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December 16, 2009

EU Drops Microsoft Browser Antitrust Case; Microsoft To Provide Choice Screen Update

Posted by David Hunter at 8:11 AM ET.

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.

  • 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.

  • 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.

Filed under Antitrust, General Business, Governmental Relations, Internet Explorer, Legal, Microsoft

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