Microsoft May See $7.4B Antitrust Fine - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Government // Enterprise Architecture

Microsoft May See $7.4B Antitrust Fine

Software maker admits it failed to comply with 2009 European agreement under which it pledged to make alternatives to Internet Explorer easily available in all versions of Windows.

Microsoft Surface Tablet: 10 Coolest Features
Microsoft Surface Tablet: 10 Coolest Features
(click image for larger view and for slideshow)
The European Union's competition watchdog said Tuesday that it has launched a probe into Microsoft's failure to comply with an agreement under which it promised to make it easier for consumers to use alternatives to the Internet Explorer Web browser on Windows PCs.

Microsoft in 2009 hashed out the deal with the European Commission (EC), which claimed Explorer's prominent place on the Windows desktop gave it an unfair advantage in the browser market against rival browsers from Opera, Google, and Mozilla, which develops Firefox.

To remedy the situation, Microsoft agreed to add a so-called "Browser Choice Screen" to Windows, from which users could select a default browser the first time they booted their systems.

But the Commission contends that Microsoft failed to implement the BCS in Windows 7 Service Pack 1, which debuted in Europe in February 2011, despite Microsoft's assertions in compliance reports that it was meeting the terms of the agreement.

"We take compliance with our decisions very seriously, and I trusted the company's reports were accurate," said Joaquin Almunia, the EC's VP for competition, in a statement. "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."

[ Microsoft unveiled its newest productivity software suite Monday. Office 2013: Is Microsoft Out Of Touch?. ]

Under the agreement, the penalty could be as much as 10% of Microsoft's annual revenue, which is estimated at about $74 billion for the company's just-ended fiscal year. That means a potential fine of $7.4 billion. Microsoft is expected to report full-year financial results Thursday.

Microsoft acknowledged that it was not in compliance with the agreement, and blamed its failure to comply on "a technical error." In a statement Tuesday, the software maker conceded that "we missed delivering the BCS software to PCs that came with the Service Pack 1 update to Windows 7."

Microsoft said the slipup affects 28 million PCs running Windows 7 SP1. "The BCS software has been delivered as it should have been to PCs running the original version of Windows 7, as well as the relevant versions of Windows XP and Windows Vista," the company said.

"While we have taken immediate steps to remedy this problem, we deeply regret that this error has occurred and we apologize for it," said Microsoft. The company said it began distribution of the BCS to Windows 7 SP1 users July 2 through a software update, and that it has taken other steps to ensure compliance with its EC agreement.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

How SolarWinds Changed Cybersecurity Leadership's Priorities
Jessica Davis, Senior Editor, Enterprise Apps,  5/26/2021
How CIOs Can Advance Company Sustainability Goals
Lisa Morgan, Freelance Writer,  5/26/2021
IT Skills: Top 10 Programming Languages for 2021
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/21/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Flash Poll