The software, Windows XP N and Windows Vista N, lacks the Windows Media Player media playback software, which ordinarily is integrated into Microsoft's operating systems.
EU regulators ordered Microsoft to unbundle Media Player from some versions of Windows available for sale in Europe after charging that the bundling gave the company an unfair advantage over media player products created by third-party developers.
Microsoft, however, was allowed to offer standard editions of Windows for sale in Europe alongside the N editions, allowing consumers to choose between the two.
Speaking in March to officials at the U.S. Federal Trade Commission, Heiner said European consumers have opted en masse for the full versions of Windows. The N versions, he said, "sit on the shelf."
"PC manufacturers and consumers [in Europe] can now choose to get Windows with or without its media playback functionality. They have chosen the full-featured version of Windows, as might be expected," said Heiner, according to a transcript of his remarks obtained by InformationWeek.
Heiner was speaking to FTC officials to urge them to adopt anti-monopoly measures that promote competition rather than restrict consumer choice.
He said Microsoft's consent decree with monopoly watchdogs at the Department of Justice is a good example of the former. As a result of the deal, he said, "new Windows PCs come loaded up with software from Microsoft's competitors" without limiting consumer access to Microsoft's own products."
By contrast, the EU's decision to order Microsoft to strip out its own media player technology from some versions of Windows has hurt both Microsoft and its European customers, Heiner said. "Costs have been imposed, but there is little apparent benefit for anyone," he said.
Microsoft continues to butt heads with European regulators over the prices it charges to competitors for interoperability protocols for file and print servers.
Microsoft last month dodged -- at least temporarily -- European Union fines of up to $4 million per day by submitting an 11th-hour response to allegations that it continues to overcharge rivals for the tools they need to make their products compatible with the Windows operating system.
The company told the EU that it needs "greater clarity on what prices the commission wants us to charge" and called for more talks on the issue, according to a statement released last month by the software maker.
In his comments to the FTC, Heiner blasted the EU for inserting itself into talks between Microsoft and third-party product manufacturers. "Whether firms choose to take a license, and what kind of products they build with those licenses," Heiner said, "is of course entirely up to them and outside the control of either Microsoft or any antitrust agency."