Microsoft and EU Settle Browser Case

Microsoft Corp. (MSFT) ended more than a decade of antitrust disputes with the European Union by giving consumers a choice among Web browsers.

Microsoft's Windows operating system will include a screen that gives users the option of using rival browsers. The so- called choice screen, available by mid-March, lets users turn off Microsoft's Internet Explorer and install an alternative.

"I hope that today's decision closes a long chapter in Microsoft's sometimes uneasy relationship with the commission," said Competition Commissioner Neelie Kroes at a press conference in Brussels today.

The accord eliminates the possibility of Microsoft having to pay a large fine and means the company can increase focus on a shrinking market share in Europe. Mozilla Corp.'s Firefox overtook Internet Explorer as the most popular browser in Germany, according to a study by Fittkau and Maass this month. Microsoft was fined 1.68 billion euros ($2.46 billion) in previous EU antitrust probes.

Consumers who buy personal computers will be given a choice of the 12 most widely used browsers to install in addition to, or instead of, Microsoft's, the European Commission said in a statement. The deal also allows computer makers to ship PCs without Internet Explorer.

Browser Dominance

"For the first time in over a decade, Internet users in Europe will have an effective and unbiased choice between Microsoft's Internet Explorer and competing Web browsers, such as Mozilla Firefox, Google (GOOG) Chrome, Apple (AAPL) Safari and Opera (OPESF)," said Kroes.

The commission had accused the Redmond, Washington-based company in January of breaking EU antitrust rules by bundling Explorer with its Windows operating system, which powers more than 90 percent of PCs.

"We look forward to building on the dialogue and trust that has been established between Microsoft and the commission," said Microsoft General Counsel Brad Smith in a statement.

Kroes made a point of resolving years of conflict with Microsoft by settling the cases before her five-year term ends next month. The agreement, which will last five years, allows the commission to review the accord in two years. Microsoft will report on compliance starting in six months, the commission said.

'Big Chunks'

Microsoft will also disclose information to allow competing word-processing and spreadsheet products to function more smoothly with its Word and Excel programs, the commission said. The proposals result from a complaint by the European Committee for Interoperable Systems, a group representing International Business Machines Corp. (IBM), Sun Microsystems Inc. (JAVA) and seven other companies in February 2007.

"Big chunks of the Microsoft problem have been solved," said Maurits Dolmans, a lawyer for ECIS from Cleary Gottlieb Steen & Hamilton LLP.

Dolmans said there are still three other complaints against Microsoft. ECIS has complained that Microsoft changes standards on its Office software so that documents made in other formats don't appear correctly.

Another complaint deals with 235 patents owned by Microsoft in the Linux open-source software. The third deals with Microsoft's alleged discounts to businesses to convince them use the entire Windows platform for all their computing needs, Dolmans said.

Microsoft's browser dominance has eroded in recent years. Internet Explorer had 63.6 percent of the market in November, according to Net Applications, compared with 24.7 percent for Mozilla's Firefox, 4.4 percent for Apple Inc.'s Safari and 3.9 percent for Google's Chrome. Opera had 2.3 percent.

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