Microsoft Amends Music Player License

Microsoft has quickly backed off a proposal to portable music player manufacturers that if they want to bundle Windows Media Player, it must be an exclusive deal, the Department of Justice has reported.

After Microsoft got a complaint about its intended policy, the company revised its draft of the specification ten days later reversing its course. Microsoft says in the document that distribution of its Media Player need not be exclusive if companies want to participate in its program. The DOJ said it was "unfortunate" that the earlier draft contained the exclusivity provision, but said it will drop further action against Microsoft in the matter.

Backtracking on Plan

The complaining company is not identified in the report. Microsoft reached a settlement with the DOJ over its antitrust suit in 2002, and the agency files a report every six months detailing Microsoft's progress in complying with the agreement. This incident came to light in Thursday's routine report.

A draft marketing proposal was sent to manufacturers for feedback before it had been reviewed by the company's legal team, said Stacy Drake, a Microsoft spokesperson. After receiving the complaint, the legal team nixed the exclusivity portion, she said.

Drake said Microsoft realizes it has an extra layer of responsibility under its agreement with the DOJ, even though exclusivity agreements are an industry standard with other companies. Microsoft informed the DOJ that it had received the complaint, she said.

"We wouldn't allow something like this to be implemented in the marketplace," Drake said.

Following EU's Legal Order

Last year, the European Commission, the European Union's executive body, ordered Microsoft to sell a version of Windows XP without its Media Player software. The organization said bundling the player with the dominant operating system gave the company an unfair advantage over other companies that offer media players.

A dominant market player can't impose an exclusivity agreement, and the European Commission--if the complaint had been forwarded to them--may have looked "sympathetically" at the complaint, said Anthony Woolich, head of the European Union competition team at Lawrence Graham in London.

"I think Microsoft did well to back down from a U.S. and E.U. perspective," Woolich said.