Microsoft Statement on RealNetworks’ Legal Action

REDMOND, Wash., Dec. 18, 2003 — Following RealNetworks Inc.’s legal action today, Microsoft Corp. issued the following statement:

“RealNetworks’ legal action today is unfortunate and particularly surprising given the intense competition in the digital media marketplace.

The facts are clear. There is vibrant competition in this marketplace, and RealNetworks’ own reported growth shows that it has thrived on Microsoft® Windows® and many other operating system platforms. Computer manufacturers are free to install and promote any media player on new PCs. Consumers are free to use any media player, and many consumers use several different media players.

It’s hard to reconcile Real’s own statements on its marketplace success with today’s lawsuit. Real claims to be the No. 1 provider of digital media solutions, with massive distribution of its software and more than 1 million player downloads a week. Thus, this is a case where a leading firm is seeking to use the antitrust laws to protect and increase its marketplace share and to limit the competition it must face.

These issues are a rehash of the same issues that have already been the subject of extensive litigation and a tough but fair resolution of the government antitrust lawsuit. The government antitrust ruling imposes a range of significant restrictions on Microsoft’s business and provides considerable new opportunities for companies like RealNetworks; we accept these new rules and we are committed to full compliance.

Media playback technologies have been included in Windows as far back as the early 1990s. Microsoft has competed on the merits in the digital media marketplace by creating superior technology that delivers better quality, an open platform for software developers and device manufacturers and benefits to consumers. Companies are bringing new media players and services to the marketplace every week. That is what is going to benefit consumers and move this marketplace forward, and not this kind of rear-view-mirror litigation.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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