Microsoft wants to give rivals' software away

The crux of the dispute -- Microsoft's dominance in the media-player market and its attempts to scupper rivals including RealNetworks -- has apparently led the software giant to offer an olive branch to competitors.

One way that Microsoft is hoping to defuse the argument, according to the FT, is offering to include a CD with rivals' media-player products on it when consumers buy a new Windows PC. However, it's unlikely that such a move will sit well with the EC.

James Governor, principal analyst at RedMonk, said that the move would be unlikely to win over the EC. "This case is all about location, location, location -- but when it comes to location, inclusion on a CD-Rom just about gets a competitor in to the backyard, out in the weeds. I can't see Mario Monti doing cartwheels about this. Consumers tend to use preinstalled software -- it's sitting right there with an icon on your desktop, or fired up through the browser."

Sources quoted in the FT concurred, saying that the EC had rejected the idea on the grounds that the difficulties involved with installing software for the average user would be prohibitive.

However, Governor believes current manoeuvres hint at a change in Redmond's behaviour. "It's aware that concessions have to be made and this looks like an attempt to pre-empt stronger sanctions," he said.

Among the possible punishments that could be meted out to Gates and friends is that they could be forced to unbundle the media player from Windows, pre-install other media players or share source code with rivals. Recent speculation in the German news that the Redmond behemoth could expect an antitrust fine from the EC of around €100m (£52.9m) was rubbished by the Commission.

A draft resolution is currently under consideration, with the final report into the case is expected to be delivered in May.