Europe gets off Microsoft's back -- ends browser antitrust case

Microsoft's Web brower antitrust troubles in Europe are essentially over. Starting in mid-March, European Windows users will have option to choose the default Web browser. Microsoft also will embark on a new interoperability initiative.

In a press conference today, the European Union's chief antitrust enforcer, Neelie Kroes, described the situation she sees about browser choice: "It is as if you went to the supermarket and they only offered you one brand of shampoo on the shelf, and all the other choices are hidden out the back, and not everyone knows about them. What we are saying today is that all the brands should be on the shelf."

In a statement, Brad Smith, Microsoft's general counsel, said, "We are pleased with today's decision by the European Commission, which approves a final resolution of several longstanding competition law issues in Europe."

Besides a "Choice Screen" for browsers, "Microsoft has committed to allow interoperability between third party products and several important Microsoft products. These products include Windows, Windows Server, Office, Exchange, and SharePoint," Kroes said.

Inclusion of Office, Exchange and SharePoint goes beyond interoperability disclosure commitments required in the United States. "We believe it represents the most comprehensive commitment to the promotion of interoperability in the history of the software industry," Smith asserted.

For years, I've heard Microsoft employees quietly talk about the "European Drama," which to them seemed to be unending and unresolvable. They gave sense of persecution, that somehow Microsoft was singled out for being a successful American company. The European Union Competition Commission's case against Intel shows that Microsoft isn't alone, but doesn't end questions about Americanism being a crime on the Continent.

That said, today the U.S. Federal Trade Commission formerly charged Intel for abusing its dominant position in microprocessors. As I warned last week, the Obama Administration plans to step up enforcement of major tech companies, including Google and Intel. As Intel's troubles begin, Microsoft's come to a likely end, putting the company in a better position to compete in the coming decade than it did in this one. The quality and timing of Microsoft releasing interoperability information could yet affect another open issue in Europe.

"The Commission will carefully monitor the impact of Microsoft's proposals on the market and take its findings into account in its assessment of the pending antitrust investigation regarding interoperability," Kroes said today.

Beginning and End

Microsoft started the new century with an adverse ruling in the U.S. antitrust case filed in May 1998. In summer 2000, U.S. District Judge Thomas Penfield Jackson ordered Microsoft broken into two companies. One appeal and a change of judges and administrations in Washington later, Microsoft settled the case in November 2001. The new judge approved the settlement in November 2002. Microsoft is now under its second extension of government oversight, which concludes in 2011.

The European Commission took about five years in its initial investigation to reach a ruling against Microsoft, in March 2004. The EC found that Microsoft had illegally bundled or "tied" its media player to Windows and used its dominance in desktop operating systems to get an unfair position in the market for workgroup servers. The European Commission fined Microsoft $612 million, ordered the company to release a version of Windows without the media player and demanded publication of interoperability information for third parties. Microsoft appealed the decision, but lost in September 2007.

Throughout the appeals process, EC and Microsoft relations were strained at best. Microsoft's initial naming for the separate Windows version and scant release of interoperability information led to European Commission rebukes and additional fines. Microsoft finally acquiesced to European oversight in November 2007.

But rather than end the drama, new acts followed. In January 2008, the EC announced that it had launched a new antitrust investigation, into Web browser bundling, and yet another investigation started, too. In January 2009, the EC signaled its adverse ruling against Microsoft would be shortly coming. In June Microsoft proposed offering yet another version of Windows in Europe. Today's agreement means that Microsoft will offer the aforementioned Choice Screen of browsers to European Windows users.

"The Choice Screen will be provided to those European Windows users (currently more than 100 million) who have Microsoft's web browser Internet Explorer set as their default Web browser," according to the European Commission's FAQ. The Choice Screen will be available for five years.

"The Commission's aim is to ensure that Microsoft does not abuse its dominant position on the PC operating system market and so distort competition on the web browser market," the FAQ further explains. "This is part of the Commission's commitment to consumers where we help to make markets work better -- delivering more choices, innovation and quality."