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Microsoft swimming upstream with Windows Media

John Borland CNET News

Published: 11 Aug 2003 16:05 BST

A commission order giving other companies greater access to Microsoft's code could allow those companies to create digital rights management technology that works more smoothly with Windows Media -- but that ultimately could help support the spread of the Microsoft format as well.

Several other legal uncertainties are hanging over Microsoft's multimedia strategies. Last month, a federal court made a critical ruling in favour of InterTrust, a digital rights management company charging that virtually all Microsoft's major products violate its copy-protection patents.

Rosoff noted that Microsoft executives are holding tens of billions of dollars as cash reserves, not simply to pay potential fines or court judgment, but to cover business expenses that could arise from unfavourable judgments. That could include new costs to market or distribute the Windows Media Player or such things as unexpected licensing royalties if InterTrust wins its patent suit, the analyst said.

A Microsoft representative declined to speculate on possible outcomes of the commission's antitrust proceeding but said dialogue remained open between the company and regulators.

The commission said it would give Microsoft a last chance to comment before making a final decision on fines or remedies for the alleged market abuses.