European Union regulators said Wednesday that Microsoft can go ahead and start using its latest proposed "ballot screen," which will let new users of Windows choose which browser--or browsers--they wish to use.
The decision to let Microsoft "market test" the latest version would seem to mark the wrapping up of the latest antitrust skirmish with Brussels.
More than a decade after Microsoft first started including a browser with Windows, regulators said earlier this year that they had reached the preliminary view that such an inclusion violated European antitrust law.
In response, Microsoft initially said it would ship Windows 7 in Europe without a browser at all, seemingly challenging the logic of the decision by the European Commission, the executive arm of the EU. However, amid indications that such a move would not fly, Microsoft in July offered a proposal that more closely matched what regulators and competitors wanted--a ballot screen that lets users choose which browser or browsers they wish to install.
Since then Microsoft, regulators, and competitors have been going back and forth about how that screen would look and operate.
"The improvements that Microsoft has made to its proposal since July would ensure that consumers could make a free and fully informed choice of web browser," Europe's antitrust authority said in a statement. Among the changes since Microsoft's July proposal is the agreement by Microsoft to add more information before users select a browser. Microsoft will now first present users with a screen explaining what a browser is and will then offer "Tell me more" buttons for each browser.
Under the revised proposal, Microsoft would, through Windows Update, make available for five years in the European Economic Area a screen allowing users of Windows XP, Windows Vista, and Windows 7 to choose which Web browsers they want to install. PC makers will also be able to install competing Web browsers and, if they choose, set those as the default browser and disable Microsoft's Internet Explorer.
"The Commission's preliminary view is that Microsoft's commitments would address these competition concerns and is market testing Microsoft's proposal in light of these requirements," The EC said in its statement.
For its part, Microsoft said it welcomed the European Commission's decision.
"For Microsoft, today's decision is a significant step toward closing a decade-long chapter of competition law concerns in Europe," general counsel Brad Smith said in a statement.
Update: Smith also spoke to CNET about the deal and its potential impact on others in the industry. Click here to read that interview.
Microsoft met a deadline this week to respond to European Commission charges that its inclusion of a browser in Windows violates antitrust laws there.
In January, the European authorities filed a new complaint with a preliminary finding that Microsoft had broken the law by bundling a browser into Windows.
Microsoft's response was not made public and the company did not offer a comment, but it's fair to say the company disagrees with the finding.
The stakes are high. In addition to potential fines, Microsoft has noted in regulatory filings that European authorities may seek to force Microsoft to include rival browsers with Windows as well as forcing the company to disable parts of Internet Explorer for users who select a different browser.
In other Microsoft news, the company has hired Cyrus Krohn as director of online services programming, a new position reporting to MSN executive producer Scott Moore. He will start on May 4, Microsoft said.
Most recently, Krohn served as director of the eCampaign division for the Republican National Committee and was at Yahoo from 2005 to 2007. Krohn also worked at Microsoft from 1996 to 2005 in various capacities, including as publisher of the online magazine Slate.
Meanwhile, as noted by CNET colleague Jessica Dolcourt, Microsoft has started talking about a new version of its Tellme program for Windows Mobile. Microsoft is counting on Tellme's voice technology to help make its upcoming release of Windows Mobile 6.5 a more compelling experience.
The software is available now for phone makers to start including in their devices and will be available this fall for consumers to download.
The European Union is considering forcing Microsoft to distribute rival browsers as part of Windows, the software maker disclosed in a regulatory filing this week.
As part of its quarterly filing with the Securities and Exchange Commission filed on Thursday, the software maker offered more details on the EU's statement last week that it believes Microsoft's inclusion of a browser in Windows violates antitrust law.
Microsoft said that the EU is considering forcing computer makers, known as original equipment manufacturers, or OEMs, to offer multiple browsers with new Windows PCs.
"While computer users and OEMs are already free to run any Web browsing software on Windows, the commission is considering ordering Microsoft and OEMs to obligate users to choose a particular browser when setting up a new PC," Microsoft said in the SEC filing. "Such a remedy might include a requirement that OEMs distribute multiple browsers on new Windows-based PCs. We may also be required to disable certain unspecified Internet Explorer software code if a user chooses a competing browser."
Microsoft also noted that the EU is also seeking to "impose a significant fine based on sales of Windows operating systems in the European Union."
The company reiterated that it will have the opportunity to respond in writing in the next two months and, after that, could also request a hearing.
And that's not the only area where Microsoft faces further EU action. Microsoft confirmed that an investigation into Office may still be ongoing.
"In January 2008, the commission opened an additional competition law investigation that relates primarily to interoperability with respect to our Microsoft Office family of products," Microsoft said. "This investigation resulted from complaints filed with the commission by a trade association of Microsoft's competitors."
The European Union's new complaint against Microsoft really takes one back. Like, a decade or so.
Its objection--that bundling a browser into the operating system violates antitrust law--is the same one that U.S. regulators raised in 1996.
The newest allegations stem from a 2007 complaint by Norway's Opera that Microsoft was hurting competition by including Internet Explorer in Windows and by not better adhering to Web standards.
What is most odd about the EU taking up the issue is its timing. The EU spent years going after Microsoft on antitrust matters related specifically to its bundling of products with Windows and didn't focus on the browser. Plus, the move comes as Microsoft's browser share is at its lowest point since the Netscape days.
Firefox is particularly strong in Europe, the area over which the EU has oversight. According to XitiMonitor, IE had a 59.5 percent share in Europe as of November, compared with 31.1 percent for Firefox. Opera had about 5 percent, and Safari half of that. Microsoft lost a full 5 percentage points of market share since April alone.
That doesn't mean that Microsoft will have an easy time in Brussels. As it has shown in the past, the EU is willing to take a tough line with Microsoft, and it is not averse to fining the company and issuing harsh decrees.
David Anderson, an antitrust attorney and partner with Berwin Leighton Paisner in Brussels, said that Microsoft may well face a challenge ahead in persuading the Commission to set aside its preliminary assessment, saying the commission tends to review matters thoroughly before issuing such "statements of objections."
Further he noted that the commission staff may feel emboldened after having won its previous case against Microsoft. It also has the same set of attorneys that worked on that case pursuing the IE issue, Anderson said.
Microsoft is choosing its words carefully at this point, electing not to go beyond a statement that is more procedural than confrontational. But I can only imagine the words being used behind closed doors in Redmond.
In defending itself, Microsoft will find itself against one particularly familiar foe. Opera's chairman, William Raduchel, is a longtime Microsoft critic, dating back to his time at Sun Microsystems, which brought antitrust actions of its own against Microsoft before eventually settling.
For those who need a refresher course in the browser wars, Netscape had the dominant program in the Web's early days, controlling more than half the market as late as 1997. By 1999, though, Microsoft's IE had more than three-fourths of the market.
It has held the dominant position ever since, accounting for greater than 90 percent of the market through 2004, when Firefox began to make serious inroads. Its share has been on the decline since, according to Net Applications.
Microsoft's browser had an 87 percent share in 2005, but by 2007, its share had dropped to 79 percent. Last year alone, IE's market share dropped from 75 percent in January to 68 percent by December.
CNET News' Dawn Kawamoto contributed to this report.
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