Enter Windows XP Edition N

By Quentin Webb

BRUSSELS: Microsoft and the European Commission have agreed the software giant can sell a stripped-down version of its Windows operating system under the name "Windows XP Home Edition N", Microsoft said on Monday.

The deal represents a small step in Microsoft's long battle with the European Union's executive, which last year ruled the software giant had abused the near-monopoly of Windows to crush competition, fined it nearly 500 million euros ($650 million), and ordered it to change its business practices.

The Commission ordered Microsoft to sell a version of Windows without its Windows Media Player audiovisual software and the two clashed over a suitable name.

The Commission's order is meant to open the market for alternative software to play films and music, from RealNetworks, Apple and others.

Horacio Gutierrez, Microsoft's top lawyer in Europe, said the names "Windows XP Home Edition N" and "Windows XP Professional Edition N" were suggested by the Commission after it rejected 10 suggestions by Microsoft.

"We have some misgivings about the chosen name, as we fear it may cause confusion for consumers about the product, but we will adopt the Commission's name in order to move forward and accelerate the pace of the implementation process," Gutierrez told Reuters by telephone.

The edition was already sold to computer makers and would be on sale to the public in "a matter of weeks", Gutierrez said.

Microsoft wanted consumers to be sure about what they were buying, but the Commission said it should not put off consumers, like Microsoft's first choice, "Windows XP Reduced Media Edition".

Commission spokeswoman Antonia Mochan said it was still analyzing market feedback on Microsoft's behavior.

"There's more to this issue than the name," she said.

Microsoft is appealing the Commission's landmark decision, and other disputes over its implementation are still simmering.

The Commission doubts another demand -- that Microsoft share information with rival makers of servers used to run printers and retrieve files -- is being followed, and the two have also disagreed over the appointment of a trustee to monitor Microsoft's compliance with the Commission's demands.

Microsoft could ultimately face fines of up to $5 million a day if the Commission finds it is refusing to comply with its decision.