The interaction between Microsoft’s browser and its operating system has been a subject of interest by monopoly watchers almost since the Web began. Now, that interest has resulted in a whopping US$ 731 million (€561 million) fine by the European Commission (EC), a decision which the technology giant has said it is “highly unlikely” to appeal.
In a statement released earlier this week, the EC said the fine resulted from Microsoft’s failure “to comply with its commitments to offer users a browser choice screen” so that they could choose their Web browser. Microsoft has said its failure to offer a browser choice, as it had agreed to do, was the result of “a technical error.”
Could Have Been Worse
As huge as the fine is, it could have been much worse. The European Commission could have imposed a fine equal to 10 percent of the company’s annual revenue — which, based on the company’s 2012 performance, could have meant a fine of roughly US$ 7.3 billion. Microsoft has already borne several billion dollars in fines from the EC for other violations.
The agency said that it made this requirement for a browser choice screen legally binding in 2009, effective through 2014, but that the company “failed to roll out the browser choice screen with its Windows 7 Service Pack 1” update that was issued from mid-2011 to mid-2012. This Windows 7 update was activated by European users 28 million times during that period.
In response, Microsoft said it takes “full responsibility for the technical error that caused this problem.” It said it has apologized, provided the Commission with a “complete and candid assessment of the situation” and taken steps to develop processes that will “help avoid this mistake — or anything similar — in the future.”
The EC’s order was due to what it described as “a suspected abuse of dominant position” by the company. The agency’s investigation into this suspected abuse had been closed because of commitments that Microsoft made to offer this choice screen through 2014 in Europe.
The agency said this fine was the first it had imposed because a company had failed to comply with a commitment. Although Microsoft said it will not appeal this final ruling, it has attempted in the past to get other fines from the European Commission dismissed.
In addition to this newest huge fine, Microsoft also has to deal with another blow. Although Windows is still the dominant operating system in Europe, IE is now in third place among browsers in Europe, with Chrome and Firefox in first and second.
Image courtesy of ronstik (Shutterstock)