European Commission Extends Antitrust Investigation into Microsoft-Backed DRM Technology

The European Commission is expected to announce its decision to extend an antitrust investigation into a move by Microsoft and Time Warner to acquire joint control of technology that could help the music and movie industries fight piracy. The investigation revolves around digital rights management (DRM) technology, which is designed to give content publishers a tight grip on how digital music, video, and software can be used. Microsoft, Sony, Apple, RealNetworks, and IBM are all vying to become dominant suppliers of DRM technology.

Key Takeaways:

• The European Commission has decided to extend its antitrust investigation into Microsoft and Time Warner's plans to acquire joint control of ContentGuard, a U.S. company that holds key DRM patents.
• The commission is concerned that Microsoft could become the dominant supplier of DRM technology, giving it an unfair advantage in the market.
• The investigation is expected to take four months and follows a 30-day preliminary study of the companies' request.
• Microsoft has been marketing its Windows Media-based DRM system since the late 1990s as the best way to piracy-proof digital content files.
• Apple has faced criticism for allegedly refusing to license its FairPlay DRM technology to competing music services, with records company Virgin Mega complaining to the French Competition Council.
• Industry analysts believe that the commission will need time to sort through the complex business and technology questions surrounding DRM.

Statistics:

• The investigation is expected to take four months.
• Microsoft has been fined $613 million by the European Commission for antitrust violations.
• The commission has ordered Microsoft to supply two versions of its dominant Windows operating system, including one without Windows Media Player.
• The European Commission has issued a record $613 million fine to Microsoft for antitrust violations.
• 30-day preliminary study was conducted by the European Commission.
• 1990s: Microsoft began marketing its Windows Media-based DRM system.

Sources:

• Reuters (no date) reporting on a source close to the matter.
• RedMonk (no date) citing James Governor, tech industry analyst.
• Directions on Microsoft (no date) citing Matt Rosoff, tech industry analyst.
• Electronic Frontier Foundation (no date) quoting Fred von Lohmann, attorney.
• European Commission (no date) announcing a five-year probe into Microsoft's business practices.