Microsoft risks another hefty fine from EU over Internet Explorer

18 Jan 2009

The European Commission has sent a statement of objections to Microsoft over the tying of its web browser Internet Explorer to its ‘dominant’ PC operating system Windows.

A Statement of Objections (SO) is a formal step used by the Commission in antitrust investigations in which the Commission informs the parties concerned in writing of the objections raised against them.

In the SO, the Commission sets out evidence and outlines its preliminary conclusion that 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 SO is based on the legal and economic principles established in the judgment of the Court of First Instance of 17 September 2007, in which the court upheld the Commission’s decision of March 2004 that finding that Microsoft had abused its dominant position in the PC operating system market by tying Windows Media Player to its Windows PC operating system.

On that occasion the software giant was slapped with a massive €530m fine that despite a subsequent appeal was upheld by the Court of First Instance.

“The evidence gathered during the investigation leads the Commission to believe that the tying of Internet Explorer with Windows, which makes Internet Explorer available on 90pc of the world’s PCs, distorts competition on the merits between competing web browsers insofar as it provides Internet Explorer with an artificial distribution advantage which other web browsers are unable to match,” the Commission said in a statement.

“The Commission is concerned that through the tying, Microsoft shields Internet Explorer from head to head competition with other browsers which is detrimental to the pace of product innovation and to the quality of products which consumers ultimately obtain.

“In addition, the Commission is concerned that the ubiquity of Internet Explorer creates artificial incentives for content providers and software developers to design websites or software primarily for Internet Explorer which ultimately risks undermining competition and innovation in the provision of services to consumers,” the Commission said.

The news is likely to be welcomed by rival internet browsers like Mozilla’s Firefox and Google which has in recent months debuted a browser called Chrome.

The European Commission has given Microsoft eight weeks to reply the SO, and will then have the right to be heard in an oral Hearing should it wish to do so.

“If the preliminary views expressed in the SO are confirmed, the Commission may impose a fine on Microsoft, require Microsoft to cease the abuse and impose a remedy that would restore genuine consumer choice and enable competition on the merits,” the Commission said.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years