Microsoft Concedes to EU Demands, Changes Vista Operating System

Microsoft, the world's largest software maker, announced on Friday that it would modify its new Windows Vista operating system to address complaints from European regulators and eliminate potential regulatory hurdles. The move comes after two years of negotiations with competition officials in Brussels, where the European Commission had threatened to take legal action if Vista was found to violate European competition laws.

Microsoft agreed to fundamentally change the design of Vista to let users easily choose their own security software providers and search engines. The company also decided to make its document format XPF an open-source product, free to all users without license fees. This change addresses concerns that a proprietary XPF format would give Microsoft an unfair advantage over Adobe and its popular PDF format.

Key Takeaways:

• Microsoft will modify its Windows Vista operating system to address European Commission concerns about competition laws.
• The changes will allow users to easily choose their own security software providers and search engines.
• Microsoft will make its document format XPF an open-source product, free to all users without license fees.
• The European Commission has agreed to investigate all complaints following the software's shipment to business customers in November.
• Microsoft estimates that Vista will generate sales of about $8.8 billion a year for the company.
• Rival software makers, including Google, Adobe, Symantec, and McAfee, complained that the new operating system would deter users from choosing products that compete with Vista's built-in features.
• Microsoft agreed to supply security software vendors with application programming interfaces that would let their products operate on Vista without interference.
• The company will let competing security programs sweep Vista's core or "kernel," backing away from a previous plan to block access to the kernel.
• Microsoft will give away its own document format, XPF, for free, through an open-source license.
• The changes demonstrate Microsoft's new willingness to adapt to market realities and address competition concerns, according to Roger Fulton, an analyst with Gartner.

Statistics:

• Microsoft estimates that Vista will generate sales of about $8.8 billion a year for the company.
• The European Commission fined Microsoft n497.2 million (or $621 billion) in 2004 for antitrust violations.
• Additional fines of up to n3 million a day dating to July 31 would amount to n225 million through Friday for failing to make available at reasonable terms its so-called server operating protocols.
• 95% of all personal computers run Windows.

Sources:

• Microsoft announcement: European Commission
• Analyst quote: Roger Fulton, Gartner
• Microsoft: "Microsoft Changes Windows Vista Design to Address EU Antitrust Concerns"
• European Commission: "Microsoft accepts European Commission demands"
• Microsoft financial estimates: Gartner report on Vista sales