The European Union dropped antitrust charges against Microsoft on Wednesday after the software company agreed to give users a choice of Web browsers. But will that really change anything for Microsoft?
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Under the settlement, Microsoft will give European users of its Windows operating system a ballot screen for choosing their preferred browser. Microsoft also will give computer manufacturers the ability to turn off access to Internet Explorer and set any browser as default.
For more than a decade, Internet Explorer has been bundled with Windows in Europe as the prominent browser. Now forced to integrate competitors into its European reach, Microsoft will have to focus more on improving, promoting and marketing IE.
"We would have had to do that without this (decision)," said Brad Smith, Microsoft's general counsel. "We may have to do it more with this."
Twelve browsers will be featured on the ballot screen: IE, Safari, Chrome, Firefox, Opera, AOL, Maxthon, K-Meleon, Flock, Avant Browser, Sleipnir and Slim Browser. However, only the top five – IE, Safari, Chrome, Firefox and Opera – will be prominently displayed.
Starting in March, Microsoft will deliver the ballot screen via Windows Update for users of Windows XP, Vista and 7 in 30 European countries. It's estimated that more than 100 million computers will pop up the browser ballot, with 30 million more expected over the next five years.
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With 64 percent of the global market, according to Net Applications, Internet Explorer is the most popular browser – but the EU's Competition Commission launched the antitrust investigation to probe whether that figure was artificially inflated due to Microsoft's bundling IE with Windows. Mozilla's Firefox represents nearly 25 percent of the global browser market, followed by Apple's Safari at 4 percent and Google's Chrome at 3.9 percent.
In Microsoft's view, people have always had a choice of Web browsers. It's just that now European users might be more aware of their options.
"They're all used today, so that doesn't really change," Smith said. "It continues."
The EU's competition commissioner, Neelie Kroes, had a different point of view speaking after the agency's vote Wednesday morning in Brussels.
"It is as if you went to the supermarket and they only offered you one brand of shampoo on the shelf, and all the other choices are hidden out the back, and not everyone knows about them," she said. "What we are saying today is that all the brands should be on the shelf."
Kroes, whose term expires along with the current decade, had made it her goal to settle with Microsoft by the end of her tenure. Since she took office in 2004, she has fined Microsoft $1.8 billion – more than half of the $2.4 billion in fines the EU has handed the software giant.
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The investigation was launched after browser competitor Opera filed a complaint in 2007. The European antitrust agency, concerned Microsoft was abusing its monopoly power, gave the Redmond-based company a chance to offer a solution to complaints over browser bundling.
In June, Microsoft proposed altogether stripping Internet Explorer from Windows in Europe, and even started developing a browserless Windows 7 "E" version. The Competition Commission rejected that plan and pushed for the ballot screen.
Microsoft bowed to pressure and developed the ballot screen, incorporating the EU's and rivals' suggestions. In the two months since the EU accepted Microsoft's proposal this October, he company has tweaked the IE-powered ballot screen to display the top five browsers randomly – instead of alphabetically – and to exclude traditional navigation buttons, making the screen more difficult to ignore.
"We have been working hard these past few months," Smith said, "so we're on track to do what we need to do" by March.
In a statement, Opera – the company that sparked the EU probe – said Wednesday's decision was a win for consumers.
"This is a victory for the future of the Web," Opera CEO Jon von Tetzchner said. "This decision is also a celebration of open Web standards, as these shared guidelines are the necessary ingredients for innovation on the Web."
Perhaps more than anything else, Wednesday's decision marks an end to high-profile antitrust cases regarding IE-Windows bundling. It all started in 1998, when the United States investigated Microsoft for trying to squeeze out the Netscape browser.
The case was settled in 2002 and Microsoft was required to share the Windows application programming interface with rivals. Some viewed the settlement as a mere slap on Microsoft's wrist.
Redmond has been fighting such bundling accusations for more than a decade.
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"This is a very important milestone for the company," Smith said. "It's something we've been working to settle for a long, long time."
However, Microsoft is not off the hook yet. Under Wendesday's settlement, the EU can fine Microsoft up to 10 percent of its yearly global turnover if it does not comply for five years. And European regulators would not have to prove their case.
The Competition Commission also continues to investigate a complaint that Microsoft isn't sharing enough technical information with developers who are trying to make compatible products. Smith said that because there has been no official statement of objections, the investigation is still informal.
Microsoft on Wednesday said it would step up efforts to promote interoperability in Europe. But European regulators reacted coolly to the offer, saying they would look into whether it would actually help competitors.
"We believe it represents the most comprehensive commitment to the promotion of interoperability in the history of the software industry," Smith said in a statement. "Under this undertaking, Microsoft will ensure that developers throughout the industry, including in the open source community, will have access to technical documentation to assist them in building products that work well with Microsoft products."
Smith told seattlepi.com that Microsoft is pleased to have been a part of the creation of new laws in Europe. With new technology come new laws, he said, and it's a very slow process.
"This creates clarity for us in Europe," Smith said. "I think it makes clarity for the entire industry."
Microsoft is required to report back to regulators in six months, so they can assess how well the ballot-screen is working. The Competition Commission will be able to ask for changes, and the browser choices will be updated every six months based on new market-share information.
The EU also is able to review the deal at the end of 2011.
"Millions of European consumers will benefit from this decision by having a free choice about which Web browser they use," Kroes, the competition commissioner, said in a statement. "Such choice will not only serve to improve people's experience of the Internet now but also act as an incentive for web browser companies to innovate and offer people better browsers in the future."