Microsoft quickly backed off on a proposal to portable music player manufacturers that if they included Windows Media Player in software packages, only that program could be included, the US Department of Justice (DoJ) reported Thursday in its update on the company’s antitrust settlement compliance.

After a complaint was received by the company, Microsoft reversed course in a second specification draft, saying distribution of Media Player was not exclusive if companies wanted to participate in its program. The DoJ said it was "unfortunate" that the former draft contained the exclusivity provision, but said it would drop further action against the company.

Microsoft reached a settlement with the DoJ in 2002 and a report is filed every six months detailing the company's progress in complying with the agreement.

Microsoft spokeswoman Stacy Drake, said a draft proposal was sent to manufacturers for feedback before it had been reviewed by the company's legal team. After receiving the complaint, the legal team nixed the exclusivity portion.

Drake said Microsoft realizes it has an extra layer of responsibility under its agreement, even though exclusivity agreements are an industry standard with other companies. Microsoft informed the DoJ that it had received the complaint.

"We wouldn't allow something like this to be implemented in the marketplace," Drake said.

Last year, the European Commission ordered that Microsoft sell a version of Windows XP without its Media Player software, saying the company had an unfair advantage over other companies that offer media players.

A dominant market player can't impose an exclusivity agreement and the European Commission – if the complaint had been forwarded to them – may have looked sympathetically at the complaint, said Anthony Woolich, head of the EU competition team at Lawrence Graham LLP.

"I think Microsoft did well to back down from a US and EU perspective," Woolich said.