EU Competition Commissioner Neelie Kroes announced on Wednesday (7 October) the "satisfactory resolution to an important competition case". The European Commission announced it will formally market test proposals made by Microsoft to resolve a nine-month antitrust row on the tying of its Internet Explorer browser to the Windows PC operating system.
"For Microsoft, today's decision is a significant step toward closing a decade-long chapter of competition law concerns in Europe," said Brad Smith, Microsoft's general counsel, welcoming the Commission's decision.
Other popular browsers such as Google's Chrome, Mozilla's Firefox and Opera filed complaints to the European Commission in January arguing that bundling Internet Explorer to Windows would afford Microsoft a 90% share of the browser market on PCs worldwide. The rival browsers argued they would be unable to match such a distribution advantage (EurActiv 12/06/09).
A choice screen
The new proposal will provide consumers of Windows XP, Windows Vista and Windows 7 with five browser options on the European market. As part of the installation process, users will be able to choose from market leaders Safari, Google, Mozilla Firefox, Opera Software and Internet Explorer 8 on a 'choice screen'. An informative 'Tell Me More' tab underneath each option will allow consumers to look at the features of each browser before making their choice.
The proposal provides scope for the 12 most widely-used web browsers, whose inclusion in the choice screen will depend on their market share in Europe. The options will be listed in alphabetical order, putting Explorer last, and the chosen default browser will also have pride of place on the Windows 7 taskbar, according to a statement by Microsoft.
In theory this approach would allow newcomers room to compete for a slot on the choice screen. However there is speculation that the Windows package of five will tip the balance in their favour and make it difficult for newcomers to compete.
"We are very satisfied with the EU decision to now give consumers a larger choice of browsers that increases competition," said Andreas Geiger, representing Flock, an emerging browser with very little market share in Europe. "But it is important to have innovation as a criterion for the ballot screen and not just market share."
EU: 1 - Microsoft: 0
This proposal still represents a significant capitulation by Microsoft to EU competition policy because in practice it will mean that users and PC manufacturers can install competing browsers, set them as default options and even disable Internet Explorer. Additionally, Microsoft would also be "prohibited from circumventing free and effective browser choice by other means," according to Kroes.
The Microsoft commitment, which will run for five years, reportedly includes a clause allowing the Commission to revisit the terms of the agreement in the future if it no longer reflects "a genuine choice" between market trends.
The software firm had been in discussions with the EU's competition authorities for the last month trying to find a solution to antitrust charges made by rival browsers. Original proposals from the company in July were sent back for improvements.
A formal market test of the proposal is due to commence on Friday (9 October). The Commission invites feedback from consumers to software companies on the Microsoft proposal. Following the test, the Commission can decide to adopt a decision to make the proposal legally binding.
Interoperability
Microsoft also made a second concession to the Commission today (7 October). The company has improved upon an earlier bid on interoperability, a buzzword for different operating systems and applications that can work together. The interoperability between third party products such as Windows, Windows Server, Office, Exchange and SharePoint would be enhanced, according to the revised proposal.
"This represents the single biggest legal commitment in the history of the software industry to promote interoperability," said Microsoft's Smith. The commitment would allow developers throughout the industry, including in the open source community, access to codes to assist them in building products that are compatible with Microsoft products.
