Regulators feel Microsoft hasn't shown sufficient submission to edict

In the member states of the European Union, Microsoft Corp.'s (MSFT) Windows 7 offers a little something special -- a ballot screen -- which on install presents the user with a choice of what browser they want to use.   But EU regulators are not satisfied by the interface Microsoft cooked up and are considering new mandates -- and, potentially, fines. 

I. A Rocky Relationship

The ballot screen is part of a settlement between Microsoft and antitrust regulators in Europe.  

Microsoft was fined nearly $2B USD in a series of fines, the largest of which was a record $1.4B USD fine.  Most of the fines were for Microsoft refusing to expose certain parts of its API to third-party competitors, in order to give its own first-party apps, like the Office suite an advantage.  The EU said this would have been okay, were it not for the fact that Microsoft controls a dominant 90 percent stake in the PC operating system market.  As a result of that unique position, the EU perceived the tactic as an illegal violation of antitrust laws.

Similarly the EU took issue with Microsoft's "browser bundling".  Since most computers sold carried Windows, the EU reasoned that Microsoft including its own browser built-in and set-up as the default browser to automatically launch links was responsible for its large market share.

Microsoft could face more EU fines. [Image Source: The Hibernia Times]

Microsoft bowed to the EU demands and gave users the option to install other rival browsers like Google Inc.'s (GOOG) Chrome and the Mozilla Foundation's Firefox.

II. Whoops, Update Turns Off Ballot Screen Feature

The recent spat comes due to what Microsoft calls a "technical error" in the Windows 7 Service Pack 1 build, which caused it to fail to display the ballot screen and return to its old ways of making Internet Explorer the default browser.

Browser Ballot Box
Microsoft's Windows 7 Service Pack 1 "accidentally" turned off the browser ballot box.
[Image Source: Telegraph UK]

Joaquín Almunia, a member of the European Commission -- Europe's antitrust watchdog -- sternly warned Microsoft, commenting, "We take compliance with our decisions very seriously.  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."

Microsoft admits it violated the EU mandate, but insists it was unintentional.  It wants its "probation" (officially referred to as the "compliance period") extended by 15 months, rather than any additional fines or sanctions.

IE 10
The EU is also concerned about Microsoft's Windows 8 efforts.

This may not be the last of its troubles, though.  The EU is reportedly looking to probe Windows 8 and reports by various browser makers that Microsoft is locking them out of parts of its Metro UI API, in order to differentiate Internet Explorer as the "best" Windows 8 browser.

Sources: Europa [EU Press Release], Microsoft

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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