Microsoft fined €561m for limiting browser choice

European Union (EU) competition commissioner Joaquin Almunia gestures during a news conference at the EU Commission headquarters in Brussels yesterday. The EU has fined Microsoft for failing to offer consumers a choice of web browser.  Photograph: Reuters

European Union (EU) competition commissioner Joaquin Almunia gestures during a news conference at the EU Commission headquarters in Brussels yesterday. The EU has fined Microsoft for failing to offer consumers a choice of web browser. Photograph: Reuters

Thu, Mar 7, 2013, 00:00

Shares in Microsoft dropped yesterday after the European Commission imposed a €561 million fine on the company for failing to implement a previous ruling obliging it to offer users a choice of internet browsers.

It is the first time the commission has been forced to fine a company for non-compliance with agreed commitments. In 2009 a European antitrust investigation found that Microsoft was unfairly tying its internet Explorer browser to its Windows operating system, and ruled that the company must give users a choice of which internet browsers to use.

Last July it emerged that during a 14-month period between May 2011 and July 2012, Microsoft had failed to roll out the browser choice screen with some of its Windows 7 packs. As a result, some 15 million Windows users in the European Union were not presented with a required choice screen during this period, the commission found.

‘Technical error’

Microsoft said it took “full responsibility for the technical error that caused this problem” and has taken steps to strengthen its software development and other processes to avoid similar mistakes in the future.

Announcing the sanction yesterday in Brussels, competition commissioner Joaquín Almunia said the aim of the fine was to “punish the company that has been responsible for the breach of the agreement, and to deter companies that can be tempted to follow this path”.

The €561 million fine represents 1 per cent of Microsoft’s turnover, although the commission technically had the power to levy a fine of up to 10 per cent of revenue.

Co-operation

Mr Almunia said the commission had taken a number of factors into consideration when deciding on the fine, including the fact that Microsoft had co-operated with the investigation.

“We took into account the duration of the infringement, the gravity of the infringement and the degree of co-operation we have received from Microsoft once we informed them. This cooperation led us to this figure of 561 million.”

Asked why neither the Commission or a competitor had discovered the problem for more than a year, Mr Almunia said the Commission had “trusted” the compliance reports from Microsoft.