We all have expressed our dislike of Internet Explorer at one point or another—but the European Commission has really thrown the hammer down, handing Microsoft a $731 million fine for failing to promote a range of web browsers, rather than just Internet Explorer, to users in the European Union (EU).
It introduced a Browser Choice Screen pop-up in March 2010 as part of a settlement following an earlier EU competition investigation, but dropped that feature in a Windows 7 update in February 2011. Microsoft said the omission had been the result of a “technical error.” Under European law, Microsoft would have been fined 10% of their global annual revenue, or $7.4 billion (2012).
“We take full responsibility for the technical error that caused this problem and have apologized for it,” a spokesman for Microsoft said following the announcement. “We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake—or anything similar—in the future.”
“The European Commission is sending a firm signal in this first case of its type that it will not tolerate failure by a company to comply with the commitments it gave to settle an antitrust infringement procedure,” said Tony Woodgate from Simmons & Simmons. “These ‘commitments decisions’ are currently the European Commission’s favored mechanism to close abuse of dominance proceedings, saving enforcement resource and allowing for a speedy resolution.
The dispute went as far back as 2007, when Opera, a Norwegian web browser maker, complained that Microsoft was stifling competition by bundling Internet Explorer with its operating system. The European Commission also gave a strong warning to other companies. “I hope this will make companies think twice before they ever thinking of breaching their international obligations,” said Joaquin Almunia, the vice-president of the European Commission.
Despite Microsoft’s compliance with fixing the issue, one industry watcher suggested there were still unresolved issues. “While it’s highly likely that it was a technical mistake that broke the browser choice facility the fact that it remained broken for 14 months raises significant questions about Microsoft’s ability and willingness to comply with the voluntary agreement with the EU,” said Chris Green, principal analyst at the consultants Davies Murphy Group Europe.