Metro Group, Germany's largest retailer, had something against it (http://en.wikipedia.org/wiki/Metro_AG). Yet, it's an abbreviation of "metropolitan" and is used for many other things: http://en.wikipedia.org/wiki/Metro
Media Markt, is Europe's largest retailer of consumer electronics[2].
Saturn is one of the big retailers of consumer electronics in Germany, and have stores in some other European countries[3].
So perhaps Microsoft could have won that one, but at what cost? Pissing off one of their biggest retailers? I don't know for sure, but it seems very likely that Microsoft wouldn't want to do that and made the decision to back off instead.
[1] http://en.wikipedia.org/wiki/Metro_AG