Microsoft could face billions in new fines over browser choice

Computerworld - European Union (EU) antitrust regulators today threatened Microsoft with more fines, potentially massive ones in the billions of dollars, after the company failed to make good on its promise to offer consumers there a choice of browsers.

The EU's chief regulator, Joaquin Almunia, talked tough. "If the facts are confirmed, [I will] use the legal instruments at my disposal to deter and to punish [Microsoft]."

In announcing the new investigation, Almunia, the head of the EU's Competition Commission, added, "If confirmed, this would have severe consequences ... and there will be sanctions."

Microsoft immediately apologized, calling the failure to offer the browser choice screen to Windows 7 users a "technical error."

The browser ballot was the result of a deal Microsoft struck with the Competition Commission in late 2009 after officials launched an investigation after a complaint from Norwegian browser maker Opera Software. Opera accused Microsoft of manipulating the battle for browser share by tying Internet Explorer (IE) to Windows.

Opera applauded the new investigation. "We welcome the fact that the EU Commission is willing to take measures to make sure Microsoft lives up to its commitments from 2009," a company spokesman said in an email.

The settlement required Microsoft to display a screen in Windows that provided download links to other browsers, including Apple's Safari, Google's Chrome, Mozilla's Firefox and Opera Software's Opera. The same browser ballot must appear in Windows 8, the upgrade slated to ship in October.

According to Almunia, Microsoft dropped the ball. "It appears that since the launch of Windows 7 Service Pack 1 the choice screen has not been displayed," Almunia said at a news conference in Brussels Tuesday morning.

Microsoft launched Windows 7 Service Pack 1, or SP1, the first major upgrade to the 2009 operating system, in February 2011.

Almunia claimed that as many as 28 million Europeans had been denied the browser choice screen because of Microsoft's blunder.

In a statement of its own, Microsoft claimed the omission was an oversight.

"Due to a technical error, we missed delivering the BCS [browser choice screen] software to PCs that came with the Service Pack 1 update to Windows 7," the company said. "We learned recently that we've missed serving the BCS software to the roughly 28 million PCs running Windows 7 SP1."

Microsoft also downplayed the problem, noting that users running other editions of Windows, including Windows XP, Vista and the original version of Windows 7, received the browser ballot correctly. "We estimate that the BCS software was properly distributed to about 90% of the PCs that should have received it," said Microsoft.

Although Almunia said nothing about the Competition Commission's take on Microsoft's explanation, he did say that while he prefers settling with companies accused of antitrust violations rather than go through the lengthy process of filing formal charges, that only worked if deals are religiously adhered to.