EC mulls MS DRM monopoly trawl

ContentGuard decision due next week

The EC has postponed by another week whether or not to examine the monopoly implications of Microsoft and TimeWarner's control of DRM company ContentGuard. With Microsoft already judged to be a monopoly in Europe, and Time Warner's enormous media holdings, the two joint owners of the company have enormous market clout. The two giants snuggled up last spring, when Time Warner agreed to license Microsoft's DRM technology and continue to use its IE browser technology in its AOL software. (See Browser wars suit ends with death knell for Netscape)

Microsoft is a long-time investor in ContentGuard, which has had some success in persuading standards bodies, including the MPEG group, to adopt its specifications. Redmond has adopted ContentGuard's markup language in its own products. In April, after Microsoft was obliged to pay $440m in DRM royalties to InterTrust, it increased its stake in ContentGuard and Time Warner stepped in, giving the two equal holdings. Now owned by Sony and Philips, InterTrust is a shell operation, the licensing house having long ceased to do any R&D work of its own.

It's too early to say the EU's interest in this new consumer choke point will be followed up with an examination of other players in the market, including InterTrust. Given that the European Commission's interest was piqued by Real's plea for a competitive media player market, one would think that it would. But don't hold your breath. ®

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