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EU Antitrust Fines Could Make Example Out of Microsoft
EU Antitrust Fines Could Make Example Out of Microsoft

By Jennifer LeClaire
March 5, 2013 10:51AM

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"Microsoft neglected to include the so-called 'ballot' screen, offering a choice of browsers," said analyst Greg Sterling of the European Union's threat to fine Microsoft. "However, the imposition of the fine may be more about showing the commission is serious and 'sending a message' than specifically about getting Microsoft to comply."

Microsoft could be facing millions of dollars in fines for failing to comply with orders from European antitrust officials. Microsoft was supposed to give Windows users a choice among competing browsers but failed to do so. If the fine comes down Wednesday as expected, it would mark the first time in European Union history that it has punished a company for neglecting its orders.

Many thought Microsoft put its 10-plus years of antitrust issues in Europe to rest back in Dec. 2009 when the European Commission approved a final resolution of several longstanding competition issues, which included Web browser measures.

Under the resolution, Microsoft committed to allowing PC manufacturers and users to install any browser on top of Windows, to make any browser the default browser on new PCs, and to turn access to Internet Explorer on or off.

Microsoft also agreed to send a "browser choice" screen to Windows users who were running Internet Explorer as their default browser. This browser choice screen was supposed to present a list of browsers, making it easy for users to install any one of them.

Sending Microsoft a Message

Joaquin Almunia, the European Union's antitrust chief, accused Microsoft of failing to keep its word. Microsoft is so far mum on the potential new fines, but had apologized in July, saying a technical glitch was causing issues with the browser choice pledge. Microsoft apparently did not move quickly enough to resolve the issue. Three months later, Almunia charged Microsoft with not providing browser choice in Windows 8. Now, a fine is looming.

"It's important for the commission to show it's serious in this case because this will set a precedent, and because the commission increasingly uses settlements to help reach solutions more quickly, especially in the fast-moving technology sector," Nicolas Petit, a professor in competition law and economics at the University of Liege in Belgium, told The New York Times.

In other words, the European Union may decide to make an example out of Microsoft. It wouldn't be the first time the EU targeted a U.S. tech company with a large fine. Intel was slapped with a $1.4 billion fine, the largest European authorities ever approved, for allegedly abusing its power. Intel appealed the ruling, which is still in limbo.

IE Losing Dominance

Greg Sterling, principal analyst at Sterling Market Intelligence, has been watching Microsoft antitrust cases for more than a decade.

"Microsoft neglected to include the so-called 'ballot' screen, offering a choice of browsers. However, the imposition of the fine may be more about showing the commission is serious and 'sending a message' than specifically about getting Microsoft to comply with its 2009 browser settlement," Sterling told us.

"In the period since 2009, IE has ceased to be the dominant browser on a global basis," he said. "Chrome recently overtook the Microsoft browser, so the concerns that drove the 2009 browser choice settlement have largely been overcome by market forces."

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