Vendor Charges Microsoft With ‘Predator Pricing’

A Swedish vendor of home media center software has complained to the European Union’s antitrust watchdog that Microsoft is using “predatory pricing” to shut it out of the digital home market, it confirmed on Tuesday.

Wellton Way AB, which makes a multimedia center product called the Wellton Way Multimedia Center (MMC), said it had written to E.U. Commissioner Neelie Kroes complaining about Microsoft’s pricing strategy for Windows XP Media Center Edition (MCE). In a letter sent on October 27, Wellton Way’s Chief Executive Officer Claes Wellton Persson said that Microsoft was using predatory pricing of MCE to “shut out competition” in the digital home market. “We believe our product is superior to MCE and Microsoft is trying to push us out of the market by illegal means,” Persson wrote in the letter.

The company’s argument hinges on the claim that the price differential between Microsoft Windows XP Professional and Microsoft XP Media Center Edition is so small that retailers have no incentive to offer XP Pro instead of MCE. MCE could therefore become the standard software product for home consumers, the letter argues, allowing Microsoft a “monopoly in a new market segment.”

A spokesman for Commissioner Kroes said that the Commission had not yet received Wellton Way’s complaint. He would not say whether the Commission had received complaints from other companies on this issue.

Microsoft declined to comment on the issue.

By Simon Taylor – IDG News Service (Brussels Bureau)