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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: If I was MS
By Cheesew1z69 on 10/24/2012 7:36:38 PM , Rating: 3
It's THEIR OS, they can put whatever they want into it. As for choice, there was choice.


RE: If I was MS
By StevoLincolnite on 10/24/2012 10:55:23 PM , Rating: 1
Unfortunately, when you release a product in an overseas territory, you need to abide by it's laws and regulations.

If the EU mandated that all of Microsoft's products must be a bright fluorescent pink, then Microsoft has to do it if it wishes to sell it's product in that territory, regardless if us, the consumers like it or not. :(


RE: If I was MS
By Solandri on 10/24/2012 11:47:34 PM , Rating: 1
quote:
It's THEIR OS, they can put whatever they want into it.

You cannot leverage a near-monopoly in one market to create an advantage for yourself in another. If Ford owned 90% of the automobile market, and decided to change the engine so it would only run on Ford-patented fuel, they would come under anti-trust investigation for it too.

But all this was relevant a 10-20 years ago. IE use is now under 50% and this is no longer the case. Any damage which was done has been done and can't be undone at this stage. So there's little point continuing to force Microsoft to allow users to choose their browser upon initial bootup.


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