The European Commission has dropped its competition law case against Microsoft over its browser software and accepted the company's solution of offering Microsoft Windows users a screen through which they can choose non-Microsoft browsers.
In January of last year the Commission launched a case which argued that Microsoft's 'tying' of its Internet Explorer web browser to its near-universally used Windows operating system was a breach of EU anti-trust rules.
The case was launched in the aftermath of a European court ruling which backed a similar previous investigation and ruling by the Commission.
In September 2007 the EU's Court of First Instance (CFI) backed a 2004 fine levied on Microsoft which was partly for the bundling of media player software with Windows.
In January 2008 the Commission used that ruling to act on a complaint it had received about Microsoft's inclusion of its Explorer browser in Windows.
"As for the tying of separate software products, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies," said a Commission statement at the time. "The Commission's investigation will … focus on allegations that a range of products have been unlawfully tied to sales of Microsoft's dominant operating system."
The Commission made a preliminary ruling that Microsoft broke EU competition rules by tying its browser to its operating system in January of this year.
Microsoft later offered to create a 'ballot screen' that would be shown to owners the first time they used a Windows computer that would offer them the opportunity to set a Microsoft browser or one from another company as the default web-browsing software.
The Commission has now formally accepted that proposal, which makes Microsoft's commitments legally binding, it said. It has informally accepted Microsoft's commitments to improve interoperability, another issue on which it had launched an investigation.
"Today is an important day for internet users in Europe," said EU Competition Commissioner Neelie Kroes. "Today, the Commission has resolved a serious competition concern in a key market for the development of the internet, namely the market for web browsers."
"Now - for the first time in over a decade - internet users in Europe will have an effective and unbiased choice between Microsoft’s Internet Explorer and competing web browsers, such as Mozilla Firefox, Google Chrome, Apple Safari and Opera," she said. "More than 100 million European computer users stand to benefit from the Commission's decision today. An even higher number will benefit over the five year lifetime of the commitments made binding on Microsoft with today's decision."
From mid-March 2010 Microsoft will show users a ballot screen that offers a choice of the 12 most popular browsers in the EU, Kroes said.
"Membership of this list will be determined by usage share in the European Economic Area. Users will be able to choose to download as many of the browsers as they like. Or they can stick with Microsoft's web browser," she said. "In addition, computer manufacturers and users will be able to turn Microsoft's web browser off, and set other browsers as the default browser. In other words – whichever way you look at it, Microsoft will have to earn clients for its web browser."
The Commission carried out market testing of Microsoft's proposal and insisted on changes to it before giving their full approval.
"The new design minimises any risk of bias in favour of Microsoft's web browser," said Kroes. "First, it will be presented in a neutralised window (not a full Internet Explorer window). Secondly, the browsers will be presented in random order."
"Finally – and this is very important – Microsoft will within six months, and then annually, report to the Commission on its implementation of the commitments. Subject to certain conditions, Microsoft is obliged to make adjustments to the implementation of the choice screen upon the Commission's request," she said.
The other issue being investigated by the Commission was the interoperability of Windows. The Commission had concerns that Microsoft was not making it easy enough for other companies to ensure that their software and hardware worked with the market-dominating Windows system.
Kroes said that the Commission had informally accepted Microsoft commitments to allow interoperability between third party products and Microsoft software.
"While these arrangements remain informal vis-à-vis the Commission, the package includes warranties that Microsoft will offer to third parties and these can, in turn, be privately enforced," she said.