Legal Technology News
July 20, 2012
European Commission Opens Antitrust Proceedings against Microsoft to Investigate Possible Non-compliance with Browser Choice Commitments
The European Commission has initiated proceedings against Microsoft in order to investigate whether the company has failed to comply with its 2009 commitments to offer users a choice screen enabling them to easily choose their preferred web browser.
On the basis of information it has received, the Commission said that it believes that Microsoft may have failed to roll out the choice screen with Windows 7 Service Pack 1, which was released in February 2011.
The Commission made this statement despite the fact that, in December 2011, Microsoft indicated in its annual compliance report to the Commission that it was in compliance with its commitments. From February 2011 until today, millions of Windows users in the EU may have not seen the choice screen. Microsoft has recently acknowledged that the choice screen was not displayed during that period.
“We take compliance with our decisions very seriously. And I trusted the company’s reports were accurate. But it seems that was not the case, so we have immediately taken action. If following our investigation, the infringement is confirmed, Microsoft should expect sanctions”, said Joaquín Almunia, Vice President of the Commission in charge of competition policy.
On 16 December 2009, the Commission made legally binding on Microsoft commitments offered by the US software company to address competition concerns the Commission had identified. These concerns related to the tying of Microsoft’s web browser, Internet Explorer, to its dominant client PC operating system, Windows. Specifically, Microsoft committed to make available for five years (i.e. until 2014) in the European Economic Area a “Choice Screen” enabling users of Windows to choose in an informed and unbiased manner which web browser(s) they wanted to install in addition to, or instead of, Microsoft’s web browser. The choice screen was provided as of March 2010 to European Windows users who have Internet Explorer set as their default web browser.
The Commission will now investigate whether Microsoft has failed to comply with its commitments, in particular the commitment to provide a browser choice screen to Windows 7 users.
The opening of proceedings does not prejudge the outcome of the investigation; it only means that the Commission will treat the case as a matter of priority.
Background on the commitments decision
The December 2009 commitment decision followed a Statement of Objections sent to Microsoft in January 2009 outlining the Commission’s preliminary view that the company abused its dominant position in the market for client PC operating systems through the tying of Internet Explorer to Windows.
The decision, adopted pursuant to Article 9 of Regulation 1/2003 on the implementation of EU antitrust rules, did not conclude whether there was an abuse of a dominant position in the sense of Article 102 of the TFEU, but made the commitments legally binding on Microsoft.
If it is found that a company has breached legally binding commitments, it may be fined up to 10% of its total annual turnover.
Background on other antitrust proceedings involving Microsoft
In 2004 the Commission adopted a decision requiring Microsoft to disclose complete and accurate interoperability information to developers of work group server operating systems (file, print and network servers) on reasonable terms so that they could interoperate with Microsoft’s dominant PC operating system Windows. The decision also found that the tying of the Windows Media Player to the Windows operating system was an abuse of a dominant position. The Commission imposed a fine of EUR 497 million.
In July 2006 the Commission imposed on Microsoft a first penalty payment of EUR 280.5 million for non-compliance with its obligations under the 2004 decision concerning the completeness and accuracy of the interoperability information.
This was the first time that the Commission had ever imposed a penalty payment for non-compliance.
In 2008 the Commission imposed on Microsoft a second penalty payment of €899 million, for non-compliance with its obligations under the 2004 decision concerning the level of royalties for this interoperability information. On 27 June 2012 the General Court upheld this Commission decision. It however reduced the penalty payment to EUR 860 million (case T-167/08 Microsoft v Commission).
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