released thus far. At the hearings, Microsoft lawyers complained that the documentation requirement gave its rivals "a free ride" and handicapped Microsoft "in perpetuity."

"The decision condemned a company for not saying yes to a company who requests a huge amount of secret technology for the future," Microsoft lawyer Ian Forrester said, noting that the requirement amounted to giving out valuable intellectual property for free. The EU and various industry groups opposed to Microsoft disagree. "Microsoft is trying to turn this into an intellectual property case when it's not," said Thomas Vinje, a lawyer representing the European Committee for Interoperable Systems (ECIS). "This is a case about abuse of a dominant position, about refusing to provide information to vendors." Indeed, what the EU has asked of Microsoft is a "complete and accurate" support manual that developers could use to write software that's compatible with Windows Server.

Scott McNealy Steps Down as Sun CEO

Twenty-two years after he helped co-found the company, Scott McNealy this week announced that he was stepping down as CEO of Sun Microsystems. McNealy will, however, stay on as Sun's chairman. Jonathan Schwartz succeeds him at the CEO post.

"Sun has been a labor of love for me since 1982, and it has been an honor and privilege to serve as its CEO for the past 22 years," McNealy said. "We've helped shape the industry as it is today and the opportunities before us are immense. I look forward to a smooth transition and to working with Jonathan on company strategy in my continued role as chairman."

Sun reports that McNealy will dedicate his time to Sun's government and academic relationships around the world and will expand his role interacting with key partners. Schwartz, meanwhile, plans to stay the course for the time being. He joined Sun in 1996 and had been president and COO since 2004.

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