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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 Gurthang on 10/25/2012 9:32:11 AM , Rating: 3
Wrong, double wrong with extra crunchies.

Any bundling of Netscape Navigator that you may have eperienced with your install of Windows 95 was done by the OEM who customized the 95 install for the PC you bought from them.

As to Microsoft "stealing"... The orginal Netscape Navigator was made by a former NSCA Moasic developer and hence it borrowed heavily from design of Moasic though no code was "copied" or shared between them but you can bet most of the orginal code was built on ideas devised in Moasic. Internet Explorer 1.x was built from code bought from Spyglass which was built from NSCA Moasic. So while I am sure in the great feature battles of the first browser war both sides borrowed and stole ideas bot browsers actually are related hence the similarities. Things started going in IE's favor around IE3 though mostly because Netscape got a reputation of being buggy.

While MS's IE contributed to Netscape's demise they were a victim of a bad business model. Basically the browser as a paid for application was never going to work and they knew it s they gave the betas away for free which ment everyone just hoped from beta to beta. Netscape made far more money from their web server software at first but Sun kicked their butt on the high-end and the "free" web servers like IIS started eating them up on the low end. Resulting in diminishing profits and ultimatly a buyout by AOL who mostly used Netscape as a bargining chip with MS to get a better deal with the whole IE integration in AOL. As management styles clashed between AOL and Netscape employees got things got worse and most the the talent jumped ship. The rest is history.

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