Microsoft Drops Appeal in EU

Microsoft Corp. dropped its appeal of a European antitrust ruling and said Monday that it has begun offering a version of its Windows operating system without software for playing audio and video.

Microsoft spokesman Jim Desler said the company began making Windows without the integrated media player available to computer makers last week at the same price that it charges for full-featured Windows.

He declined to say whether major manufacturers had placed any orders.

“It’s too early in the process to speculate on the level of interest,” Desler said.

Dell Inc., the world’s largest PC maker, later said it might become a major customer. The company has been promoting its own program for video and music, called Dell Media Experience, which ships on most consumer PCs.

The company might decide to remove the Windows Media Center, which offers some similar functions, in what could be a blow to Microsoft’s market share in the media player market.

“It absolutely makes sense” to do so, said Dell spokesman Venancio Figueroa. “We’re currently evaluating the decision.”

Microsoft offered the stripped-down version of Windows to comply with a December order by the European Union’s Court of First Instance, which rejected the company’s plea to temporarily delay two penalties imposed by the European Commission. Microsoft is still pursuing the main appeal of the penalties, which could take years.

Microsoft must also disclose some programming techniques to rivals. For a fee, the company has to share details about how its PC software communicates with its server software for controlling networks and about how those server computers talk to each other.

Those disclosures are designed to give Sun Microsystems Inc. and providers of the free operating system Linux a better chance at catching up to Microsoft’s 60% share of the European server market.

Microsoft said it would distribute no-player Windows to retailers that ask, but few stores or consumers are expected to take the company up on such offers.

Instead, European regulators hope that PC makers will replace the Windows Media Player with rival gear from RealNetworks Inc. or Apple Computer Inc. Those companies might make their programs available free or even pay to be included.

Spokesmen for those firms declined to comment about their attempts to get inside more European computers.

Hewlett-Packard Co., another of the largest PC manufacturers, also declined to comment.

Microsoft shares rose 2 cents to $25.67 on Nasdaq.