The European Commission has fined Microsoft €561 million (approximately US$730 million) for failure to abide by a commitment made in 2009 to make a browser-choice screen available to PC-users. The fine is in relation to the Internet Explorer case, which should not be confused with the case against Microsoft under the previous Competition Commissioner that ended with a decision in 2004 imposing fines for abuse of a dominant position in relation to interoperability between Windows and work group servers, and the tying of Windows Media Player to Windows.
The Commission’s formal finding of non-compliance in the Microsoft Internet Explorer case is the first time a company has been found to have violated a settlement agreement with the Commission. The Commission’s fine sends a strong signal to companies that failure to comply with the terms of a settlement will not be tolerated in any circumstances.
On 16 December 2009, the Commission rendered a decision under Article 9 of Regulation 1/2003 that gave legally binding effect to the commitments offered by Microsoft in relation to its practices on the web browser market. The commitments were made to address concerns that Microsoft might have tied its web browser, Internet Explorer, to the Windows PC operating system in breach of EU rules on abuse of dominance (Article 102 of the Treaty on the functioning of the European Union). Under the commitments approved by the Commission, Microsoft promised to make available for five years a “ballot screen” that would enable users of Windows XP, Windows Vista and Windows 7 to choose the web browser(s) they preferred to install in addition to, or instead of, Internet Explorer. The commitments also provided that computer manufacturers would be able to install competing web browsers, set these as defaults, and switch off Internet Explorer. The Commission allowed Microsoft to act as its own trustee to monitor the commitments.
On 17 July 2012, the EU’s top antitrust regulator announced the launch of an investigation into allegations that Microsoft had failed to comply with the browser commitment made in 2009.
The Commission’s Decision
The Commission found that Microsoft had in fact failed to make the browser ballot screen available to customers with its Windows 7 Service Pack 1 between May 2011 and July 2012.
Taking into account the gravity and duration of the infringement, and the mitigating factor of Microsoft’s cooperation in the matter, the Commission imposed on Microsoft a fine of €561 million. Commissioner Almunia commented
"In setting the level of the fine, the Commission took into account (…) the need to ensure that the sanction is sufficiently deterrent”. Deterring violations of settlements is vital as Commissioner Almunia sees commitment decisions as (…) a very important tool in the EU antitrust enforcement system. Decisions of this type (…) can be a good way to solve antitrust concerns swiftly since they avoid lengthy proceedings".