November 17, 2003, 9:38 AM — A small but important fact was established last week during a hearing in Microsoft Corp.'s long-running antitrust case in the European Union that could form the basis of a settlement, according to some people following the case.
RealNetworks Inc., maker of the music and video playing program Real One Player, showed how Windows XP Embedded, a simplified version of the operating system which is licensed only for industrial use, can function as an operating system without Microsoft Media Player attached, according to three people present at the closed-door hearing who asked not to be named.
Microsoft has argued that removing Media Player would harm the way Windows works. It also says that Windows XP Embedded is not a full operating system.
"It is designed for single-purpose use, such as running ATMs (automated teller machines)," said Tiffany Steckler, a spokeswoman for Microsoft.
The European Commission told the Redmond, Washington software company in an official statement of objections in August that in order to restore fair competition among music and video players such as Media player, Real One and Apple Computer's QuickTime, Microsoft must either extract Media Player from the operating system and sell it as a standalone product, or it must insert a rival player into Windows to sit alongside its own player.
The Commission referred to XP Embedded in the August statement, according to one person who has read the confidential document. "The Commission cited it when it refuted Microsoft's claim that Windows depends on Media Player," he said.
On Friday, using a laptop computer hooked up to three giant monitors, RealNetworks demonstrated in front of over 100 European competition regulators, opponents and Microsoft itself how easily Windows XP Embedded runs without the media player. It also showed how Real One Player, its own media player, worked on the specialist version of XP.
"It was a 'gotcha' moment," said one person present, adding: "Everyone was impressed, there was a lot of nodding heads and hands to chins."
He compared it to a similar moment during the antitrust case in the U.S., when a witness demonstrated how Windows can work without having the Microsoft browser, Internet Explorer, attached. "In the U.S. case, Microsoft insisted that Windows would be harmed by having its browser removed too," the person said.
Microsoft's lawyers made reference to RealNetworks' demonstration during their summing up at the end of the three-day hearing, another person present said. "Someone on the Microsoft team dismissed the demonstration as false, but they still acknowledged it as one of the more important points made during the hearing," he said.