EU to investigate Microsoft for antitrust compliance
BRUSSELS, Belgium - The EU's executive body, the European Commission, announced yesterday that it was opening an investigation into whether Microsoft has kept the antitrust commitments it made in 2009, and warned that penalties for non-compliance would be "severe."
Microsoft conceded it had "fallen short" of meeting its obligation to provide the "browser choice screen," or BCS. The choice screen would allow users of Microsoft's Windows operating systems to select a browser other than Microsoft's Internet Explorer.
"Due to a technical error, we missed delivering the BCS software to PCs that came with the service pack 1 update to Windows 7," Microsoft said in a statement.
The company said that PCs running the original version of Windows 7, as well as Windows XP and Windows Vista, did have the screen.
"While we have taken immediate steps to remedy this problem, we deeply regret that this error occurred and we apologize for it," Microsoft said.
EU Competition Commissioner Joaquin Almunia told reporters it appeared that the choice screen, promised by Microsoft in 2009 following an antitrust case, has not been provided since February 2011, meaning 28 million customers who should have seen it may not have.
Microsoft submitted a report to the Commission in December asserting that the browser choice screen was being provided as required. In its statement Tuesday, the company said it believed at the time that was the case.
The company said it had retained outside help to conduct a formal investigation of how the technical error occurred and to make suggestions to avoid such compliance problems in the future.
It also said that it was offering to extend the time during which it is obligated to display the choice screen by an additional 15 months.
"We understand that the Commission will review this matter and determine whether this is an appropriate step for Microsoft to take," the statement said. "We understand that the Commission may decide to impose other sanctions."
Keith Hylton, a law professor at Boston University, said the Commission was overreacting.
"There may be a few people on the planet, living deep in forests on the Marshall Islands, who are not already aware that Microsoft's Internet Explorer is not the only browser available," Hylton said. "Google's reminders about Chrome are hard to escape."
Hylton said that, in the US, courts would ask for evidence that consumers had be harmed -- evidence Hylton said he doubted could be found in the Microsoft case. He speculated that the Commission was either protecting domestic competitors or raising revenue.
Anthony Michael Sabino, a professor of business law at St John's University in New York, said the Commission was entitled to enforce its settlement, but its "unremitting hostility" reflected the difference between US and European antitrust enforcement.
"In the US, the law protects competition; in Europe, the antitrust regulators use the law to protect competitors, especially homegrown ones," Sabino said.
Almunia said this would be the first time this type of legally binding agreement with the Commission had not been complied with.
"Needless to say, we take compliance with our decision very seriously," he said. "If the infringement is confirmed, there will be sanctions."
All told, the European Union has so far fined Microsoft (euro) 1.64 billion ($178 billion).