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Monday, January 19, 2009
EU: Microsoft's Tying of Internet Explorer to Windows Harms Browser Competition

The European Commission has sent a "Statement of Objections (SO)" to Microsoft on 15th January 2009, accusing Microsoft of stymieing competition by bundling its Internet Explorer Web browser with Windows systems.

In the SO, the Commission sets out evidence and outlines its preliminary conclusion that Microsoft?s tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice.

The evidence gathered during the investigation leads the Commission to believe that the tying of Internet Explorer with Windows, which makes Internet Explorer available on 90% of the world's PCs, distorts competition on the merits between competing web browsers insofar as it provides Internet Explorer with an artificial distribution advantage which other web browsers are unable to match.

"The Commission is concerned that through the tying, Microsoft shields Internet Explorer from head to head competition with other browsers which is detrimental to the pace of product innovation and to the quality of products which consumers ultimately obtain," EU said in a statement.

In addition, the Commission is concerned that the ubiquity of Internet Explorer creates artificial incentives for content providers and software developers to design websites or software primarily for Internet Explorer which ultimately risks undermining competition and innovation in the provision of services to consumers.

It added that Microsoft had eight weeks to reply.

Microsoft has had to shell out over $1 billion in fines to the commission in the past.

Microsoft and the EU have engaged in a running spat over competition issues for years, and the U.S. company has been fined several times for allegedly abusing its 95 percent dominance of personal computer systems through its ubiquitous Windows software.

Microsoft said in a separate statement on Friday that it was studying the Commission's views and did not rule out requesting a formal hearing.

"We are committed to conducting our business in full compliance with European law. We are studying the Statement of Objections now. Under European competition law procedure, Microsoft will be afforded an opportunity to respond in writing to this Statement of Objections within about two months. The company is also afforded an opportunity to request a hearing, which would take place after the submission of this response. Under EU procedure, the European Commission will not make a final determination until after it receives and assesses Microsoft's response and conducts the hearing, should Microsoft request one," the company said in the statement. BR>
In February, the EU fined the U.S. software company a record 899 million euros for discouraging software competition, the biggest ever imposed on a corporation at the time.

Microsoft controls an estimated three-quarters of the Web-browsing market through Explorer.

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