EU slaps record fine on Microsoft ..complete article at: http://zdnet.com.com/2100-1104-5178281.html

By Michael Parsons and Jo Best CNET News.com March 24, 2004, 4:02 PM PT

BRUSSELS--The European Union on Wednesday issued its ruling in the long-running case against Microsoft, fining the American software giant $613 million, the heaviest punishment in any European competition case to date. European Competition Commissioner Mario Monti ruled that Microsoft had failed to provide to rivals information that they needed to compete fairly in the market for server software and that the company has been offering Windows on the condition that it come bundled with Windows Media Player, stifling competition.

Microsoft now has 120 days to provide the information that rival server makers need to compete fairly, and it must continue to update this information in the future, Monti said. It also has 90 days to provide a version of Windows without Media Player, although it can also continue to provide a version that includes the media software.

In the EU's judgment, Microsoft must refrain from using any commercial, technological or contractual terms that would have the effect of "rendering the unbundled version of Windows less attractive or performing. In particular, it must not give PC manufacturers a discount conditional on their buying Windows together with the Windows Media player."

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Microsoft reiterated its plan to appeal the decision. "We will go forward and seek legal review of this decision in the European Court of First Instance," Brad Smith, Microsoft general counsel, said in a conference call, referring to the European Union's second highest court.

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============================= Cropped Windows already exists ..complete article at: http://zdnet.com.com/2100-1104_2-5177455.html

By David Becker CNET News.com March 24, 2004, 10:00 AM PT

One Windows, indivisible, with browser and Media Player for all. But Microsoft may have damaged its own arguments to the European Union to accept its standard platform pledge in the wake of recent programs to offer stripped-down versions of its software in some Asian countries.

Faced with a program by the government of Thailand to provide citizens with low- cost PCs running open-source source software, Microsoft responded with a special $40 package with scaled-back versions of Windows XP and Office. A similar deal was recently extended to Malaysia.

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Microsoft executives have said the deals reflect new flexibility in product packaging overseas. "What we used Thailand as a pilot to look at is: 'Can we separate product sets to meet the needs of citizens in a developing environment?'" said Maggie Wilderotter, a senior vice president of business strategy for Microsoft. "How can we put good-better-best product sets into the market based on local needs?"

Microsoft executives have said the "entry level" version of Windows XP is intended for developing nations but haven't indicated in what other countries the program might be expanded. The Redmond, Wash.-based company has given no indication of similar deals on server software or other enterprise products.

Analysts, however, have said the deals set potentially damaging precedents for Microsoft, amid growing pressure from governments worldwide. Research firm Gartner, for one, predicts that the program will lead to the rapid erosion of Microsoft's one-size-fits-all pricing model. "Once they find a country that speaks English that wants this kind of deal, it's going to be a lot tougher for them" to stick to current pricing models, said Mike Silver, a Gartner analyst.

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========================= Microsoft cuts prices for Malaysia ..complete article at: http://zdnet.com.com/2100-1104-5168029.html?tag=nl

By Winston Chai CNETAsia March 2, 2004, 5:37 AM PT

Mirroring a similar deal in Thailand, Microsoft has announced a scaled-down software package as part of a Malaysian government drive to increase computer ownership. The Redmond, Wash.-based software giant has unveiled a customized, Malay- language version of its Windows XP Home Edition that will be bundled with all new computers under the Malaysian government's new PC Gemilang project.

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Pikom's budget PC features an 1.7 GHz Intel Celeron processor, 128MB of RAM, a 40GB hard drive, a 15-inch CRT monitor and peripherals such as a mouse, keyboard and speakers.

Prices for the desktop depend on the choice of operating system and accompanying software. The Windows version, coupled with Microsoft Work Suite 2004--a scaled-down set of productivity tools for tasks such as word processing and spreadsheets--will retail for $643 (1,147 Malaysia ringgits), while those running a Linux OS and Open Office will cost $586.

"In this program, we are able to bring the price to a point to fit the local market because it is a localized version," Butt said. "For the international English version, it's a set global pricing and it's very difficult to have one country with a different pricing from another."

He did not reveal the exact cost of the Malaysia-only software package. However, an English version of Windows XP Home Edition and Office XP retails for about $199 and $399, respectively. This means the base price of the modified Windows OS and Work Suite bundle would have to be significantly lower than its English-language counterparts to meet Pikom's $643 price tag for the PC.

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