Microsoft: No One Wants EU Windows

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The European Commission forced the world's largest software maker to offer a product no one wanted and no one bought, Microsoft Corp. told a European Union court on Monday as it began trying to overturn a landmark antitrust ruling.

Microsoft lawyer Jean-Francois Bellis said in his opening statement that the Commission made "fundamental errors of fact and reasoning" in its decision two years ago that the company abused its dominant market position to muscle into media software.

The Commission's order that Microsoft offer customers a version of its Windows desktop operating system without Media Player — intended to give people a free choice of media software — has been a spectacular failure, he said.

In its core market, no computer maker had shipped a PC or laptop with the media-free Windows XP N version. "Not a single one," Bellis told the 13 judges. Some 90 percent of Windows sales come from being pre-installed on computers when they are sold.

XP N sales represent 0.005 percent of overall XP sales in Europe, Microsoft told the court, and many of the ones produced may remain unsold, it said.

French retailer FNAC, the single largest retailer to order XP N accounting for 46 percent of the orders, has said that it sees no consumer demand for the product, Microsoft said.

"The failure to offer a product that nobody wants cannot be an abuse," Bellis said.

Bellis also said the Commission was wrong to predict that its media player would quash rival software.

Economist David Evans told the Court of First Instance that the success of Apple Corp.'s iTunes and the Macromedia Inc.'s Flash Player did not bear out EU forecasts.

More than 87 percent of computer users now play media on non-Windows software, Evans said, and PC manufacturers have doubled the number of media players pre-installed on personal computers in Europe over the last two years.

"If the Commission was correct, we should see a steep downward trend," he said.

The European Committee for Interoperable Systems — a group representing some of Microsoft's rivals — said this was false reasoning, because iTunes and others are not fully functioning media software that compete directly with Media Player.

"It (Windows Media Player) has become the dominant video streaming applications product today only because it was tied to the Windows monopoly," ECIS said in a statement.

"Consumer are obliged to accept Windows Media Player on the PCs they purchase and content providers have little choice but to write their content to work with the ubiquitous technology."

The EU fined the Redmond, Wash.-based company a record $613 million in 2004 after deciding that Microsoft had taken advantage of its position as the leading supplier of software for PC operating systems to elbow in on rivals for work group server operating systems and for media players.

The commission ordered Microsoft to share information and communications code with rivals and to market the version of Windows without its media player.