Microsoft Loses E.U. Antitrust Case

The European Union ordered Microsoft to untie the Internet Explorer browser from its Windows operating system in the 27-nation E.U.
The European Union ordered Microsoft to untie the Internet Explorer browser from its Windows operating system in the 27-nation E.U. (By Jae C. Hong -- Associated Press)
By Robert Wielaard
Associated Press
Saturday, January 17, 2009

BRUSSELS, Jan. 16 -- The European Union said Friday that Microsoft's practice of selling the Internet Explorer browser together with its Windows operating system violates E.U. antitrust rules.

It ordered the software giant to untie the browser from its operating system in the 27-nation E.U.

"Microsoft's tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice," the E.U. said in a statement.

It gave Microsoft eight weeks to respond, adding that the company can defend its position in a hearing if it finds that useful.

Microsoft issued a statement saying, "We are committed to conducting our business in full compliance with European law."

The commission's investigation into Microsoft's Web-surfing software began a year ago, after the Norwegian browser-maker Opera Software filed a complaint. Opera argued that Microsoft hurt competitors not only by bundling the software, in effect giving away the browser, but also by not following accepted Web standards.

That meant programmers who built Web pages would have to tweak their codes for different browsers. In many cases, they simply designed pages that worked with market-leading Internet Explorer but showed up garbled on competing browsers.

At the time of the complaint, Opera said it was asking E.U. regulators to either force Microsoft to market a version of Windows without the browser, or to include other browsers with Windows.

The European Commission upheld Opera's complaint, adding that a yearlong probe led it "to believe that the tying of Internet Explorer with Windows -- which makes Internet Explorer available on 90 percent of the world's PCs -- distorts competition."

Friday's announcement by the European Commission means Microsoft must alter its marketing practices in Europe and risks a large fine.

Microsoft is no stranger to E.U. antitrust officials. In 2004, the European Court of Justice found the company had violated E.U. antitrust rules by trying to damage rivals for server and media player software.

The court fined Microsoft more than $600 million and ordered it to offer a version of Windows in Europe without the Media Player software and to share communications code with rivals.

Microsoft lost an appeal of that ruling Sept. 17, 2007.

Although Microsoft is a U.S. company, it must meet E.U. antitrust rules if it wants to do business in the European Union. E.U. antitrust rules prohibit companies from abusing a dominant market position.

Associated Press writer Jessica Mintz in Seattle contributed to this report.

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