European ruling won't hurt Microsoft

Any victory claimed by the European Commission over Microsoft in its antitrust action will be a hollow one because the proposed fine and remedies will not harm the company's business, Gartner has warned.

Microsoft faces a fine of up to $3.5bn and could be required to ship two versions of Windows - one with Media Player and one without it, according to the analyst.

In a research note Gartner said a settlement between the European Commission and Microsoft before the 24 March deadline was still possible, but the Commission would probably be reluctant to make a deal.

Gartner's report stated: "In our view, the European Commission's primary motivation for continuing this action is the need to maintain credibility and 'declare victory'.

"As with the US Department of Justice settlement, such a victory will likely be a hollow one."

It added that even if the ruling did stand and the proposed fine and remedies were imposed, there would be little effect on Microsoft's business.

The software giant will already have budgeted for the fine, and having to ship two versions of Windows would have little market impact - as long as both versions have the same price.

"Few purchasers will choose to buy a less functional product when they can get greater functionality for the same price," the analyst said.

"Dual versions of Windows would also have little impact on original equipment manufacturers [OEMs], which can already pre-install alternative media players and set them as the default option."

Media Player "remains a linchpin" in Microsoft's digital media strategy, said Gartner, so the company will not agree to anything that forbids it from integrating the application with Windows.

But it might agree to the proposed fine and remedy as this would have little impact on its strategy.

Gartner said consumer and enterprise Windows customers and OEMs need not need take any action as a result of the anticipated antitrust ruling.

See also:

Microsoft antitrust talks collapse

European Commission ruling expected next week following last-minute deadlock  18 Mar 2004

EU to decide Microsoft antitrust case

Moment of truth as European Commission nears decision  27 Jan 2004

Like this story? Spread the news by clicking below:

 del.icio.us     Digg this     reddit!