Microsoft is reported to have said it would be forced to offer European consumers a sub-standard version of Windows if the Commission forces an operating system re-write.

The argument was presented during three-days of closed hearings between the European Commission (EC) and Microsoft.

Regulators are weighing whether Microsoft should remove its Media Player from Windows as a penalty of allegedly abusing its dominant position in European IT markets.

Following a three-year investigation of Windows, the commission provisionally ruled in August Microsoft had skewed development for multimedia players.

The EC also found a failure to disclose Windows APIs had prevented competitive server operating systems from being developed. The EC’s ruling in the case is expected in June 2004.

While the European case is focused on media players and Windows APIs, Microsoft’s other major antitrust case in the US centered on Internet Explorer’s integration with Windows.

Despite that difference, Microsoft appears to have fallen back on the same defense that integration of the company’s own applications with Windows supports Microsoft’s right to innovate, and deliver better products to consumers as a result.

During hearings, the Commission agued Media Player’s inclusion with Windows after 1999 enabled its growth to outpace rival RealPlayer from RealNetworks Inc.

The EC also produced survey evidence it said argued once Media Player is on every desktop companies would no longer need to spend extra money developing for other media players.

Microsoft disputed the survey’s strength, calling it anecdotal rather than statistical, adding companies had money to build for more than one format.

Both sides also clashed on the definition of a media player. The EC said Media Player is a product, while Microsoft considers Media Player a function of the operating system – a similar debate was argued between the US Department of Justice (DoJ) and Microsoft over IE.

Concluding its presentation, Microsoft indicated its keenness to explore a solution with Brussels, but during presentations ruled out removal of Media Player from Windows.

Presentations to the EC are now expected from Novell Inc [NOVL] and the Computer and Communications Industry Association (CCIA).

This article was based on material originally published by ComputerWire.