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Regulators don't buy Microsoft's excuses about a "technical error"

It had seemed that Microsoft Corp. (MSFT) and the European union had finally resolved their differences when it came to antitrust issues.  Microsoft agreed that it would offer a special "ballot screen", which would give users the choice of multiple browsers when they first installed or used Windows 7 -- and as a result, third-party browser makers would be on a level playing field and face no "bundling" discrimination.  The EU asserts its claims were validated, as the ballot screen appeared to cause a large drop in Microsoft's EU browser market share.

But that fragile true has been shattered when Microsoft went back on its promise, and stopped offering the ballot screen -- temporarily -- with the rollout of Windows 7 SP1.  Microsoft in past comments has blamed the abandonment of the option on an undisclosed "technical error" in the update.

EU regulators are unsympathetic.

This week they announced a so-called "statement of objections" -- a procedural step serves as a warning of impending punishments.

The EU's antitrust regulator, the European Commission writes:

The European Commission has informed Microsoft of its preliminary view that Microsoft has failed to comply with its commitments to offer users a choice screen enabling them to easily choose their preferred web browser. In 2009, the Commission had made these commitments legally binding on Microsoft (see IP/09/1941)....

In its statement of objections, the Commission takes the preliminary view that Microsoft has failed to roll out the browser choice screen with its Windows 7 Service Pack 1, which was released in February 2011. From February 2011 until July 2012, millions of Windows users in the EU may not have seen the choice screen. Microsoft has acknowledged that the choice screen was not displayed during that period.

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

It's hard to say what, if anything, Microsoft can do at this point to avoid punishment for "accidentally" breaking its agreement with the EU.  One important thing to note, though, is that the precise punishment has not been announced.  Thus it is probably in Microsoft's best interest to provide sound technical evidence (if it has it) supporting its assertion that the ballot screen was turned off on accident.

The company faces tough questions, in the sense that even if it's telling the truth about the initial error being accidental, that it's hard to believe that the company wouldn't notice the ballot screen being gone for a full year.  Add to that the background that Microsoft had seen its market share disintegrate after the browser screen went live, and the picture painted is rather incriminating.

Microsoft has struggled in the past with the region's stricter antitrust laws.  It recently lost its appeal to vacate a €899M fine, although the EC did kindly reduce it to a mere €860M ($1.1B USD).  The software giant has paid close to $2B USD in total fines to the European union for antitrust offenses.  

Microsoft is also being investigated for API abuse, following claims by third party browser makers that they were being "excluded" from the ARM-architecture-compatible version of Windows 8.

Source: EU

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RE: IE does not have a dominant market share
By bebimbap on 10/24/2012 2:23:18 PM , Rating: 2
It's not that IE has dominant market share, it's the fact that Windows has dominant market share roughly about 85%

If you don't give a choice to 85% of the users out there, then you automatically have 85% or greater market share. That is what EU is trying to prevent.

Though it seems unfair that MS has to take such a hard hit on this, but when you become a very large percentage of the majority you be come heavily regulated.

If these companies were left alone, MS would price cut everyone and give large penalties and withhold product from distributors if they chose to use competitor's products.
remember the fiasco with Intel and Dell, where Dell wasn't allowed to sell any AMD products or Intel would be slow to ship the latest chips, or price their chips higher, etc.

RE: IE does not have a dominant market share
By andrewaggb on 10/24/2012 2:45:29 PM , Rating: 2
MS should abide by the law and their agreements.

But I disagree with this whole argument and the ballot stuff. That's insulting to Microsoft and pretty unfair all around.

Windows RT not having any other browsers might pose a problem, but considering it currently has 0% market share and the one with 85%+ market share is way more anti-competitive than MS ever was... I think they'll be fine.

RE: IE does not have a dominant market share
By NellyFromMA on 10/24/2012 2:57:43 PM , Rating: 2
iPads dominate the market and have no ballot screen or truly alternative browsers. Where's the unbiased fairness of the EU?

Oh wait, they're trying to boost their bailout fund.

By raddude9 on 10/25/2012 4:50:31 AM , Rating: 1
There were no iPads when the EU started this investigation back in 2004, when microsoft had over 91% of the browser market. iPads can only flourish now because microsofts dominance of the browser market has diminished. If microsoft still had over 90% do you think the browsing experience on an iPad would be any good? No doubt everyone would be complaining that it didn't run ActiveX or play WMA audio or WMV video or any of the other microsoft standards that would still be prevalent if microsoft still had that much of the market.

Have you any evidence that they are trying to boost their bailout fund, because when this ruling came down back in mid 2008 there was no need for a bailout fund, so maybe they really were just trying to protect consumers.

By DiscJay on 10/24/2012 4:07:10 PM , Rating: 2
I don't think any OS company should have to provide any browser choice. The choice of which browser to use is up to the user. If they choose to go out and find another browser then so be it. If they choose to use the browser that comes with their OS then so be it.

By Schrag4 on 10/24/2012 5:24:25 PM , Rating: 2
If you don't give a choice to 85% of the users out there, then you automatically have 85% or greater market share. That is what EU is trying to prevent.

Ah, but users have always had a choice. Do you really need to be spoon-fed every option of every little choice in life? I bet you could use Bing to find the downloads for those other browsers in a few seconds LOL!

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