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Commission solves Windows XPN mystery

Day one, round two...

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MS v EU: The afternoon began with a robust defence of the commission's position.

The commission barrister solved one mystery - who bought those copies of XPN - Windows without Media Player. The court was shown a high definition video trailer for Harry Potter played using Real Player running on Windows XPN - despite Microsoft's claim this morning that the programme did not work, the commission's barrister noted: "It seems to work like magic..."

The court heard that Microsoft's Media Player could not be considered a separate product. It started as NetShow which was sold separately and Microsoft recognises the competive relationship with other players and markets and promotes it on that basis.

To prove it was different the court was shown how the compartmentalised nature of Windows Embedded enables developers to select which media components to use. This is separated into infrastructure and application components. Further evidence was provided by Microsoft offering different licenses for Windows and Media Player and different upgrade cycles. Microsoft also offers Media Player for other platforms - like Media Player for Macs, which is an application not an operating system.

The commission questioned how relevant sales figures were for an unbundled product released now, rather than six years ago.

A parallel was drawn between Microsoft's actions in bundling Internet Explorer to fight off Netscape and similar behaviour with its media player. Before Microsoft bundled IE, Netscape had a 90 per cent market share. Now IE has a 90 per cent share.

The commission also quoted Microsoft emails which said Microsoft needed to "reposition" the battle from NetShow versus Real Networks to Windows versus Real Networks.

After a short break the court heard from supporters of the commission case - ECIS and the Software and Information Industry Association. First, they pointed at they would have more visible support from the likes of Sun, Novell and Real Networks if Microsoft had not spent €3bn in settling with them.

The court heard that after the launch of Real Networks in 1995, in June 1997, Bill Gates said streaming media players was an area of strategic importance which Microsoft must win.

The court was told that between the second quarter of 1998 and the second quarter of 1999 Windows Media Player users fell 15 per cent. There were 0.3 Windows MP users for every one Real user. Three months later that ratio had gone to 0.8 Windows MP users for every one Real user, to 2:1 by the time of the decision, to 3:1 now.

Speaking to reporters after the session Microsoft's general counsel, Brad Smith, said: "Three things have emerged clearly: every operating system has some media player function now, there is no demand, whether theoretical or actual, for an operating system without such a player and new players are continuing to enter the market like iTunes, Flash and Google."

We'll have more from the court tomorrow. ®

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