The European Union (EU) has rejected a Microsoft offer to settle the company's European antitrust case. Under terms of the proposal, Microsoft would have supplied competitors' media player products on a CD-ROM that PC makers could have shipped with new PCs, potentially opening up those products to a much wider range of consumers. Microsoft hoped the action would alleviate concerns that the software giant was abusing its monopoly power by bundling Windows Media Player (WMP) with Windows. But the EU believed that the CD-ROMs would do little to improve the use of competing media players because few people would use them.
Earlier, the EU had suggested two more stringent solutions to the media player problem. First, the EU requested that Microsoft simply remove WMP from Windows and ship a less expensive version of Windows that didn't include the middleware. Second, the EU asked Microsoft to bundle competitive products, such as Apple Computer's iTunes and RealNetworks' RealPlayer, with Windows. For obvious reasons, neither choice was particularly appealing to Microsoft.
To those familiar with Microsoft's amazingly toothless antitrust settlement in the United States, these media-player-integration matters might seem like a tired rehash of problems that were never solved on this side of the Atlantic. But the EU seems curiously uninterested in bowing to the ineffective remedies that Microsoft has proposed, and that situation alone could seriously differentiate this case from the US case. By rejecting what's clearly a half-hearted response to a real problem, the EU has shown--for now at least--that it might have the nerve to actually stand toe to toe with Microsoft and demand that the company change its illegal behavior. We'll know for sure in March, when the EU's European Commission (EC) presents its final decision against the company.