European Commission Imposes €561 Million Fine On Microsoft For Technical Error In Browser Choice Screen

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European Commission today announced a fine of €561 Million on Microsoft for failing to comply with user browser choice related commitments. Due to technical error, browser choice screen didn’t appear on PCs sold in EU from the period of May 2011 until July 2012 causing the non-compliance with commitment to EC.

Microsoft apologized for the technical error and issued the following statement.

We take full responsibility for the technical error that caused this problem and have apologized for it. 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.

Full press release after the break.

Antitrust: Commission fines Microsoft for non-compliance with browser choice commitments

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.

Commission Vice President in charge of competition policy Joaquín Almunia said: “In 2009, we closed our investigation about a suspected abuse of dominant position by Microsoft due to the tying of Internet Explorer to Windows by accepting commitments offered by the company. Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems. Of course, such decisions require strict compliance. A failure to comply is a very serious infringement that must be sanctioned accordingly.”

In December 2009, the Commission had made legally binding on Microsoft commitments offered by the US software company to address competition concerns related to the tying of Microsoft’s web browser, Internet Explorer, to its dominant client PC operating system Windows (see IP/09/1941, MEMO/09/558 and MEMO/09/559). Specifically, Microsoft committed to make available for five years (i.e. until 2014) in the European Economic Area a “choice screen” enabling users of the Windows operating system 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. While it was implemented, the choice screen was very successful with users: for example, until November 2010, 84 million browsers were downloaded through it. When the failure to comply was detected and documented in July 2012, the Commission opened an investigation (see IP/12/800) and before taking a decision notified to Microsoft its formal objections in October 2012 (see IP/12/1149).

This is the first time that the Commission has had to fine a company for non-compliance with a commitments decision. In the calculation of the fine the Commission took into account the gravity and duration of the infringement, the need to ensure a deterrent effect of the fine and, as a mitigating circumstance, the fact that Microsoft has cooperated with the Commission and provided information which helped the Commission to investigate the matter efficiently.

Background

When the Commission finds an infringement of EU antitrust rules such as an abuse of a dominant market position (Article 102 of the Treaty on the Functioning of the European Union), it may take a decision under Article 7 of the EU’s Antitrust Regulation (1/2003) prohibiting such behaviour and imposing sanctions. The Commission may impose a fine up to 10% of the undertaking’s total turnover in the preceding business year.

However, under Article 9 of the Regulation, the Commission may also conclude an antitrust investigation by making legally binding the commitments offered by the companies concerned. Such an Article 9 decision does not conclude that there is an infringement of EU antitrust rules and does not impose a sanction. However, it legally binds the companies concerned to comply with the commitments. Since the entry into force of the Regulation in 2003, the Commission has taken 29 decisions under Article 9, including the decision on Internet Explorer (IP/09/1941).

If a company breaks such commitments, Article 23 (2) of the Antitrust Regulation empowers the Commission to impose fines of up to 10% of its total turnover in the preceding business year.

The Commission’s investigation into the tying of Windows and Internet Explorer was distinct from the antitrust case involving Microsoft which concluded in 2004 with a Decision finding that Microsoft had abused its dominant position and imposing fines. This case focused on interoperability between Windows and work group servers and on the tying of Windows Media Player to Windows (IP/04/382).

About Author

Pradeep, a Computer Science & Engineering graduate.

  • http://twitter.com/surilamin surilamin

    Fuck the EU, really.

  • http://www.facebook.com/alexander.nevrmind.7 Alexander Nevrmind

    That fine is freaking crazy. I guess the EU is trying to solve their financial issues (Greece, Portugal, Italy) by screwing companies.

    • Bugbog

      Could have been worse!

  • Tirinti

    EU should order Samsung to allow OS change in theier smartphones.

    Or at least prohibit to sell Galaxy S in the countries they don’t sell Ativ S.

    • TheOne2125

      Google lobbies everybody into think that their OS is free so you are not forced to use it.

  • TheOne2125

    So I guess the fine for data abuse to Google should be about 2 or 3 billion because that is far worse. Most people skipped that annoying screen.

  • http://twitter.com/joepann Kitab

    Do other OSs offer “browser choice screens”, to level the playin’ field?

  • http://twitter.com/joepann Kitab

    Do other OSs offer “browser choice screens”, to level the playin’ field?

    • SocalBrian

      Other OSs haven’t been judged to have a dominant market position and to have abused that dominant market position to leverage their share of the browser market.

    • SocalBrian

      Other OSs haven’t been judged to have a dominant market position and to have abused that dominant market position to leverage their share of the browser market.

      • Tips_y

        Then the EU judged wrong regarding browsers because starting 2010, IE started to loose its position of dominance in the browser war, particularly in the period covered by the fine. IE may be still in the majority but it is not anymore in a dominant position. Although I must say that the slide down for IE seems to have slowed down with the introduction of IE9 and IE10. But what is more true is that Windows OS IS still dominating in Europe, as against the U.S. where OSX has gained 15% share. But the EU obviously can’t find a legal reason to fine MS for being dominant in the OS war. Sorry but in my book, the EU is just fleecing MS pure and simple.

        • SocalBrian

          Sorry but as a matter of law this is settled fact – your opinion and rambling don’t change that.

          • Tips_y

            Just because the EU has made it’s ruling doesn’t mean it’s final. MS can still appeal so there’s nothing definite about it. And oh by the way, this is a regulatory matter, not a “matter of law”, so you should check your own ramblings before you check mine.

          • SocalBrian

            The legal matter of browser tying is indeed a settled matter and can no longer be appealed (there are statutory time limits for appeals). Microsoft could, potentially, argue the amount of the fine for this latest violation but it sounds like they may simply accept it.

          • Tips_y

            If you read the above article very well, its main gist is about the fine imposed by the EU Regulatory Commission on MS. That decision is NOT final and executory until after the period for appeal is over or until such time that MS decides to waive the right to appeal within the period provided for by the ruling. And as for your use of the word “legal”, I’ll let that pass as a common use/misuse of the word, unlike your complete misuse of the phrase “matter of law”. Oh, as an aside by the way, just because a bill is passed and signed into law does not make it necessarily constitutional and/or moral.

          • SocalBrian

            Look, we get it – you don’t like the European anti-trust law. That doesn’t matter. Microsoft in this case isn’t being fined for violating that law, they’re being fined for failing to obey an agreement that they agreed to. They’ve admitted their guilt and it doesn’t seem like they are even going to challenge the amount of the fine.

            The fact that a law may be changed by new legislation or by the courts is irrelevant (it’s true of all laws).

          • Tips_y

            “WE”?!! You mean there’s not one but a bunch of you trolls working together?!! And to think that I was beginning to get exasperated that there seems to be so many in this site posting OT, inaccurate, silly, and even downright rude and uneducated comments! Say hello to Thomas Bondsguard and Nokes for me. And also say hello to Steve Ballmer – your statement “it doesn’t seem like they are even going to challenge the amount of the fine” would indicate you might know him personally. … Wait! when you say “WE”, are you sure you’re not just suffering from Multiple Personality Disorder?!! LOL!

          • SagetB

            Tips_y why dont you just become and Fandroid or iFan if you want to argue for the sake of argument just because the facts do not jive with your distorted reality.

            I remember the good old days when MSFT supporters was thoughtful and intelligent rather then blind faith apologist for the company. It sad there seem to be fewer and fewer of the former.

          • Tips_y

            Coming from a troll, or trolls, who does/do make very little sense, that cracks me up! LOL!

          • SocalBrian

            Every time you’re challenged you change your argument – and you want to call me a troll?

            Here’s Reuters coverage of the story, they are the one’s reporting that Microsoft is unlikely to challenge the ruling:

            http://www.reuters.com/article/2013/03/07/us-eu-microsoft-idUSBRE92500520130307

            “The company did not say whether it would
            challenge the ruling, but it is not expected to do so, largely so as not
            to antagonize regulators.”

          • Tips_y

            Rruter’s statement is carefully worded and prefaced because they know as well as I do that this is not yet a closed case contrary to you want to imply. Yes, you, and all your alter egos, are trolls because you fit the dictionary meaning of the term perfectly. You and your ilk have called me derogatory names, the most recent accusing me of being disingenuous so yes you are all trolls.

  • http://twitter.com/joepann Kitab

    Do other OSs offer “browser choice screens”, to level the playin’ field?

  • markjonson

    I still stand by what I’ve said before. Microsoft should have just threatened to pull Windows out of the EU. I bet they’d rethink that fine if Microsoft withdrew those Windows licenses and deactivated the OS on millions of PCs across an entire continent. And what would PC makers sell there? Linux on the desktop? Ha!

    • Trappist

      When MS pulls Windows out of EU (is it their largest single market?) the share holders will kick Ballmer out quicker than he can spell “an uber-idiotic decision.”

      • Reality

        Not just Windows revenue, but Office and well everything running on Windows would be written off — that is billions in profits… MS is utterly dependent on the EU.

    • grs_dev

      The EU is less dependent on Windows than the rest of the world. I am sure they looked at all their options.

      This is politics. This is the price of doing business in the EU.

      • Joe_HTH

        Windows is still by far the most dominant OS in Europe, far more dominant than Linux.

      • Tips_y

        Actually windows OS is still by far the more popular OS in Europe, as against the U.S. for instance where OSX has gained 15% share. But ironically, IE has been steadily loosing its foothold in EU since Chrome browser was introduced – and it’s funny because the subject of the fine is specifically browser choice in Windows.

  • Trappist

    “Technical problem” that lasted 18 months without Ms’s noticing, LOL.

    MS wanted to see whether EU was serious or not with that ruling. They were serious and MS is now paying some pocket money, happily as they say, having found out what they wanted. Nothing to see here. Let’s move on.

  • koenshaku

    How ridiculous is this..

  • Myclevername

    The EU bureaucrats need to justify their existence somehow. This is obviously how they do it. Microsoft will contest this and get it reduced. This fine can be paid from 6 months of Android licensing fees. Maybe the US should fine Volkswagen the exact same amount? I think they did something wrong a few years ago.

  • Rob Pearson

    Looks like Microsoft got 10% of the potential fine plus 14 months off the 5 year punishment, not a bad job by Microsoft really.

  • Naveenangels

    I do understand EU POV but then who is going to fine apple for including Safari & Google for including Chrome in Android….. MSFT is just being targeted because they are market leaders