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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]

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RE: Can We Stop?
By Reclaimer77 on 3/6/2013 7:18:04 PM , Rating: 2
MS forced European PC manufacturers to NOT install another browser, if they wanted Windows. MS has no right to dictate what a customer should choose.

Sounds like a breach of contract to me. Nothing sinister. PC manufacturers knowingly entered an agreement with Microsoft to do business, and obviously, installing third party browsers to Windows pre-sale was against the Microsoft terms of service.

Customer choice wasn't affected at all. After a PC is purchased, someone can install anything they want to it. Correct?

But, just curious, how exactly could Microsoft "force" PC manufacturers in Europe to do something? Perhaps 'force' was too strong a word.

Got any links to back up these claims by the way?

RE: Can We Stop?
By simsony on 3/6/2013 7:34:36 PM , Rating: 2
Nah I'm done. As far as I'm concerned you know shit all about what has transpired. You're just making some sort opinions out of other opinions.

The end game for you is to concoct some story about how the EU is attacking American capitalism. Anything less wont do.

I can start explaining why iTunes, Apple Safari,Bing etc don't matter, and why google Ads might, but you simply haven't got the open mindset to understand what the problem is.

Go use Google and read up. I checked your browser stats and found it was shite.

RE: Can We Stop?
By Reclaimer77 on 3/6/13, Rating: -1
RE: Can We Stop?
By simsony on 3/6/2013 7:46:55 PM , Rating: 2
Just before you sleep, you're a republican right?

I'll understand American TV so much better if you are!

RE: Can We Stop?
By Reclaimer77 on 3/6/2013 7:53:57 PM , Rating: 2
No, I'm a Conservative. I believe in minimal Government, liberties and freedom, among other things.

And good luck understanding American TV, I've lived here all my life and I still don't.

RE: Can We Stop?
By vXv on 3/7/2013 8:31:49 AM , Rating: 2
No, I'm a Conservative . I believe in minimal Government, liberties and freedom , among other things.

This is a contradiction most conservatives try to limit others freedoms based on religion and other nonsense. (There are enough examples to find, go google).

RE: Can We Stop?
By BZDTemp on 3/6/2013 8:07:04 PM , Rating: 2
But, just curious, how exactly could Microsoft "force" PC manufacturers in Europe to do something? Perhaps 'force' was too strong a word.

I'm sure you could find this out for yourself but let me help you. The customers want Windows so a PC maker could either chose to do what Microsoft demanded or see their customers become ex-customers.

BTW. Microsoft is having a bad week. Denmark is taking them for $1 billion in tax due to some to smart tax evasion scheme in which Microsoft did not follow the rules and tried to put a lot of profit into a tax heaven rather than pay the local taxes in Denmark (the largest Microsoft development site outside the US is in Denmark).

RE: Can We Stop?
By Reclaimer77 on 3/6/2013 10:52:33 PM , Rating: 1
The customers want Windows so a PC maker could either chose to do what Microsoft demanded or see their customers become ex-customers.

So again, you aren't forced. You have a choice. You can use Windows, or try and sell Linux computers or something.

I'm so sick of this anti-business mindset on here. Microsoft can't be blamed for it's own success, and it shouldn't necessarily have to be a victim to it. If you don't like the way Microsoft does things, you can go somewhere else. It's that simple.

But that's not "fair". So we cook up a bunch of BS laws and regulations. Makes me sick.

Also you need to learn the art of the "rhetorical question". I ask a lot of questions in my arguments, not because I'm a dumbass, but because I'm trying to promote thought.

RE: Can We Stop?
By BZDTemp on 3/7/2013 12:36:53 PM , Rating: 2
What makes you think I really thought you needed the question answered? I was mocking you which should be oblivious :-)

It seems to me that you want a totally unregulated market but how you can do that is beyond me. If Microsoft had been allowed to run free there would be no Apple, IE alternatives would be crippled, Windows Media Player would be the only player and Microsoft would get a cut in every piece of media sold and that is just naming a few consequences.

In no is being anti monopoly the same as being anti-business in fact it is the opposite. By ensuring there is real competition it is ensured that new businesses get to come to life and that new ideas is coming to life. Without real competition everything slows to a crawl.

"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken

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