Commission accepts Microsoft commitments to give users browser choice

On 16 December 2009, the European Commission has adopted a decision making legally binding commitments offered by Microsoft to boost competition on the web browser market.

Microsoft commits to offer European users of Windows choice among different web browsers and to allow computer manufacturers and users the possibility to turn Internet Explorer (“IE”) off. Microsoft also undertakes to make far-reaching interoperability disclosures. Even though this undertaking remains “informal” vis-à-vis the Commission (i.e. outside the formal legally-binding commitments), Microsoft’s public undertaking offers assurances to third parties that can be privately enforced.  The Commission will carefully monitor the impact of this undertaking on the market and take its findings into account in the pending antitrust investigation regarding interoperability.

On 15 January 2009, the Commission sent a Statement of Objections to Microsoft, alleging that Microsoft’s tying its IE with its dominant PC operating system Windows, which makes IE available on 90% of the world’s PCs, may have distorted competition on the merits between competing web browsers insofar as it may have provided IE with an artificial distribution advantage which other web browsers were unable to match, in breach of EU rules on abuse of a dominant market position (Article 102 of the Treaty on the Functioning of the European Union, or “TFEU”).

In particular, as a result of its tying conduct, Microsoft may have been able to shield IE from head to head competition with other browsers, whereas the ubiquity of IE may have created artificial incentives for content providers and software developers to design websites or software primarily for IE which ultimately hindered competition and innovation in the provision of services to consumers. According to the Commission, Microsoft’s practice lead to significant consumer harm, in the light of the fact that the development of new online services makes web browsers an increasingly important tool for businesses and consumers, and a lack of real consumer choice on this market would undermine innovation.

Microsoft replied to the Statement of Objections on 28 April 2009. In June 2009, Microsoft announced that it was prepared to separate IE from Windows to address the Commission’s concerns. In particular, Microsoft stated that it would supply retail consumers with a version of Windows without a web browser at all, while computer manufacturers (“OEMs”) would have been able to choose to install IE, another browser or multiple browsers in the computers they sell.

The Commission’s first reaction to Microsoft proposal was not enthusiastic.  In fact, in the Statement of Objections the Commission had clearly suggested that a potential remedy should provide consumers with a genuine choice of browsers presented to them through a choice screen in Windows.

On 24 July 2009, Microsoft offered a new set of commitments to meet the concerns expressed by the Commission, including the ballot screen solution suggested by the Commission.  On 9 October 2009, the Commission published a market test notice with the summary of the proposed commitments and called for comments from interested third parties, with the aim of making those commitments binding on Microsoft.

The commitments offered by Microsoft, as now accepted by the Commission, intend to allow for an unbiased choice for both OEMs and end users between Microsoft’s browser and competing browsers. The key elements of the commitments are:

  • OEMs and computer users within the EEA will have the possibility to turn IE on and off via a control panel feature, and when IE is off the browser frame window and menus will not be accessible to the user or anybody else in any way.
  • OEMs will be free to pre-install any web browser(s) of their choice on PCs they ship and set it as default web browser. Microsoft will not circumvent the commitments and shall not retaliate against OEMs for installing competing web browsers or by other means.
  • Choice Screen will give users within the EEA the opportunity to choose whether and which competing web browser(s) to install. The Choice Screen will display in an unbiased way icons of and basic identifying information on the most 12 widely-used web browsers (the five most widely used browsers will be prominently displayed and the other seven browsers will be shown when the user scrolls sideways).

Microsoft has until mid-March 2010 to make the Choice Screen update available to users, at which point it will be directly available to Windows 7 users. The roll-out to all users of Windows XP and Vista will be completed within five months from the date of the decision. The update will remain available for five years.

The Choice Screen update will be displayed on over 100 million PCs in Europe when it is launched in mid-March 2010 and to around 30 million new PC users per year over its five year term. In addition, from mid-March 2010 onwards, anyone can view and use the Choice Screen at www.browserchoice.eu .

The outgoing Commission thus puts an end to the Microsoft saga in Europe under Mrs. Kroes’ tenancy.  The Microsoft browser commitment is probably the last act. [Gabriele Accardo]

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