Europe vs. Microsoft: in antitrust we trust

A report from the Financial Times claims that Google and Opera "informally provided the tip-off" that led to the EU fining Microsoft over $730 million yesterday. The fine was levied because Microsoft failed to include a "browser ballot" screen that let European users choose what browser to use when setting up their Windows PC. The Financial Times cites "several people familiar with the case" as confirming that Microsoft's browser-making rivals were behind the tip, and claims that both companies also helped the EU throughout the investigation.

Although uncorroborated, this revelation makes sense: both Google and Opera benefited heavily from the inclusion of the browser ballot, and Opera has been a vocal opponent against Microsoft's tight integration of Internet Explorer with Windows for a long time. When asked for comment, Opera told the Financial Times it was "happy to see that the Commission is enforcing compliance with the commitment, which is critical to ensuring a genuine choice among web browsers for consumers." Google was also asked for comment, but declined.

Nearly 20 years later, the decision to bundle a web browser with Windows is still giving Microsoft grief. Today, the European Union has decided to fine the company €561 million (around $732 million) for breaking a 2009 antitrust agreement. At the time, Microsoft agreed to include a browser ballot box in every new copy of Windows, allowing users to pick any one of the 12 most popular browsers rather than defaulting to Microsoft Internet Explorer. However, in what Microsoft called a "technical error", Windows 7 Service Pack 1 removed this choice. In July, the European Commission formally started investigating, and last October it decided that Microsoft had indeed broken the rules.

Last month, Reuters reported that the EU would likely fine Microsoft by the end of March. Indeed, Microsoft is now paying for the trouble. The commission noted that this is the first time a company has ever been fined for "non-compliance with a commitments decision."

European regulators are likely to hit Microsoft with a fine by the end of March, according to a Reuters report published today. Citing two individuals familiar with the case, Reuters says the financial punishment will come a result of antitrust violations. The specific charges are unclear, but in October of last year the European Commission accused Microsoft of failing to provide users with a choice of browsers following the release of Windows 7 Service Pack 1. At the time, Microsoft insisted that the oversight was due to a technical error, though the company took on full responsibility for the problem. European Commissioner Joaquin Almunia would later say "there are no grounds to pursue an investigation" into a similar issue with Windows RT, but if the Reuters report is accurate, it seems regulators have found Microsoft to be in the wrong side of antitrust provisions established over a decade ago.

Microsoft admitted to a "technical error" earlier this year after the European Commission announced its plans to investigate how millions of PCs running Windows 7 Service Pack 1 did not display a browser choice screen. The software maker has corrected the error, but if found guilty of breaching its legally binding commitments, Microsoft may be fined up to 10 percent of its total annual turnover.

Microsoft has four weeks to respond to the charges. It issued the following statement in response to the European Commission's investigation:

European Union (EU) regulators are set to charge Microsoft for breaching the terms of a landmark 2009 antitrust settlement by failing to provide a clear choice of web browsers in Windows 7 Service Pack 1, according to a report from Reuters. The issue first emerged back in July, when the European Commission (EC) — the EU's executive body — formally announced its intentions to open proceedings against the company. Microsoft admitted the "technical error" the same day, emphasizing that it had taken "immediate steps" to correct the problem.

"The next step is to open a formal proceeding into the company's breach of an agreement," EU Competition Commissioner Joaquin Almunia reportedly told journalists today. "It should not be a long investigation because the company itself explicitly recognized its breach of the agreement." Microsoft remains under investigation over similar allegations related to its Windows RT system, first brought by rival Mozilla. In a clear sign that it is seeking to avoid further complications, the company recently rolled out an update for Windows 8 which implements a very prominent browser choice option.

A spokesman for the European Commission's antitrust agency has confirmed that the Commission is investigating browser choice issues on Windows RT and detailed more possible charges. Antoine Colombani told Computerworld that "we will indeed look at these allegations made by third parties in the context of the investigation opened yesterday on Microsoft's compliance with our December 2009 decision." These allegations were primarily made by Mozilla, which has complained that Microsoft's tablet-focused Windows RT operating system only allows third-party browsers in the Metro environment, not the more traditional Classic mode. It's also alleged that users may find it difficult to change the default browser.

As Colombani said, the investigation will proceed in conjunction with a separate probe over whether Microsoft followed rules put in place back in 2009, after it was found to be abusing its market dominance with Internet Explorer. Besides examining whether Microsoft is locking browsers out of Windows RT technically, Colombani confirmed the Commission would also look at two other allegations. The first claims that Windows RT does not show the browser choice screen Microsoft agreed to display as part of the 2009 agreement.

Yesterday the European Commission revealed that it was going to be investigating whether Microsoft had properly complied with a 2009 commitment to allow users to choose their default web browsers in Windows — and now eyes are turning towards Windows RT as well. Reuters is reporting that the EU will be looking into the tablet-focused version of Microsoft's upcoming operating system, and the decision to make Internet Explorer 10 the only available browser in the Metro environment. Mozilla raised a complaint about the restriction this past May, with a Microsoft attorney reportedly stating that the decision was due to battery life and security concerns unique to devices like tablets.

The news follows Microsoft's admission yesterday that a technical error had prevented some computers with Windows 7 Service Pack 1 from seeing the browser choice screen as intended; the company has volunteered to add an additional 15 months to the compliance period dictated in 2009 to compensate for the oversight. As for Windows RT, it's unclear how investigators will view the browser decision in light of a marketplace that has shifted radically in recent years, with Apple's iPad currently dominating tablet sales, and recent statistics indicating that Internet Explorer may have been usurped by both Firefox and Chrome in European browser marketshare.

Microsoft admitted today that a "technical error" had prevented 28 million PCs running Windows 7 Service Pack 1 from seeing a browser choice screen. The screen, added to Windows after the company was found to have abused its dominance in the market with Internet Explorer, is designed to offer Windows users a choice of alternative web browsers. The European Commission said earlier today that Microsoft had failed to comply with its 2009 browser choice commitment and a company spokesperson has revealed that it has "taken immediate steps to remedy" the problem.

Microsoft says it is now distributing the software with the correct browser choice option and has offered to extend its compliance period for an additional 15 months in an attempt to appease the European Commission. "We deeply regret that this error occurred and we apologise for it," says a Microsoft spokesperson. Microsoft says it has a third-party conducting a "formal investigation" into how the technical error occurred. "We have asked them to prepare a full report when their work is complete," says a spokesperson. "They will provide this report to the European Commission."

The European Commission revealed today that it plans to open proceedings against Microsoft to investigate whether the software giant has failed to comply with a 2009 browser choice commitment. Microsoft was forced to implement a browser ballot box in its Windows operating system to ensure users were presented with a choice of web browsers. The ruling followed the result of a European Union competition case that found Microsoft had abused its dominance in the market with Internet Explorer.

The Commission believes Microsoft may have failed to implement the browser choice screen correctly with Windows 7 Service Pack 1, released in February 2011. "We take compliance with our decisions very seriously," says Joaquín Almunia, a member of the European Commission. "I trusted the company's reports were accurate. But it seems that was not the case, so we have immediately taken action. If following our investigation, the infringement is confirmed, Microsoft should expect sanctions."

The General Court of the European Union, the second-highest court in Europe, has rejected Microsoft's appeal against an antitrust ruling over the company's licensing practices. Four years ago, Microsoft was fined €899 million ($1.44 billion) for failing to comply with an antitrust decision in 2004. The European Commission ordered Microsoft to pay the fine alongside changes to its versions of Windows involving a removal of the Windows Media Player.

In a ruling today, the General Court of the European Union cut Microsoft's fine by €39 million to €860 million ($1.1 billion). Microsoft issued a statement to Reuters saying it is "disappointed with the court's ruling," despite the slightly reduced fine.