Microsoft caves to EU antitrust pressure over IE

Opera says selling Windows 7, minus browser, in Europe won't restore competition

Microsoft bent to pressure from European Union antitrust regulators today, saying that it will ship Windows 7 to the EU market this fall minus Internet Explorer 8. The company made the call this week to keep Windows 7's European ship date in sync with the rest of the world.

Microsoft last week announced that Windows 7 would go on sale Oct. 22.

"In order to meet that release date, we needed to start telling computer manufacturers this week exactly what to expect in Windows 7 so they can begin ... work necessary to have PCs available in stores in October," Dave Heiner, Microsoft's deputy counsel, said in a post to a company blog Thursday afternoon.

"We're committed to making Windows 7 available in Europe at the same time that it launches in the rest of the world, but we also must comply with European competition law as we launch the product," he said. "Given the pending legal proceeding, we've decided that instead of including Internet Explorer in Windows 7 in Europe, we will offer it separately and on an easy-to-install basis to both computer manufacturers and users."

The company took a page out of its history books, and will add the letter "E" to the end of each Windows 7 edition's name to denote the omission of IE8. In 2006, after it lost the initial round of an earlier EU antitrust case, Microsoft shipped special Windows XP "N" editions minus Windows Media Player.

"The E versions of Windows 7 will include all the features and functionality of Windows 7 in the rest of the world, other than browsing with Internet Explorer," promised Heiner.

To solve the Catch-22 -- how can users connect to the Internet, much less choose another browser over IE8 -- Microsoft expects that OEMs will pick a browser and install it on the PC at the factory. "Consumers will also be able to add any Web browser to their PCs, to supplement or replace the browsers pre-installed by their computer manufacturer," said Heiner.

That's not nearly enough, said Opera Software, the Norwegian browser maker whose December 2007 complaint spurred the European Commission to charge Microsoft with antitrust violations in January 2009.

"It's an interesting development," admitted Hakon Wium Lie, Opera's chief technology officer. "Microsoft was under pressure to do something, but I don't think this will let them off the hook."

Hakon dismissed Microsoft's move as a non-starter. "They're encouraging OEMs to install IE8, so in reality there will be no change for the user," said Lie. "Microsoft will remain dominant and it is not going to restore competition in the browser market." Also unclear, he said, was exactly what parts of IE8 Microsoft would remove. "The rendering engine will remain," Lie argued. "Who knows what Windows Update would do? You could wake up in the morning and see all of IE8 there again."

Both Lie and Mitchell Baker, the chairman of Mozilla, have recently accused Microsoft of force-feeding IE8 to users through Windows Update.

Microsoft's Heiner hinted that some of IE would remain in the "E" versions of Windows 7. "The E versions of Windows 7 will continue to provide all of the underlying platform functionality of the operating system," he said. "Applications designed for Windows will run just as well on an E version as on other versions of Windows 7."

Presumably that would include not only third-party applications, but also Microsoft's own, such as the online Windows Update service that's crucial for keeping a system up-to-date with security patches.

His explanation was similar to the one given by Microsoft back in March, when it added a "kill switch" to Windows 7 that lets users disable IE8, as well as several other integrated applications.

Heiner acknowledged that stripping IE8 from Windows 7 for EU customers may not satisfy regulators. "Our decision to only offer IE separately from Windows 7 in Europe cannot, of course, preclude the possibility of alternative approaches emerging through Commission processes," he said.

One of the most-discussed solutions would be a "ballot screen" that would appear when a PC user first tried to connect to the Internet. The screen would offer users several browser choices that would then either be activated -- if all were pre-installed on the machine -- or downloaded and installed.

Heiner said Microsoft was hesitant to implement a ballot screen approach on its own, and cited "complexity and competing interests" as the reason. Not surprisingly, Opera prefers the ballot idea.

The browser maker also believes that an EU-only fix is a waste of time. "We must look beyond Europe," said Opera's Lie. "By making special European versions of Windows 7, Microsoft makes it harder for OEMs. We need to look for global solutions because this is not only a European problem."


Copyright © 2009 IDG Communications, Inc.

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