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The European Union Competition Commission today dropped their Web browser antitrust case against Microsoft after final agreement was reached on Microsoft providing a Web browser choice to EU Windows users:
The European Commission has adopted a decision that renders legally binding commitments offered by Microsoft to boost competition on the web browser market. The commitments address Commission concerns that Microsoft may have tied its web browser Internet Explorer to the Windows PC operating system in breach of EU rules on abuse of a dominant market position (Article 102 of the Treaty on the Functioning of the European Union -TFEU). Microsoft commits to offer European users of Windows choice among different web browsers and to allow computer manufacturers and users the possibility to turn Internet Explorer off. Microsoft is also publishing today an undertaking whereby it commits to make far-reaching interoperability disclosures.
I haven’t yet seen the Microsoft "interoperability undertaking" which is supposed to be published today, but that harks back to the previous EU Microsoft antitrust case where interoperability disclosures were a perennial source of contention. As for the browser choice, here’s how the EU says it will work if you are a EU Windows user:
- [Affects] More than 100 million European users of Windows operating systems (XP, Vista, 7, and successors) and many millions more in the future.
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- You will be offered a ‘browser Choice Screen’ where you can freely choose one (or more) of the 12 most popular web browsers, including Mozilla Firefox, Google Chrome, Apple Safari and Opera.
- Each browser will be accompanied by information from the producer, to help you – the customer – make a free and informed choice.
- If you have Microsoft’s web browser set as your default browser and have chosen to ‘automatically accept Windows updates’, you will be automatically directed to the ‘Choice Screen’. If updates are not automatically installed, you will be offered an option to confirm you want to receive the Choice Screen update.
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- The browser Choice Screen software update will start in March 2010.
- The Choice Screen update will be available for 5 years.
This strikes me as a smart move on Microsoft’s part. Butting heads with the Neelie Kroes has proven to be be a no-win strategy and offering the choice screen is cheap and more cynically, will likely not discernibly affect the market share of Internet Explorer. Yes IE’s share is dropping in Europe and elsewhere, but my impression is that any PC user savvy enough to want another Web browser can already find it without a choice screen. So, the Eurocrats are now happy and Microsoft has dodged another expensive legal bullet.
UPDATE: Microsoft’s Brad Smith, Senior Vice President and General Counsel has issued a statement and besides discussing the choice screen, details the "interoperability undertaking":
The second measure is a “public undertaking” that covers interoperability with Microsoft’s products—the way our high-share products work with non-Microsoft technologies. This applies to an important set of Microsoft’s products—our Windows, Windows Server, Office, Exchange, and SharePoint products. We believe it represents the most comprehensive commitment to the promotion of interoperability in the history of the software industry. Under this undertaking, Microsoft will ensure that developers throughout the industry, including in the open source community, will have access to technical documentation to assist them in building products that work well with Microsoft products. Microsoft will also support certain industry standards in its products and fully document how these standards are supported. Microsoft will make available legally-binding warranties that will be offered to third parties.
Our interoperability undertaking reflects the policy outlined by the European Commission in a major policy speech given by Commissioner Neelie Kroes in June 2008. At that time, the Commissioner said that companies offering high-share software products should be required to (i) disclose technical specifications to enable interoperability; (ii) ensure that competitors can access complete and accurate information and have a remedy if not; and (iii) ensure that the technical specifications are available at fair royalty rates, based on the inherent value of the technology disclosed. Our interoperability undertaking, developed through extensive consultation, implements this approach in full.
As we’ve said before, we are embarking on a path that will require significant change within Microsoft. Nevertheless, we believe that these are important steps that resolve these competition law concerns.
Click through for a host of Microsoft documents including the Microsoft Public Undertaking (Word file) itself. This is being overshadowed in the news by the browser choice screen, but I suspect the interoperability agreement is more important. I have not read the fine print yet or seen the Open Source reaction, but I hope that the EU Competition Commission and Microsoft really and truly understand each other on this topic or things could get quite unpleasant.
The European Competition Commission announced today that have reached tentative agreement with Microsoft over their concerns about Web browsers and provision of interoperability information for Microsoft server software. Microsoft’s General Counsel Brad Smith explains it more succinctly:
Today’s announcement addresses two sets of measures. The first covers the inclusion of Internet Explorer in Windows and the way this will work in the future in Europe. This proposed measure ensures that PC manufacturers will continue to be able to install any browser on top of Windows and make any browser the default. It also ensures that PC manufacturers and users will be able to turn Internet Explorer on and off. And it ensures, that for the next five years in Europe, PC users who are running Internet Explorer as their default browser will receive a ballot screen that will enable them to easily download and install another browser if they would like. This ballot screen will be displayed automatically. PC users can make any other browser the default if they prefer. They can even turn Internet Explorer off, although there’s no need to turn off Internet Explorer in order to use a different browser or make another browser the default.
The Commission stated today in its formal notice that, subject to market testing, it intends to adopt a decision that makes the understanding described above legally binding on Microsoft in Europe for the next five years.
The second measure is a “public undertaking” that covers interoperability with Microsoft’s products—the way our high share products work with products from our competitors. This applies to an important set of Microsoft’s products—our Windows, Windows Server, Office, Exchange and SharePoint products—and represents the single biggest legal commitment in the history of the software industry to promote interoperability. Microsoft’s proposed undertaking will ensure that developers throughout the industry, including in the open source community, will have access to technical documentation to assist them in building products that work well with Microsoft products. Microsoft will also be required to support certain industry standards in its products and to fully document how these standards are supported. Microsoft’s proposed undertaking will make available legally-binding warranties that would be offered to third parties.
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The Commission stated in its announcement today that it welcomes the company’s interoperability initiative. For reasons relating to European legal procedure, this interoperability undertaking follows a different procedural path from the web browser proposal. However, Microsoft will adopt the proposed undertaking in final form upon the Commission’s final adoption of the Internet Explorer commitments.
Public comment is invited and I can see possibilities for the settlement to still go awry before the EU Competition Commission makes its final decision, but it is clearly a step in the right direction for Microsoft who has gained nothing from the pitched battle they have fought in Europe.
Late last Friday, the European Competition Commission revealed that they are assessing a new Microsoft offer to resolve their browser competition complaint. Instead of Microsoft’s earlier plan to ship no Web browser at all with Windows 7 in the EU, Microsoft has offered to provide EU users of Windows XP and Vista as well as Windows 7 with a "ballot screen" with download links for the 5 most popular alternative browsers.
There are more details in the attachments to the Microsoft press release describing the proposal, but the basic idea is to provide current and easy download and installation links for the Web illiterate who can’t manage to find them on their own. Congratulations to Microsoft for trying to sidestep the black hole of actually shipping third party code. The EU seems to have a much more positive view of this proposal than the "no browser" plan, so Microsoft may actually get away with it.
In case you wondering, Microsoft’s "no browser in EU versions of Windows 7" plan is still the plan of record until the European Commission accepts this new offer.
Getting far less press, but also significant was that Microsoft is also offering more interoperability information for its software including Windows, Windows Server, Office, Exchange, and SharePoint. That is spelled out in the attachments to the press release too and takes two forms:
The latter is apparently intended to address the second part of Opera’s original EU browser complaint that Internet Explorer was noncompliant with Web standards. It will be interesting to see whether this part of Microsoft’s offer will satisfy the Eurocrats, but I would bet that documentation of noncompliance will not be enough.
I also wonder whether "trustbusters" in the USA and elsewhere outside Europe might not also want to jump on the bandwagon and ask for the same terms as whatever settlement is reached in Europe.
Ina Fried at CNET today revealed that there will be no Web browser in any version of Windows 7 that Microsoft provides in European Union countries:
Reacting to antitrust concerns expressed by European regulators, Microsoft plans to offer a version in Europe that has the browser removed. Computer makers would then have the option to add the browser back in, ship another browser or ship multiple browsers, according to a confidential memo that was sent to PC makers and seen by CNET News.
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The browser-less versions, dubbed Windows 7 "E", will be distributed in all members of the European Economic Area as well as Croatia and Switzerland. In addition, Microsoft will strip the browser from the Europe-only "N" versions of Windows 7, which also removes the Windows Media Player from the operating system and is the result of another move by Europe’s antitrust authorities.
Microsoft’s transfer of the Web browser responsibility to the OEMs presumably is the one sure way for them to dodge the continued wrath of the EU bureaucrats although probably not the fines so beloved of the Brussels functionaries. Since OEMs could already add additional browsers to their preloads, it is not too big a leap and hopefully not more onerous that compliance with all the other multitudinous EU bureaucratic requirements. But what about retail box copies?
It’s a little more complicated for consumers who buy a retail copy of Windows 7. Because the operating system lacks a browser, there’s not a direct way to go to Microsoft’s Web site to download one. Microsoft aims to make it as easy as possible for folks in Europe to get the browser, though, and plans to offer it via CD, FTP and retail channels, according to a person a familiar with the situation.
How about side-by-side slots in the retail display and a sign that says, "Buy Windows 7 and Get Internet Explorer 8 Free!"? More seriously, the retail box problem could be a way for the bureaucratic camel to get its nose back into Microsoft’s tent in the guise of "protecting the consumer experience." Still it is probably better for Microsoft than trying to coordinate the shipment of multiple other browser vendors’ code inside Windows 7 distributions with the implicit threat of EU Competition Commissioner Neelie Kroes ringing up her cash register every time Microsoft does not release the latest update of Browser "X" immediately.
There is more detail on the Microsoft rationale from Microsoft’s Dave Heiner (Vice President and Deputy General Counsel) and the gist is that Microsoft wants to ship Windows 7 at the same time in the EU as in the rest of the world and since time was running short, made their own decision about how to ameliorate the browser complaints while the bureaucrats continue to mull it over:
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. Other alternatives have been raised in the Commission proceedings, including possible inclusion in Windows 7 of alternative browsers or a “ballot screen” that would prompt users to choose from a specific set of Web browsers. Important details of these approaches would need to be worked out in coordination with the Commission, since they would have a significant impact on computer manufacturers and Web browser vendors, whose interests may differ. Given the complexity and competing interests, we don’t believe it would be best for us to adopt such an approach unilaterally.
I wouldn’t bet against further EU fine tuning, but waiting for them is standing still so Microsoft seems to have made the best of a bad situation.
Update (June 12, 2009): The EU Competition Commission has now responded to Microsoft’s plan and forgive me while I pat myself on the back for predicting that they would be particularly grumpy over the retail box sales situation:
As for retail sales, which amount to less than 5% of total sales, the Commission had suggested to Microsoft that consumers be provided with a choice of web browsers. Instead Microsoft has apparently decided to supply retail consumers with a version of Windows without a web browser at all. Rather than more choice, Microsoft seems to have chosen to provide less.
They were apparently more positive (in a hedging bureaucratic way) over OEM installations on new PCs, but aside from being obviously chagrined over Microsoft’s preemptory action keep beating the drum of the "anticompetitive effects of Microsoft’s long-standing conduct" so we can be certain that some whopping fines are on the way regardless.
