* European Commission says company did not respect antitrust
* U.S. firm failed to offer users a web browser choice
* Fine raises total EU penalties against Microsoft to 2.16
By Foo Yun Chee
BRUSSELS, March 6 The European Union fined
Microsoft Corp 561 million euros on Wednesday for
failing to offer consumers a choice of web browser, a charge
that will act as a warning to other technology firms involved in
antitrust disputes with the EU.
It said the U.S. company had broken a legally binding
commitment made in 2009 to ensure consumers had a choice of
browser, rather than defaulting to Microsoft's Internet
An EU investigation found that Microsoft had failed to
honour that obligation in software issued between May 2011 and
July 2012, meaning that 15 million users were never made aware
that they could choose.
"Legally binding commitments reached in antitrust decisions
play a very important role in our enforcement policy," said
Joaquin Almunia, the EU's competition commissioner.
"A failure to comply is a very serious infringement that
must be sanctioned accordingly."
Wednesday's fine is the first time the European Commission,
the EU's antitrust authority, has fined a company for
non-compliance with agreed commitments. It could have charged
Microsoft up to 10 percent of its global turnover, or as much as
In that respect, the fine is relatively light, but still
marks a firm sanction by the EU and will not go unnoticed by the
likes of Google, which is involved in a dispute with
the Commission over how it ranks search engine results.
Google is under pressure to offer concessions to prevent the
antitrust authority moving to the next stage in the case, which
could involve fines. Other major technology firms are also in
the Commission's crosshairs in other cases.
Microsoft has a long and bitter relationship with the EU's
powerful antitrust authority, which has now issued fines
totalling 2.16 billion euros against the U.S. firm.
In 2004, the Commission found that Microsoft had abused its
dominant market position in relation to the tying of Windows
Media Player to the Windows software package and imposed fines.
Then in 2009, in order to resolve other competition
concerns, Microsoft undertook to offer users a browser choice
screen allowing them to download a browser other than Explorer.
The Commission made that obligation legally binding for five
years, until 2014, and initially the company complied. From
March 2010 until November 2010, 84 million browsers were
downloaded via the screen, the Commission said on Wednesday.
But the Windows 7 service pack 1 rolled out between mid-2011
and mid-2012 failed to offer the choice, leading to the
investigation that resulted in Wednesday's fine.
Microsoft has said the failure was the result of a technical
error and that procedures have since been tightened.
In what was seen as an acknowledgement of the severity of
the mistake, the board cut the bonus of chief executive Steve
Ballmer last year, according to company's annual proxy filing.
The Commission said it had taken into account in calculating
the fine that Microsoft had cooperated by providing information
that had helped speed-up the investigation.
Analysts always found it odd that Microsoft would have
purposefully failed to offer a choice of browsers via its
software given that the potential fine for such a failure would
far exceed any potential income from not offering it.
Microsoft's share of the European browser market has more
than halved since 2008 to 24 percent. Google's Chrome has a 35
percent share, followed by Mozilla with 29 percent, according to
Web traffic analysis company StatCounter.