Browser choice - How a "technical error" cost Microsoft over $700 million

Filed Under: Featured, Google, Internet Explorer, Law & order, Microsoft, Web Browsers

European Union EuroOn Wednesday, the European Commission slapped Microsoft with a €561 million fine ($731m, £484m).

Microsoft was hit by the stiff fine for failing to comply with its commitments to offer Windows users a screen that would allow them to easily choose from a list of web browsers.

The EC brought up the fact that Microsoft failed to roll out the browser choice screen with its Windows 7 Service Pack 1 from May 2011 until July 2012, thereby depriving 15 million Windows users in the European Union from seeing the choice screen.

Browser choice screen

That's not a new discovery, mind you. Microsoft acknowledged last July that the browser choice screen was left off a swath of PCs.

EC competition commissioner Joaquin Almunia said in a statement that the EC's patience has run out:

"Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems. Of course, such decisions require strict compliance. A failure to comply is a very serious infringement that must be sanctioned accordingly."

Sorry, our bad, said Microsoft on Wednesday in a terse statement about the fine:

"We take full responsibility for the technical error that caused this problem and have apologized for it. We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake - or anything similar - in the future."

Microsoft must have used up all its mea culpa juice in the original July 2012 statement it put out about the "technical error."

That earlier statement included an explanation of a technical glitch (a missed delivery of the Browser Choice Screen [BCS] software to PCs that came with the service pack 1 update to Windows 7), steps detailing how the company was going to fix this once and for all, by gum - including hiring outside counsel to investigate how the heck this happened - plus "deep regret."

Web browsers

The fine comes out of a long-running dispute.

It goes back to 2009, when Europe's Competition Commission forced Microsoft to offer its European Internet Explorer users the choice of using a non-IE browser.

As of July 2012, even after getting prodded into action by the Competition Commission, some 28 million PCs still didn't get any choice at all.

Microsoft blamed it on an engineering glitch, but the EC wasn't buying it.

Here's what Joaquín Almunia, Vice President of the Commission in charge of competition policy, had to say about it at the time:

"We take compliance with our decisions very seriously. And I trusted the company's reports were accurate. But it seems that was not the case, so we have immediately taken action. If following our investigation, the infringement is confirmed, Microsoft should expect sanctions."

After users complained that they weren't getting prompted to pick from IE, Chrome, Safari, Opera and Firefox as Microsoft had promised, the European Commission reopened its investigation into antitrust behaviors around browser bundling in Windows.

multiple browsers

According to The New York Times, Wednesday's penalty brings the total fines imposed on Microsoft by European antitrust regulators over the past decade to €2.26 billion ($2.95 billion, £1.95).

Microsoft's failure, for over a year, to offer users a browser choice somehow escaped notice at the EC and at Microsoft.

Emanuela Lecchi, a partner in London at the law firm Watson, Farley & Williams, told the NYT that monitoring companies is time-consuming and resource-intensive, so it's not hard to see how Microsoft was able to "forget about the Internet Explorer commitments without anyone noticing."

Better late than never must be the EC's attitude now - particularly given that the fine serves as proof that the competition commission will take it that far.

The fine will serve as an example for Google, Lecchi pointed out, which has been negotiating with Almunia's office since November 2010 over its dominance of Internet search and advertising markets:

"It would seem to me that the commission may wish to make an example of Microsoft."

Google in February submitted a proposal to get out of its own EC knot.

Details about Google's proposal weren't released, but observers said at the time that a successful settlement, in the eyes of the EC, would have to include specific measures to restore competition.

It will be interesting to see what happens to those negotiations in light of the Microsoft fine.

If you have thoughts on how you think the fine will alter Microsoft's attention to monopolistic tendencies, or to Google's, please leave them in the comments section below.


Browser and European Union images from Shutterstock

, , , ,

You might like

33 Responses to Browser choice - How a "technical error" cost Microsoft over $700 million

  1. Fined 700 million, because approx 15 million users didn't get the choice, that's about $46 each. For Micro$oft that's a very small price to pay to keep people using their browser, especially people who think IE 'is' the internet.

  2. Antish · 508 days ago

    Tyranny of the EU. As if Europeans can't install other browsers later. That will only make Europeans look dumb.

    • J.T.B. · 508 days ago

      Apparently they ARE too stupid to be able to pick on their own...

      ""After users complained that they weren't getting prompted to pick from IE, Chrome, Safari, Opera and Firefox as Microsoft had promised, the European Commission reopened its investigation into antitrust behaviors around browser bundling in Windows.""

      ""Whah! I didn't get to choose something else"" I guess going through the steps to choosing a browser, and then going to download and install it IS too monumental a task for Europeans...

  3. laralove23 · 508 days ago

    Is there something preventing these people from going to the respective websites and downloading the browser of their choice? It's not a difficult task. IE is total crap, but this requirement seems stupid. Go get Comodo Dragon and quit bitching, people.

    • Avid Reader · 508 days ago

      Comodo Dragon?

      The same Comodo which issued "nine certificates for seven domains were issued: mail.google.com, login.live.com, http://www.google.com, login.yahoo.com (three certificates), login.skype.com, addons.mozilla.org, and global trustee."?

      You made my day!

  4. Chortle · 508 days ago

    Why should Microsoft promote choice? If users want to use their software let them learn how to download and install an alternative browser if it matters to them that much. End user, you are a lazy sod!

  5. Larry M · 508 days ago

    The original ruling is senseless. This is not about monopoly or trade. No one makes a penny from the browser (except maybe Opera with their tiny market share). Why did the commission ever get involved in enforcing rules about something given away for free?

    It seems to be some commission members interested in forcing their personal preferences on the populace.

    • Chris · 508 days ago

      Its not something given away. Customers pay for IE when they pay for windows. Its just free to all the other operating systems. ;)

  6. I am not a fanboy of any particular OS, but this doesn't seem fair or reasonable, since vendors of other OSs are not beaten with the same stick - provided that you are able to remove/install browsers of your own choice, which as far as I can tell, most mainstream OSs allow.
    The anti-monoploy argument is complete bunk. Would anyone think it reasonable for Macdonalds to be forced to offer their customers items off a Burger King menu? Forcing a browser choice screen on us just annoys the technically competent, and confuses those who aren't.

  7. Anyone with even a ounce (gram) of common sense knows there are a variety of browsers out there, and will use the one they like best. (I use Chrome and Firefox by choice).

    The only time IE gets used on my PC, is when some company is stupid enough to make their product IE compatible only.

    I don't need M$ to tell me there are other browsers available.

    Stupid European Commission.

  8. Me.Too · 508 days ago

    jeeez... I'm a so called european too, middle europe to be exactly! as my predecessors have already mentioned, that's absolute BS of the terror regime called EU! :/

    and it really depicts european people for beeing too stupid installing an additional browser then IE... *facepalm*

    at least one of those suckers who where crying the loudest for this forced change against M$ are still crawling at the very bottom line! >:P (http://gs.statcounter.com/#browser-eu-monthly-201202-201302)

    meh...!

  9. Always puzzled me why Apple does not have to have a browser choice as well. Mac OSX comes with Safari pre installed after all.

    • Casual · 507 days ago

      Exactly, what happens in this case with Apple. They should be ruled in the same way because the law must be applied to all without preference.

  10. Dan D · 508 days ago

    Has the EC applied the same type of ruling regarding browser choice to operating systems like Mac OS, iOS, and Android? It would seem to me that if they haven't done so that they are singling out Microsoft alone.

    • They ARE singling out Microsoft -- because Microsoft were proved to have gained market dominance in the browser market by leveraging other monopolies using anti-competitive practices. They then failed to follow the steps they agreed to take following this finding.

      Google is currently in the same boat (for search engine and data collection). MacOS, iOS and Android are not in a monopoly or near-monopoly position, so they can't leverage such a monopoly to force browser choice.

      If there was no Android, Apple would be in this situation with iOS IF they used iOS to eliminate competing browsers to the Mobile Safari browser. Since iOS has a healthy competitor in Android, there is choice in the market, and monopoly/anti-competition laws don't take effect.

      • kabigabor · 508 days ago

        So shouldn't EC should open a case againts Apple to do the same with their iTunes player?

      • Nice to finally see a comment from someone who actually knows what this case is about.

        I must say I got depressed from reading the condescending comments about (European) users being stupid. Computer users are not all tech savvy, and as an other comment said, many people think IE *is* the Internet - and that email is sending a Facebook message for that matter.

        Healthy competition is good, and when the first aggrement was made the was genuine competition. Even if the landscape has changed slightly since then, the fine is absolutely fair, and I hope it makes Google think about how *they* act, before it will be neccessary to take similar actions at use.

      • njorl · 507 days ago

        How about fining Apple for promoting Safari for Windows, and then ceasing to support it, thus increasing the attack surface of real-world installations of the main rival to its operating system?

  11. Robyn · 508 days ago

    Maybe they think Europeans are too stupid to google Firefox or whatever and download.

  12. J Whitt · 508 days ago

    I say Microsoft should terminate all licensing to companies within the EU. What a bunch of .........

  13. Chris · 508 days ago

    It isn't monopolistic to include a browser with your own software. If MS really wanted to do something, they could just push out a high priority windows update that installs the BCS. They could make it so this is one of the first updates installed.

  14. Mark · 508 days ago

    Dan D makes a really good point. I don't have a Mac so I am not sure, but I have never heard that Mac's offer you a menu screen of browsers to install - why is the EU singling out Microsoft for this?

    • Because Microsoft was found to have abused its OS position to intentionally kill off Netscape (the dominant browser at the time) by hard-linking IE into its operating system. The issue isn't choice -- the choice was the solution to the previous run-in Microsoft had with the EU. They accepted displaying a browser choice menu as the way to resolve the issue, and then failed to actually do it. The sanction is due to Microsoft saying that they were going to do something to the courts, and then failing to actually do it.

      If Microsoft had not used Windows to force its browser into a predominant position, eliminating the competition, the whole browser choice issue would never have arisen.

      This original issue is now over 10 years old, during which time IE has lost its position as the predominant browser. As such, the agreed-upon settlement no longer makes as much sense -- but Microsoft still failed to follow through on its settlement agreement.

  15. mglass01 · 508 days ago

    But will they actually pay. It's a token figure. MSFT skimmed $732M off another government a few years ago. If they are forced to pay then it's payback. There are those who know...it's funny my Currency Converter stopped working all of a sudden!

  16. Brandon · 508 days ago

    This is quite simply nuts! There is no reason Microsoft should be forced to give an option to download a competitors web browser. Peoples ignorance is their own fault. It's not fair that they are fining Microsoft without legitimate reasons. Also I would like to see the same fine than issued to Mac's Android, etc.

  17. Sum Guy · 507 days ago

    Its funny that Apple and many Linux distros come with only one browser, so why does Microsoft have to be responsible for what OEMs fail to load. The OEM's load the machine with all sorts of CrapWare, they could put in their contract with the oems to install all the browsers and bloat up the machine more. Which sucks.

    I feel this is wrong. I hate explorer, but that is MS's preload. I have the Internet Explorer to find and download FireFox Chrome or what ever I like. That's should be plenty.
    Would it have been better if they just not give us any browser.
    I feel bad for MS considering they helped Apple get back up on their feet about 10 years ago.

  18. meh · 507 days ago

    All of you defending Microsoft must have never done any serious web development. Other people's ignorance *can* affect you too, if there are enough of them. Bundling IE with Windows is exactly how IE came to single handedly hold back web development for close to a decade. It took years upon years of awareness campaigning to get a large enough portion of the web population aware that there are far better browsers available. Any measure to ensure that MS will never again gain browser dominance should be greeted with goddamn joy.

    • Magyver · 488 days ago

      As "Sum Guy " said above you he had the IE to use as a tool to download any browser he wanted.

      Accusing MS of setting back "web development for close to a decade" by providing the IE tool in their computers is a stretch of mammoth proportion.

      By building computers, creating software technology and a browser MS never assumed the role of "the educator of the masses".

      The European Commission is a group of extortionists, nothing more as relates to this subject.

  19. Magyver · 488 days ago

    Future headline: "The European Commission Fines US Car Manufacturers Billions For Nor Providing Choice Of Competitor's Engines".

  20. Dr. Victoria · 467 days ago

    Some of the former respondents seem to have no clue about the core of this topic which is monopolism and how this can be threatening not only to the world economy but to all and everyone even at home. I am glad that there is at least one institution on this planet who is capable and corageous enough of taking action by slapping the hands of monopolists and their venture of hijacking the world for their benefits. So hopefully, world wide companies will consider more carefully from now on how to market their products.

  21. SILEeeles · 459 days ago

    This is just stupid if you ask me.
    A) Windows doesn't stop you installing anyone's browser
    B) if your a pretty confident PC user you will already have a favorite browser and
    C) if people don't want to use your browser, they wont. If they do, they will. Adding the browser choice changes nothing, and its not an update I choose to install either. I've used Firefox for years and I am happy with it, I would imagine most people are in a similar position.

  22. Who Cares · 293 days ago

    European guy talking:

    Typical european "leaders'" stupidity and corruption, creating stupid rules to take care of a half a dozen greedy pockets. This happens every single day in every department... not only software. And it happens because we allow it to happen. The world belongs to the whole people, not only a few. People United cannot be taken over, but for some reason, the people have their eyes closed and keep being slaves of a hand full of greedy bastards. Keep being exploited like if they were some kind of common object.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

About the author

I've been writing about technology, careers, science and health since 1995. I rose to the lofty heights of Executive Editor for eWEEK, popped out with the 2008 crash, joined the freelancer economy, and am still writing for my beloved peeps at places like Sophos's Naked Security, CIO Mag, ComputerWorld, PC Mag, IT Expert Voice, Software Quality Connection, Time, and the US and British editions of HP's Input/Output. I respond to cash and spicy sites, so don't be shy.