Microsoft facing 'severe' punishment for EU antitrust breach
by Dean Carroll
17 July 2012
Microsoft will be subject to a new investigation by the European Commission following accusations that the company failed to meet its 2009 commitment to offer software users a choice of web browsers. The American firm had agreed to flag up other alternative browsers to Internet Explorer - like Chrome, and Firefox - in a "choice screen" that was supposed to appear on the computers of customers. Microsoft blamed technical errors for its failure to comply with commission rules. In a statement, the company admitted that it had "fallen short".
It emerged that the browser choice screen had been unavailable since February 2011, and it was estimated that 28 million customers would have been given the extra options in that time period - had the company delivered on its commitment. Microsoft was previously fined €1.64bn by the commission for failing to comply with antitrust laws. And the commission warned that the punishment for the breach would be "severe". Before the 2009 agreement was made, a fine of 10 per cent of global turnover was discussed by officials.
European Competition Commissioner Joaquin Almunia said: "We are now opening formal proceedings against the company. If following our investigation, this breach is confirmed – and Microsoft seems to acknowledge the facts here – this could have severe consequences. Needless to say, we take compliance with our decision very seriously. If the infringement is confirmed, there will be sanctions."
The commissioner also revealed that the regulator had been "alerted by other market players about the possible breach" and suggested that the commission would tighten up its surveillance on Microsoft and other companies, adding: "I will also take additional steps to better monitor the implementation of commitments made legally binding in other antitrust cases."
The company claimed that computers with the original version of Windows 7, Windows XP and Windows Vista did include the browser choice – but updated versions did not include the option due to "technical error". However the company was fully aware of the fact that the commission laws were due to runs until 2014. Microsoft even submitted a report in December to commission officials, claiming that the choice was still being offered to consumers. A spokesman for Microsoft said: "While we have taken immediate steps to remedy this problem, we deeply regret that this error occurred and we apologise for it."
It emerged that the browser choice screen had been unavailable since February 2011, and it was estimated that 28 million customers would have been given the extra options in that time period - had the company delivered on its commitment. Microsoft was previously fined €1.64bn by the commission for failing to comply with antitrust laws. And the commission warned that the punishment for the breach would be "severe". Before the 2009 agreement was made, a fine of 10 per cent of global turnover was discussed by officials.
European Competition Commissioner Joaquin Almunia said: "We are now opening formal proceedings against the company. If following our investigation, this breach is confirmed – and Microsoft seems to acknowledge the facts here – this could have severe consequences. Needless to say, we take compliance with our decision very seriously. If the infringement is confirmed, there will be sanctions."
The commissioner also revealed that the regulator had been "alerted by other market players about the possible breach" and suggested that the commission would tighten up its surveillance on Microsoft and other companies, adding: "I will also take additional steps to better monitor the implementation of commitments made legally binding in other antitrust cases."
The company claimed that computers with the original version of Windows 7, Windows XP and Windows Vista did include the browser choice – but updated versions did not include the option due to "technical error". However the company was fully aware of the fact that the commission laws were due to runs until 2014. Microsoft even submitted a report in December to commission officials, claiming that the choice was still being offered to consumers. A spokesman for Microsoft said: "While we have taken immediate steps to remedy this problem, we deeply regret that this error occurred and we apologise for it."
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