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Tuesday, July 17, 2012
Brussels to Investigate Microsoft's Browser Choice Commitments

The European Commission (EC) has opened proceedings against Microsoft in order to investigate whether the company has failed to comply with its 2009 commitments to offer users a choice screen enabling them to easily choose their preferred web browser.

The EC believes that Microsoft may have failed to roll out the choice screen with Windows 7 Service Pack 1, which was released in February 2011. This is despite the fact that, in December 2011, Microsoft indicated in its annual compliance report to the EC that it was in compliance with its commitments. From February 2011 until today, millions of Windows users in the EU may have not seen the choice screen. Microsoft has recently acknowledged that the choice screen was not displayed during that period.

"We take compliance with our decisions very seriously. And I trusted the company's reports were accurate. But it seems that was not the case, so we have immediately taken action. If following our investigation, the infringement is confirmed, Microsoft should expect sanctions", said Joaqu?n Almunia, Vice President of the Commission in charge of competition policy.

On 16 December 2009, the EC made legally binding on Microsoft commitments offered by the US software company to address competition concerns the Commission had identified. These concerns related to the tying of Microsoft's web browser, Internet Explorer, to its dominant client PC operating system, Windows. Specifically, Microsoft committed to make available for five years in the European Economic Area a "Browser Choice Screen" (BCS) enabling users of Windows to choose in an informed and unbiased manner which web browser(s) they wanted to install in addition to, or instead of, Microsoft's web browser. The choice screen was provided as of March 2010 to European Windows users who have Internet Explorer set as their default web browser.

The EC will now investigate whether Microsoft has failed to comply with its commitments, in particular the commitment to provide a browser choice screen to Windows 7 users.

Microsoft admitted that it has fallen short in its responsibility to do this. "Due to a technical error, we missed delivering the BCS software to PCs that came with the service pack 1 update to Windows 7. The BCS software has been delivered as it should have been to PCs running the original version of Windows 7, as well as the relevant versions of Windows XP and Windows Vista," Microsoft said.

As the BCS were not being displayed on some PCs, Microsoft developed a software fix, which the company expects to be distributed to all the the PCs by the end of the week.

Microsoft uses its Windows Update service to send the BCS software to Windows-based PCs. Once installed, the BCS software checks to see if Internet Explorer is the default browser and, if it is, the BCS is displayed to the user. The Windows Update system uses "detection logic" to determine which software updates (such as the BCS) to distribute to which PCs.

Since most computer users run earlier versions of Windows, Microsoft estimates that the BCS software was properly distributed to about 90% of the PCs that should have received it. "We recognize, however, that our obligation was to distribute the BCS to every PC that should have received it," Microsoft said. "Therefore, we have moved as quickly as we can to address the error and to provide a full accounting of it to the Commission."

Background information

In 2004 the EC adopted a decision requiring Microsoft to disclose complete and accurate interoperability information to developers of work group server operating systems (file, print and network servers) on reasonable terms so that they could interoperate with Microsoft's dominant PC operating system Windows. The decision also found that the tying of the Windows Media Player to the Windows operating system was an abuse of a dominant position. The Commission imposed a fine of EUR 497 million.

In July 2006 the Commission imposed on Microsoft a first penalty payment of EUR 280.5 million for non-compliance with its obligations under the 2004 decision concerning the completeness and accuracy of the interoperability information. This was the first time that the Commission had ever imposed a penalty payment for non-compliance.

In 2008 the Commission imposed on Microsoft a second penalty payment of €899 million, for non-compliance with its obligations under the 2004 decision concerning the level of royalties for this interoperability information. On 27 June 2012 the General Court upheld this Commission decision. It however reduced the penalty payment to EUR 860 million.

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