The EC's latest objection: Is it time to unbundle IE from Windows?

For many, it's a very tired, old argument; but for politicians in Europe, it remains a rallying cry: Microsoft, says the European Commission, is using its Web browser unfairly.

At the height of the Microsoft / Netscape browser war a decade (or was it a century?) ago, Microsoft argued that so much of Windows' functionality relied upon the HTML rendering capability of Internet Explorer that it would be technically impossible to divorce the two from one another. That argument was raised in response to objections from lawmakers and judges worldwide, including in the US, that bundling IE with Windows gave Microsoft an unfair advantage -- and at the time, many saw that claim as somewhat self-serving and artificial.

Nevertheless, it worked. Up until now, the company has never been forced to offer Windows customers an alternative to installing Internet Explorer by default.

But last Thursday, according to a statement over the weekend, the European Commission sent Microsoft a new formal Statement of Objections, which raised the whole bundling issue once again. Though the exact content of such statements are always kept private, last Saturday's press message from the EC -- attributed to spokesperson Jonathan Todd -- said that the Thursday statement alleged that the bundling "distorts competition on the merits between competing Web browsers insofar as it provides Internet Explorer with an artificial distribution advantage which other web browsers are unable to match.

"The Commission is concerned that through the tying, Microsoft shields Internet Explorer from head to head competition with other browsers which is detrimental to the pace of product innovation and to the quality of products which consumers ultimately obtain," the EC's press bulletin continued. "In addition, the Commission is concerned that the ubiquity of Internet Explorer creates artificial incentives for content providers and software developers to design websites or software primarily for Internet Explorer which ultimately risks undermining competition and innovation in the provision of services to consumers."

Once again, the Commission is threatening fines and regulatory intervention should Microsoft be unable to sufficiently explain itself within the next eight weeks -- which is the grace period it's giving the company to present an oral defense.

Microsoft's response to the Commission essentially acknowledges having received the Statement, as well as its opportunity to present a response. But it also adds this one tidbit about the contents of the Statement that the EC's bulletin omitted: "According to the Statement of Objections, other browsers are foreclosed from competing because Windows includes Internet Explorer. The Statement of Objections states that the remedies put in place by the US courts in 2002 following antitrust proceedings in Washington, DC do not make the inclusion of Internet Explorer in Windows lawful under European Union law."

If Microsoft's characterization is accurate, this may mean that the EC is planning to penalize Microsoft for its allegation that the US government's settlement with the company did not go far enough.

With Microsoft having instituted far more transparent and open corporate policies since 2002, and with its having been seen as embracing the concept of standards to the point where its position in driving their creation has come under scrutiny, the question arises of whether the Internet Explorer Web browser functionality -- just the front end, not necessarily the rendering engine that other Windows components rely on -- truly has to be included in Windows by default. Conceivably, the company could -- starting, say, with Windows 7 -- offer consumers links to alternatives such as Firefox and Opera (which, some believe, may have prompted the EC to file its latest Statement against Microsoft).

But the company could also argue in US courts that being forced to offer such a choice is itself unfair, under the logic that neither product is being offered commercially. Under US law, had Opera raised a similar complaint, it may have been compelled to estimate how much sales Opera loses on account of Microsoft's bundling practices. Since Opera's principal PC browser isn't sold, such an account may be difficult to ascertain.

There's also the argument that Opera may be hurt by far more competition-related factors than just IE's alleged "ubiquity." The latest NetApplications estimate of browser usage share, based on HTTP requests processes by sites which that firm tracks, state that over 21% of the world's requests are being sent from Firefox browsers, with almost 8% now coming from some flavor of Apple's Safari, whether it's on Mac, iPhone, or Windows. That is not to say that one in five browser users are on Firefox, but rather that a fifth of HTTP traffic appears to come from Firefox.

Less than 1% of traffic comes from Opera browsers, which remains less than Google's current Chrome browser -- which is far from ubiquitous.