UPDATE 1-EU investigates Microsoft over browsers

Tue Jul 17, 2012 9:08am EDT

* Second time Microsoft defies EU regulatory rulings

* Microsoft blames technical error for problem

* Offers to extend compliance period for additional 15 months

By Foo Yun Chee

BRUSSELS, July 17 (Reuters) - Microsoft may have failed to comply with a 2009 European Union order to offer users a choice of rival web browsers, marking the second time it has defied regulators, and could face hefty fines, the EU's antitrust chief said.

The U.S. software group agreed nearly three years ago to allow European consumers better access to rival browsers in its Windows software, settling an antitrust case and avoiding a penalty which could have been set at up to 10 percent of global turnover.

But Microsoft may not have followed through with the pledge for its Windows 7 operating system, EU Competition Commissioner Joaquin Almunia told a news conference on Tuesday.

"We take compliance with our decisions very seriously. And I trusted the company's reports were accurate. But it seems that was not the case, so we have immediately taken action," Almunia said.

The browser option for users to select rivals to Microsoft's Internet Explorer had been due to run until 2014.

"If following our investigation, the infringement is confirmed, Microsoft should expect sanctions," he said.

The European Commission said users in the 27-country European Union were not offered the browser choice from February 2011 until now -- a statement confirmed by Microsoft.

The software company apologised and blamed the issue on a technical problem.

"Due to a technical error, we missed delivering the BCS (browser choice screen) software to PCs that came with the service pack 1 update to Windows 7," the company said in a statement.

"While we have taken immediate steps to remedy this problem, we deeply regret that this error occurred and we apologise for it."

Microsoft said it was now distributing software with the browser option and has offered to extend the compliance period for an additional 15 months.

It said it may face regulatory sanctions for breaching its undertakings to the European Commission.

In a separate case launched by the Commission, Microsoft was fined 899 million euros ($1.10 billion) four years ago for failing to comply with a 2004 antitrust decision. Europe's second-highest court trimmed the figure -- a record at the time -- by 4.3 percent last month.

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