Compliance Toolkit

Too little, too late from EU?

Tags:
Windows,
Media Player,
Software,
Antitrust

John Borland CNET News

Published: 08 Mar 2004 14:30 GMT

As the European Union considers restrictions aimed at preventing Microsoft from unfairly using its dominance in PC operating systems to gain control of the market for multimedia software, some say the war has already moved on.

EU antitrust regulators have concluded that the software giant violated competition rules by "tying" its media player to Windows. Now they're weighing remedies due to be announced this month that could go as far as forcing Microsoft to offer computer makers two different versions of its operating system, one with audio and video playback features and another without them.

The idea is to give consumers more choices over multimedia software on the PC. But some say that's yesterday's battle, as Microsoft and others race for dominance in new markets, from portable music players and cell phones to TV set-top boxes and digital cinema.

"Certainly as a practical matter, given how fast Microsoft and the market for technology move, it's very hard for the law and regulatory bodies to keep up," said Mike McGuire, an analyst with Gartner G2, a division of the Gartner research firm.

PC technologies are rapidly converging with traditional consumer electronics devices, promising to wipe out boundaries between computers, televisions, radios and even the telephone. The winners in this transformation have yet to be determined, and competitors are lining up to duke it out. For example, Microsoft faces a suddenly reinvigorated rival in digital music: Apple Computer, whose iTunes Music Store accounted for about 75 percent of all legal digital song downloads in its first year of operation.

In this fast-changing environment, the EU's antitrust ruling could prove to be a sideshow, some analysts said. Among other things, Microsoft is all but certain to fiercely resist significant changes in its software, raising the prospect of further delays and a possible EU defeat on appeal. That possibility could lead EU regulators to seek milder restrictions that call for less drastic measures but stand a greater chance of getting implemented now.

The EU antitrust review is the latest, but not the last, legal challenge aimed at limiting Microsoft's power to turn its past dominance into unfair advantage in new technology markets.