As our readers now, we have a series about the history of challenging big tech in which we have so far dealt with Microsoft’s interoperability and Media Player case and the Intel case. This post continues the series with another Microsoft case whose origins date back to a time when many other tech companies were still far from their present relevance.
The prehistory
The case goes back to 2007, when Opera, the Norway-based browser company, launched a complaint with the European Commission. Opera was introduced in 1996. At the time, the only other relevant competitor to Microsoft’s Internet Explorer was Netscape Navigator, which older readers might know, and which was discontinued in 2008.
Opera complained that Microsoft hindered competing web browsers by bundling Windows and its Internet Explorer. The complaint led the European Commission to initiate an/another investigation against Microsoft.
The product concerned
Everyone knows what a web browser is, so I spare myself an explanation. Web browsers were established at the beginning of the 1990s. Before Microsoft launched the Internet Explorer in 1995, two other web browsers were installed on Windows and Apple computers: Mosaic and Netscape Navigator. The latter was introduced in 1994 and quickly managed to drive Mosaic out of the market (so history seems to repeat itself).
The European Commission decision
On 16 December 2009, the European Commission adopted a commitment decision. With the decision, Microsoft committed to allow computer manufacturers and users to turn off the Internet Explorer (in case Internet Explorer is turned off, what the user considers as the web browser Internet Explorer, namely its browser frame window and menus (user interface), will not be accessible and will not otherwise launch programmatically) and to offer Windows users unbiased choice among different web browsers by means of a browser choice screen.
Prior to taking the decision, the European Commission had (provisionally) found that Microsoft abused its dominant position by tying the Internet Explorer to its Windows PC operating system. According to the regulator, the tying was particularly evident by the fact that PC manufacturers had to license Windows with the Internet Explorer pre-installed. Pre-installation of competing web browsers was only possible in addition to the Internet Explorer.
The European Commission also explored whether the possibility to download competing web browsers via the internet outweighed the pre-installation of the Internet Explorer. However, consumer surveys conducted by the regulator showed that Windows users were reluctant to download an additional web browser (many were not even aware of this option).
The commitments offered by Microsoft included the establishment of a mechanism which allowed computer manufacturers and users to turn the Internet Explorer off and on. Microsoft also committed to install a choice screen (via an update), which explained to users what web browsers are and offered them a choice of the twelve most used web browsers, with the five most used browsers being prominently displayed in a random order. Notably, the commitments only applied to Windows versions sold in the EEA. The commitments were binding for a total period of 5 years.
The aftermath
Readers who remember that Microsoft ended up paying a fine know that the commitment decision was not the end of the story. So, how come Microsoft had to pay EUR 561 million in March 2013, although everything seemed to be settled?
As agreed with the European Commission, Microsoft rolled out the choice screen for PCs operated with Windows 7. However, when the first “service pack” (i.e., an update) for Windows 7 was rolled out, Microsoft somehow forgot to also update the relevant programming code for the choice screen, resulting in the choice screen no longer being available on PCs on which the service pack was installed. Microsoft explained in detail and even had an external law firm investigate how the error could have occurred (details can be found in recitals 26-30 of the fining decision). According to the European Commission, 15.3 million users were affected by the incident.
The regulator found that Microsoft’s failure to comply with the Commitments “was due to inadvertent technical and human errors. Given its resources and know-how, however, Microsoft should have been able to avoid such errors and should have had better processes in place to ensure that the Choice Screen was correctly displayed to the affected users”. The fine was not appealed by Microsoft.
Key takeaways
The case shows that some mistakes are (very) expensive. However, it also indicates that the European Commission is willing to closely examine and react quickly when commitments are not implemented properly. The fact that the commitments were apparently not complied with due to negligence did not prevent the European Commission from imposing a fine.
Negligence was not even taken into account to mitigate the fine (but the fact that Microsoft did everything it could to clarify the cause of the violation and cooperated fully was taken into account). I leave it to others to answer the question of whether the European Commission’s intervention has led to more competition in the market for web browsers.
Picture from www_slon_pics on Pixabay
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