Print 92 comment(s) - last by Phoenix7.. on Mar 10 at 8:41 PM

EU's continues to milk its favorite cash cow

How much does "whoops" cost?  If you're Microsoft Corp. (MSFT) the answer is $731M USD.

The EU pummeled Microsoft this week with a €561M fine for defying its browser selection edict, which called for special features to be added to versions of Windows sold in the European Union.  

Comments the EU:

The European Commission has imposed a €561 million fine on Microsoft for failing to comply with its commitments to offer users a browser choice screen enabling them to easily choose their preferred web browser. In 2009, the Commission had made these commitments legally binding on Microsoft until 2014 (see IP/09/1941). In today's decision, the Commission finds that Microsoft failed to roll out the browser choice screen with its Windows 7 Service Pack 1 from May 2011 until July 2012. 15 million Windows users in the EU therefore did not see the choice screen during this period. Microsoft has acknowledged that the choice screen was not displayed during that time.

The fine brings the Commission's total looting of Microsoft on antitrust violations to around $2.8B USD.  Microsoft's latest violation traces back in 2009, during the launch of Windows 7.  At the time, Microsoft held a dominant position in the browser market thanks to its bundling of its Internet Explorer (IE) browser with its market-leading operating system.

Rival browser makers complained and the EU sided with them, mandating Microsoft to supply a "ballot" screen allowing users to pick between IE and third-party browsers like Google Inc.'s (GOOG) Chrome or Mozilla's Firefox.

Steve Ballmer w Windows 8
Microsoft is facing more big fines for breaking the EU's rules. [Image Source: AFP]

And the approach worked.  It appeared that the most powerful thing driving Microsoft's market share was inertia; most users simply never bothered to download or try other browsers, sticking with the one that was built in.  Once they were presented with a choice, they jumped ship from IE.

Microsoft clearly wasn't happy with this, but it promised to comply with the EU ruling.

Then in May 2011, it release Windows 7 Service Pack 1, which "accidentally" removed the browser selection screen due to a "coding error".  Despite multiple warnings from the EU, Microsoft didn't bother to fix this little "whoops" until over a year had gone past.  As a result the EU opened new proceedings, which culminated with this week's massive fine.

Today Microsoft is in third place in the PC browser market with only about 24 percent of the market, behind Google 35 percent and Mozilla's 29 percent.  But the EU argues vigorous enforcement must continue in order to prevent Microsoft from repeating history and gaining a dominant market position through anticompetitive tactics.

One apparent flaw in the EUs logic, though, is that the antitrust regulators fail to hold mobile operating system makers like Google or Apple, Inc. (AAPL) to a similar standard.  Apple -- whose iPad tablet accounts for the majority of tablet sales -- and Android -- who accounts for the majority of smartphone sales -- both only package their devices with their own proprietary built in browser.  The question remains -- how is that monopoly-promoted bundling any different than what Microsoft did?  

Opera Mmini
Smartphone market leader Google has not been required to provide a browser ballot to phone subscribers by the EU.

But for better or worse the EU appears content to make Microsoft its whipping boy. Microsoft will likely appeal the fine, but past appeals have largely failed.

For now Microsoft's tone was largely apologetic.  In a statement it comments, "We have apologized for [the error].  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."

Sources: Europa [EU press releases], Reuters [Microsoft response]

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: The EU likes money . . .
By simsony on 3/6/2013 6:20:05 PM , Rating: 0
In response to people who say users know anyway - If people were aware, they would have switched. It should not have affected IE share. Not everyone reads about what browsers are out there.

The choice screen was helping with awareness, making Microsoft "forget".

Again correlative not causative data, but then why did MS risk it? Obviously the screen was doing something they didn't like.

All the arguments are red herrings.

For this particular fine, the simple fact is that MS broke the law.

Get the lawyers, argue in court do whatever. Until then a company obeys the law of the land. No matter how big or capitalist.

RE: The EU likes money . . .
By Reclaimer77 on 3/6/2013 6:25:00 PM , Rating: 4
The EU could have spent their own money to raise an "awareness" campaign then. Seriously, where is your logic man?

Apparently it's Microsoft's job to spend their own money to launch an "awareness" campaign for EU citizens? Come on!

Obviously the screen was doing something they didn't like.

DUh? NOBODY running a business would like being forced to advertise competing products! Why can you not understand this?

All the arguments are red herrings.

Sorry no. Maybe look up what red herring means, kid.

Not everyone reads about what browsers are out there.

Now THIS is a red herring. So if people don't educate themselves, it's Microsoft's and the EU's responsibility?

RE: The EU likes money . . .
By simsony on 3/6/13, Rating: -1
RE: The EU likes money . . .
By augiem on 3/6/2013 6:37:46 PM , Rating: 3
A law that specifically singles out one business.

RE: The EU likes money . . .
By simsony on 3/6/13, Rating: -1
RE: The EU likes money . . .
By Reclaimer77 on 3/6/2013 7:07:14 PM , Rating: 3
You'd think MIcrosoft's lawyers would pick on this obvious nugget and win the case?

Are you an idiot? Stop using this talking point. You cannot simply "sue" the European Union in a court of law to get them to change a law. Are you on drugs?

I think the obvious thing is they are the only company breaking the law.

I think you're naive.

RE: The EU likes money . . .
By simsony on 3/6/13, Rating: -1
RE: The EU likes money . . .
By maugrimtr on 3/7/13, Rating: 0
RE: The EU likes money . . .
By Denigrate on 3/7/2013 10:57:15 AM , Rating: 2
It's a rule by fiat by the EU, not law. They absolutely milk Micro$oft for the $'s here. Zero consumers were hurt by this.

RE: The EU likes money . . .
By maugrimtr on 3/8/2013 7:36:19 AM , Rating: 2
Love how people create elaborate fantasies...

It's a law. Which Microsoft broke. So they were fined.

RE: The EU likes money . . .
By Strunf on 3/7/2013 10:56:14 AM , Rating: 2
That's the case with EVERY law that only applies to companies that have a dominant position...

RE: The EU likes money . . .
By Hakuryu on 3/6/2013 7:22:57 PM , Rating: 2
In response to people who say users know anyway - If people were aware, they would have switched.

The question you need to ask, is how many people that are not using IE in Europe, simply chose a different browser at random?

If you are not tech savvy enough to know about different browsers, then you are not going to know which browser you will like best from a 'choice' screen, and will probably just stick with the first thing you try.

Sure MS deserves a fine, but nearly $3 billion to let people randomly choose their browser? Seems overly harsh to me.

RE: The EU likes money . . .
By michael67 on 3/7/2013 4:09:04 PM , Rating: 2
Sure MS deserves a fine, but nearly $3 billion to let people randomly choose their browser? Seems overly harsh to me.

The 3b fine was not only for the browser choose.

It was also because of the bundling of WMP and Messenger

And also for MS with a dominant near monopoly OS opening up there library's, so other companies could better integrate in to the OS.
The first to complain about that was Novel in 1993, about the lack of information for third parties.

Al with all MS got big for a great part because of anti competitive behavior, and its bin in problems over that whit both the US and EU regulators, only the EU regulators bin more active going after MS for it.

I think if the US regulators would have bin more active controlling MS's behavior, MS would not have bin thinking, they could get away with what they liked also in the EU, like they could in the US.

EU money grab, and not benefiting the victims of MS behavior!

Those how say that, actually don't even know how the law works.

Governments give fines and/or rules to follow as punishments to companies that brake the rules, and that money go's in the budget for the common good.

Ware companies that are bin wronged have to sue one and a other, like Apple done with Samsung, and AMD did with Intel.

One is criminal law the other is civil law.

Just like in a accident ware the government only gives you a fine or other punishment for a accident you caused, but they don't give the other party i dime of that money as compensation.

That other party, have to sue you in civil court, for that compensation.

The EU gives now MS punishment, because they broke the agreement they made with the EU, and that fine go's in the EU budget for the common good, ware everyone in the EU that bin given less options because of MS's wrong doing get compensated that way.

If the companies that have bin pushed out of the market want to be compensated, they have to go to civil court, just like AMD did whit Intel, for muscling AMD out of the market in a unfair manner.

The EU is only after MS and extorted 3 billion out of them

MS is literally the only company that this happened to.

The EU has fined Microsoft for non-compliance every two or three years since 2004.

2004 - €497 million
2006 - €280.5 million
2008 - €899 million
2013 - €561 million

Some say It's a revenue stream for them now, it's not about competition.

But you could also conclude that the Microsoft's leadership is to stupid and pigheaded to learn form there mistakes!

And apparently only hurting the company in there wallet, is the only way they learn, its not as if they had not there chance to learn how EU regulators work in the past, and they did not correct there ''mistake'' ASAP, but taken there time for 15 months to fix a problem that could have bin (partly) fixed with Windows Update.

Call me a idiot, but taken 15 months to fix something that can be done with in a day, or at least a week true Windows Update is just asking for real problems.

And its even a problem that should have bin founded out before rolling W7 SP1 out in the first place.

Everyone was sleeping at the wheel at Microsoft, and even when the EU and almost all websites honked there horns, nobody woke up at MS, and said, hey this is something we have to fix this asap!

Or do you think if your local bar keeps open till 4AM even do it permit says it has to close a 2AM will not be fined, and after 15 months be closed if they ignore local ornaments ?

They never DENIED anyone from choosing alternative clients.

That still dose not mean that they didn't do any do anything wrong.

Its real hard to make good comparison or example, as MS position is pretty unique.

But what if i am a big car company with a 95% market share, and open up a car dealership that is the only car dealer in the region, and has a almost monopoly like MS has, and with that car dealership comes a tire center, and it gives life long free tires whit there cars, and by doing that they are running the local tire center out of business.

That car dealer never DENIED anyone from choosing alternative tire's, but it made doing business in practice just impossible, as no one is gone pick tiers that come for free with the car, or even bother to go the the alternative center even if they give them away for free, people just don't bother with it.

This is what called bundled sales, and if you have a monopoly or a oligopoly, like MS dose, then this practices is illegal.

So you pay more for the hole package, and the seller crushes competition, and you are left with less choices, and the big players win.

Because most do not get is that this actually really limits consumer choices!

Yeah but IE, WMP and Messenger are free, stop nagging about this BS!

Do you really think MS puts in loads of money and have hole development teams around IE, WMP and Messenger (now Skype), and even pay $8.5b for Skype.

Just to make you happy and give there costumers a +10b free gift as a bonus to bundles of software for "free" with Windows?

No, its to lock you in to there platform, and make you pay more for your next licensing of there software.

They already paid their anti-trust fines from the cases where they were actually have being anti-competitive.

So what your saying, they got caught doing 140 mph on a 60 road, and then they ware put on probation and make promise/contract before the judge to never speed again!

But still during probation time, they broke there promise and got caught doing 70 mph, and not only by accident, but kept on doing 70mph for 15 months!

And now people against the fine are saying, because they already paid a huge fine, we should just let them go now!

Little strange logic imho, but that can maybe be just us dumb Europeans!

RE: The EU likes money . . .
By Valahano on 3/8/2013 9:18:25 AM , Rating: 2
Well put.

Many voices here forget that Microsoft has an OS monopoly, therefore special rules apply. EU is trying to prevent MS from making anti-competitive moves by utilizing their OS dominance.

As far as I understand the situation, Microsoft did deserve these fines.

"DailyTech is the best kept secret on the Internet." -- Larry Barber

Latest Headlines
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM

Most Popular ArticlesSmartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
UN Meeting to Tackle Antimicrobial Resistance
September 21, 2016, 9:52 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Update: Problem-Free Galaxy Note7s CPSC Approved
September 22, 2016, 5:30 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki