Microsoft Cleans Up Windows in Europe

Microsoft MSFT blinked Tuesday in Europe.

The Redmond, Wash., software giant and the European Commission have been toe-to-toe over a version of the Windows operating system sold only in Europe.

On Tuesday, though, the company agreed to make a number of changes to Windows XP N, which is sold without the Media Player, to make it more attractive to consumers.

The Media Player was removed by order of the commission, which claimed that bundling it with Windows unfairly restricts competition. Microsoft is appealing the order.

Meanwhile, though, regulators thought that Microsoft had gone too far in modifying the software -- perhaps in an attempt to show it couldn't really separate the two -- and had been pushing Microsoft to mend it.

Microsoft said it will eliminate references in retail packaging that certain products won't work properly with this version of Windows, create a software package that will enable the reinstallation of all the media files that the commission ordered Microsoft to remove and change various settings that will improve the software's performance.

In recent trading, shares of Microsoft were off 12 cents to $24.08.