EU Warns Microsoft on Antitrust Issue

Microsoft Corp. was warned by European Union regulators to change how it shows Internet Explorer in its new Windows 8 operating system to avert another antitrust clash, Competition Commissioner Joaquin Almunia said.

Microsoft, which starts selling Windows 8 in two days, was sent formal EU's antitrust objections today over its failure to comply with a settlement of an earlier probe that required it to display a choice of other web browsers.

“We have raised issues with Microsoft relating to Windows 8,” Almunia told reporters in Brussels today. “If a user decides to set a rival browser as a default browser, there should not be an unnecessary warning in Windows or confirmations by the user and the Internet Explorer icon should also be unpinned from the Start screen. We expect Microsoft to address these issues.”

Microsoft has already been fined 1.68 billion euros ($2.17 billion) in EU antitrust probes, including an 899 million-euro penalty for failing to obey an order to share data with competitors. The Redmond, Washington-based company agreed in 2009 to offer access to rival browsers as a part of a settlement to repair its relationship with the bloc's regulators. It told regulators last December that it was complying with its commitments.

Today's statement of objections is a step toward possible fines over Microsoft's failure to comply with its pledge to display a choice of web browsers to users beyond its own Internet Explorer program.

Robin Koch, a spokesman for Microsoft in Brussels, declined to immediately comment on Almunia's comments on Windows 8. The company takes the statement of objections listing the EU's antitrust concerns over compliance with the settlement “very seriously,” he said.

The EU antitrust chief said he'd contacted Microsoft about Windows 8 and told management “at the highest level possible what are my concerns and what kind of presentation should be avoided if they don't want to take the risk of new investigations.”

Almunia said in July that Microsoft may have misled regulators by failing to display a browser choice screen to users of the Windows operating system since February 2011. The company blamed a technical error for not showing the screen to some users and offered to extend until March 2016 a commitment to show it.

Bloomberg News

Technical Error

Microsoft is strengthening its internal procedures to help prevent a repeat of the technical error, Koch said in an e-mailed statement. The company “will continue to cooperate fully with the commission.”

The company said in July it only learned that month that it didn't offer its browser choice software to some 28 million computers running Windows 7 Service Pack 1, or 10 percent of the computers that should have received it. It distributed a software fix to computers that were affected.

Under the terms of Microsoft's 2009 pledge, consumers who buy personal computers were given a choice of the 12 most widely used browsers to install in addition to, or instead of, Microsoft's Internet Explorer.

The EU can fine companies as much as 10 percent of yearly revenue if they “breached commitments made legally binding,” according to its statement.

Any fines for Microsoft may take into account repeat offenses, Almunia said in July in a reference to the EU's 2008 penalty for the company's failure to obey an earlier EU decision. That ruling also ordered it to provide information to software developers to make compatible products.

Almunia said there were “no grounds” for EU officials to intervene on Microsoft's Windows RT software for tablets. The software, to be introduced on Oct. 26, prohibits any browser except for Internet Explorer, according to a May blog post by Mozilla Corp., maker of the rival Firefox browser.

Companies have raised “various issues about other aspects of Microsoft's compliance” that regulators had examined and didn't see any reason to pursue, Almunia said. “We will remain vigilant and we will continue to monitor all aspects of Microsoft's compliance with the commitments in the future.”

Bloomberg News

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