European Commission Hits Microsoft With $732M Fine

The European Commission ruled that Microsoft failed to roll out a browser choice screen in its Windows 7 Service Pack 1 from May 2011 until July 2012, a period in which 15 million Windows users in the European Union should have had a browser choice, the European Commission said. In 2009, the European Commission had laid out legally binding commitments to Microsoft for providing users with easy steps to choose their own preferred Web browser.

"In 2009, we closed our investigation about a suspected abuse of dominant position by Microsoft due to the tying of Internet Explorer to Windows by accepting commitments offered by the company. 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," said Joaquín Almunia, European Commission vice president in charge of competition policy.

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Microsoft offered the commitments to the European Union to address concerns regarding the integration of its Internet Explorer browser into the Windows operating system, according to the European Commission. Microsoft added the choice screen in March 2010 and, by November 2010, more than 84 million browsers had been downloaded, according to the European Commission.

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But a failure to comply was documented again in July 2012 and the European Commission notified Microsoft of its formal objections last October. Microsoft admitted in July that it had failed to comply with the European Commission's guidelines.

Microsoft said in July that the browser choice screen was delivered to initial users of Windows 7, as well as XP and Vista, but it disappeared after Windows 7 Service Pack 1 was released. Microsoft said a "technical error" was to blame for the failure to include it in the Service Pack 1 release.

The 2009 binding agreement that Microsoft and the European Commission had signed had ended a decade-long dispute between the two organizations, but the latest noncompliance by Microsoft eventually led to the European Commission's decision.

"This is the first time that the Commission has had to fine a company for noncompliance with a commitments decision. In the calculation of the fine the Commission took into account the gravity and duration of the infringement, the need to ensure a deterrent effect of the fine and, as a mitigating circumstance, the fact that Microsoft has cooperated with the Commission and provided information which helped the Commission to investigate the matter efficiently," the European Commission wrote in a statement.

In a statement released Wednesday, Microsoft, Redmond, Wash., again blamed a "technical error" for failing to comply with the agreement.

"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," the company said in the statement.