WinInfo Daily UPDATE, January 31, 2005

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In the News

- Way to Go: Microsoft Tweaks EU, EU Tweaks Back

==== In the News ====

by Paul Thurrott, [email protected]

Way to Go: Microsoft Tweaks EU, EU Tweaks Back

WinInfo Daily UPDATE readers might recall something that happened several years ago during Microsoft's US antitrust trial. Claiming that was endeavoring to meet Judge Thomas Penfield Jackson's decision to the letter, Microsoft issued a version of Windows that wouldn't boot. A furious Judge Jackson asked Microsoft why it had done so. In its defense, Microsoft coyly noted that the company had warned Judge Jackson that removing Microsoft Internet Explorer (IE) from Windows would result in a system that didn't work. Microsoft's childish behavior set the stage for its heated relationship with Judge Jackson throughout its US antitrust trial. And although the company seemed to take a kinder, gentler approach to public relations after Steve Ballmer took over the CEO post, evidence has recently emerged that indicates that Microsoft still hasn't lost that immature and impetuous streak that seems to get the company in so much trouble.
Last week, Microsoft announced that it won't appeal a European Union (EU) ruling that requires the company to meet the terms of its EU-imposed antitrust sanctions while the company challenges them in court. One requirement of the sanctions is that Microsoft ship a European version of Windows that doesn't include Windows Media Player (WMP). The EU asserts that WMP had an unfair advantage over competing players because it was bundled with Microsoft's monopoly Windows product. So Microsoft said it would soon ship a Windows version that didn't include WMP.
The problem is the new product's name. In a clear bid to meet the letter of the EU sanctions but not their spirit, Microsoft decided to name the WMP-less Windows version Windows XP Reduced Media Edition. Seriously. Predictably, the EU wasn't amused. Noting that consumers would be less inclined to choose such a product because of its name, the EU said last week that Microsoft was essentially sidestepping its complaint: By providing a version of Windows that sounds less desirable, Microsoft wasn't meeting the EU requirements because the sanctions require that Microsoft not do anything to make the new product more difficult for consumers to purchase.
Late Friday, the EU said that it was considering fining Microsoft up to $5 million a day unless the company complies soon with the EU's antitrust ruling. The time period for meeting the EU requirements is weeks, not months, an EU spokesperson said.
After airing its preposterous product name and letting the EU vent a bit, late Friday Microsoft suddenly agreed to change the name (the company hasn't yet announced the new name), which I have to assume was the plan all along. "We agreed to make the change in the spirit of compromise," a Microsoft spokesperson said, apparently without irony. "This is in the interest of the consumer." Sure it is. But because Microsoft made this supposed compromise only after the company had already announced the original name, Microsoft appears to be both petulant and contrite at the same time. Neat trick. I'm sure that kind of behavior will help clarify the EU's stance on Microsoft's desired settlement talks going forward. My advice to the EU: Announce that you're willing to settle with Microsoft, then withdraw the offer the next day.

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