EC SEEMS HEADED TOWARD STREAMING ‘MUST-CARRY’ ORDER
A European Commission (EC) antitrust ruling set for release March 24 is likely to force Microsoft to let computer makers install alternatives to its Media Player system for streaming online content, an EC spokesman said Wed. The software giant wouldn’t be required to spin off Media Player, the spokesman said, but it would have to give hardware manufacturers alternate media software programs they could install next to the Windows version if demand exists, he said. An order barring Microsoft from selling its operating system with Media Player would have been too Draconian to address the antitrust concerns raised by RealNetworks, Apple and others, the spokesman said.
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On Mon., European Union member states agreed to accept the EC position that Microsoft is violating European competition laws. Tues., and again Wed., Microsoft CEO Steve Ballmer met with Competition Comr. Mario Monti in an effort to settle the case. Late Wed. evening, a company spokesman told us Microsoft remained “actively engaged with the [EC] in hopes of resolving the issues amicably.” With announcement of the EC’s decision looming, the parties have only a few days to reach any agreement, the spokesman said. Negotiations have “narrowed the differences,” he said, but he wouldn’t elaborate.
The EC has floated 2 possible remedies regarding Media Player, the Microsoft spokesman said. The first would remove the source code for Media Player from the Windows operating system. The other would require Microsoft to ship computer makers for installation 2 competitors’ media players as part of its operating system. Both proposals present problems for consumers and software developers, he said. Removing the Media Player code would mean some 40 features and functions of the operating system wouldn’t work, and some software builders would have problems making their applications work with Windows, he said.
Downloading other media players -- the “must-carry” proposal -- raises security and support issues, the spokesman said. If someone else’s technology creates a security risk, Microsoft won’t have access to the source code, nor will it be as effective in crafting fixes to software glitches, he said. “We feel there are better solutions that can address the Commission’s concerns,” the spokesman said.
“It is time to restore full competition to the digital media market through a remedy that effectively addresses Microsoft’s illegal practices and gives PC makers, enterprises and consumers a real choice of media players,” RealNetworks said.
Industry-group reaction to the imminent decision ranged from glee to calls for continued negotiation. The Computer & Communications Industry Assn. (CCIA) applauded member states for backing the EC’s position. “Microsoft continues to ignore and defy fundamental antitrust and competition laws on a global basis,” CCIA said this week. The decision is merely “the tip of the iceberg,” the group said. “On its own, it will provide some immediate, if not comprehensive, relief and shows to Microsoft that this enforcement body is truly concerned with restoring competition to this vital industry without being sidetracked by political and financial influence.”
But both the Microsoft-backed Assn. for Competitive Technology (ACT) and the Computing Technology Industry Assn. (CompTIA) (on whose board Microsoft sits) urged the company and regulator to find common ground. “The proposed ruling could cost software developers and consumers more than 19 billion euros,” said ACT Pres. Jonathan Zuck. “There’s little need for these measures when the markets for media software and workgroup servers are more competitive than ever.”
CompTIA European Dir. Hugo Lueders said he hoped both sides would come to an agreement that “promotes industry stability through selective, sensible, and minimally invasive government regulation of the [information and communications technology] sector.” Moreover, Lueders said, no agreement should undermine intellectual property rights critical to growth in the ICT industry. “A result that stifles the incentives to compete will harm consumers because fewer parties will be willing to innovate and compete based on those innovations, fearing that the value of their intellectual property will be substantially devalued by government intervention into the marketplace,” he said.