Microsoft Corp. reported in a quarterly antitrust update to the U.S. government that it recently scrapped an exclusive licensing proposal for its Windows Media Player that asked device makers to snub competing multimedia applications.

In its quarterly report, filed with the Department of Justice on Thursday, Microsoft said it quickly withdrew the draft licensing agreements after receiving at least one complaint regarding the exclusive deals that the company had forwarded to an unspecified number of portable hardware makers. Microsoft reported that it replaced the exclusive contracts with another version of the agreement that allows device makers to consider use of other multimedia applications, such as Apple Inc.'s iTunes, RealNetworks' RealPlayer, Napster To Go and other platforms.

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The Redmond, Wash., company submitted that it moved quickly to nix the contract provision, which would have affected companies seeking to distribute a CD containing Windows Media Player and other software along with their audio devices. Ten days after replacing the controversial draft proposal, Microsoft reported that it finalized a draft of the contract for its partners that explicitly states that participants in the CD program are free to include any other software they wish.

The Department of Justice labeled the incident as "unfortunate" and said that it didn't plan to pursue any further action regarding the complaint.

Since reaching a settlement with the government in 2002, Microsoft has given quarterly updates on its progress in addressing alleged antitrust issues around its Windows operating system and Media Player.

Read the full story on eWEEK.com: Microsoft Ditches Media Player Licensing Strategy