Update: EU hits Microsoft with new antitrust charges

Regulators object to Microsoft's bundling of IE with Windows

Microsoft Corp. confirmed today that European Union regulators have formally accused the company of breaking antitrust laws by including the company's Internet Explorer (IE) browser with the Windows operating system.

"Yesterday, Microsoft received a Statement of Objections from the Directorate General for Competition of the European Commission," the company said in a statement on Friday. "The Statement of Objections expresses the Commission's preliminary view that the inclusion of Internet Explorer in Windows since 1996 has violated European competition law."

According to Microsoft, the EU claimed that "other browsers are foreclosed from competing because Windows includes Internet Explorer."

The Norwegian browser maker that first filed a complaint with about Internet Explorer applauded the EU's move. "We commend the Commission for taking the next step towards restoring competition in a market that Microsoft has strangled for more than a decade," said Jon von Tetzchner, the CEO of Opera Software ASA. "[This] demonstrates that the Commission is serious about getting Microsoft to start competing on the merits in the browser market and letting consumers have a real choice of browsers."

In December 2007, Norwegian browser maker Opera Software ASA filed a complaint with the EU that argued Microsoft stifled competition by bundling IE with Windows, and that the U.S. developer hindered interoperability by not following accepted Web standards.

In its December 2007 complaint to the EU, Opera argued that Microsoft stifled competition by bundling IE with Windows, and that the U.S. developer hindered interoperability by not following accepted Web standards.

At the time, the Competition Commission said it would "study this complaint carefully." Later, when it announced an official investigation, it credited Opera's complaint for jump-starting its action.

Several months earlier, the EU's second-highest court had ruled against Microsoft's appeal of a landmark 2004 antitrust ruling, and reaffirmed record-setting fines. Within a month, Microsoft caved on all counts, saying it would not appeal further and would slash licensing prices for Windows protocols.

Closing that case, however, did not mean that the EU would back off. In February 2008, after the EU levied a final $1.3 billion fine on Microsoft for the 2004 violations, Neelie Kroes, the head of the Competition Commission, warned Microsoft that it faced further action. "This is about the 2004 decision only," Kroes said in 2007, talking about the latest fine, "and not about any of Microsoft's other actions."

Investigations announced a month before, including one based on Opera's complaint about IE, would continue, she said. "There are lessons I hope Microsoft will learn," she added at the time.

The EU is also investigating a complaint that involves Microsoft's Office suite. That complaint was filed by the European Committee for Interoperable Systems, a trade group whose members include many of Microsoft's rivals, including Adobe Systems Inc., IBM, Oracle Corp. and Sun Microsystems Inc., and deals with Office 2007's native file format, Open XML.

Today, Microsoft said it is "committed to conducting our business in full compliance with European law," phrasing that it has used in the past when responding to EU antitrust actions. It said it would respond to the charges within the next two months, as it is allowed by law, and left open the door to requesting a hearing, as is its right.

The EU Completion Commission was not available for comment Friday.

Copyright © 2009 IDG Communications, Inc.

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