Government Meddling in Business

Here's why it's usually a dumb idea.

PC makers and distributors are holding back from buying the new alternative version of Windows XP that Europe's competition commissioner ordered Microsoft Corp. to offer as part of the punishment in the software maker's long antitrust battle with the European Union.

Windows XP N was released to distributors last week in English, French, German, Italian and Spanish and will be available to the public in the next few weeks. Versions in 10 additional languages will be released in July.

The world's largest software maker had to change its Windows operating system after EU antitrust regulators ruled last year that it abusively wielded its Windows monopoly and locked out competitors. Microsoft was fined a record euro497 million ($608 million).

But computer distributors and manufacturers are so far showing little interest in the new product, which compels consumers to choose their media player and download it from the Internet.

Yeah, no kidding. Imagine being compelled to not include free software on a disc. Who's the real winner here?

Pretty much only lawyers and bureaucrats.

"We'll first see how it sells. I heard that this version would be cheaper," said Jose Cabeza, technical director for Publinet. "If it isn't, logically the market will decide about it. I don't see why a client on the street would choose a lesser product."

Obviously, some EU do-gooding busy body saw why a customer would want a lesser product.

I don't understand why it would be cheaper though. Windows Media Player is FREE! If you don't include FREE stuff, why mark it down? $99 - $0 is still $99.

Microsoft is going to have the last laugh. Though they already tried.

Microsoft initially wanted to call the new version of its consumer operating system "Windows XP Reduced Media Edition" but EU regulators said that name would discourage sales.

It's pretty obvious that this "punishment" was a waste of everyone's time. Didn't anyone see this coming?

Economics and Markets Posted by AlexC at June 25, 2005 12:00 AM