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Microsoft Corp. said it will come up with a new name for the unbundled version of Windows XP in time for the software’s retail delivery by the end of February, following criticism from the European Commission.

The name “Windows XP Reduced Media Edition,” which the EC said would prejudice consumers against the software, was only provisional, pending the Commission’s approval, Microsoft said on Monday. “Microsoft is absolutely committed to complying fully with the Commission’s decision,” said a Microsoft spokesman. “Microsoft is currently discussing alternative names.”

Under last year’s Commission decision, upheld in December by the Court of First Instance, Microsoft is required to provide European users with an alternative version of Windows that doesn’t include Windows Media Player. Microsoft has already provided PC manufacturers with the software, but the name is only significant for the retail version of the software, which will appear on store shelves along with the standard edition. Microsoft has said it will deliver the unbundled Windows to retailers by the end of February.

Does the Media Player ruling mean much to Microsoft? Click here to read David Coursey’s views.

European Commission competition spokesman Jonathan Todd confirmed that the Commission has requested Microsoft to change the name. To enforce its legal remedies, the Commission has the power to levy fines of up to 5 percent of Microsoft’s daily gross income, though Todd said this was a “theoretical” possibility.

Besides the unbundled Windows, Microsoft is also required to license Windows server protocols to competitors. Both remedies are intended to address competitive imbalances created by Microsoft’s effective monopoly on desktop operating systems, the Commission said. But even given the relatively quick institution of the penalties, some competitors say they are unlikely to make much difference.

“Microsoft has already essentially eliminated competition from other media players,” said lawyer Thomas Vinje, who represented the Computer and Communications Industry Association against Microsoft in December’s CFI hearings. “Apart from Microsoft’s efforts to neuter the remedies … there is doubt about [’their] effectiveness, because they come much too late.”

Vinje and other observers said OEMs are unlikely to want to sell PCs using the unbundled operating system. Despite reported comments by Dell Inc. that it is considering using the unbundled version, a source close to the company said it has no serious interest in unbundling Windows Media Player.

On the server protocols side, Microsoft’s licensing terms effectively block participation from open-source projects such as Linux and Samba, according to the Free Software Foundation.

Did Microsoft block free software from its licensing scheme? Click here to read the Free Software Foundation’s claims.

Vinje said such moves are only to be expected. “Microsoft will do, and indeed is already doing, everything it can to render the decision ineffective,” he said.

However, the Commission’s decision has already created a legal precedent for further antitrust actions, even though it is under appeal, Vinje said. It could create a legal environment that could foster competition, he said. “Other ICT companies can expect to see further enforcement of EU law against Microsoft that restores competition to key markets like the desktop operating system market, and that preserves competition in other markets,” he said.

A key example is the market for mobile device software, where Microsoft is still far from dominant, Vinje said.

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