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EU, Microsoft Reach Agreement Over Anti-Trust Disputes

December 16, 2009

European Union regulators ended a decade-long anti-trust dispute with computer giant Microsoft after reaching a deal that would open up new PCs to rival Internet browsers.

Brussels announced the new binding agreement that will allow computer users in Europe who buy new hardware based on Microsoft’s Windows operating system to choose which browser they want to install on their PC.

Starting in mid-March, the five-year deal will end years of massive fines backed by an EU court. A similar undertaking on interoperability of other broad-based PC software and applications was also informally accepted.

EU Competition Commissioner Neelie Kroes told a press conference that the decision represents “a Christmas present for hundreds of millions of Europeans.”

When asked if outstanding competition complaints with Microsoft remain on the table, Kroes said, “Microsoft is well aware, in competition terms, what has to be avoided.”

The EU commission felt consumers were not being allowed to make an “unbiased” choice between Microsoft’s software and related applications and those of rivals including Mozilla’s Firefox, Google’s Chrome or Opera.

Now PC users across the European Economic Area, the 27 EU nations plus Iceland, Liechtenstein and Norway, will have in-built freedom of choice for five years from the agreement’s implementation in March 2010.

EU officials say the decision legally binds Microsoft to the commitments it has offered and ends the commission’s investigation into whether the company had abused its dominant position in the European marketplace.

Brussels said over 100 million new personal computers available in Europe from March will see a new “choice screen” that will greet buyers when they configure their PC for use.

Some 30 million new PC users per year will be affected over the deal’s five-year term that concerns computers running Windows XP, Windows Vista and Windows 7.

For years, PC users have been able to download and install different browsers on the market, but this decision marks a step-change in Europe with implications for Microsoft in other regions.

Kroes said the option of having a choice of which browser to use will not only serve to improve people’s experience of the Internet now but also act as an incentive for web browser companies to innovate and offer people better browsers in the future.

Microsoft is also publishing on its website an undertaking whereby it commits to make far-reaching interoperability disclosures concerning other software and applications which had also raised concern from Brussels, Kroes said.

In October, Microsoft said it was mounting “the single biggest legal commitment in the history of the software industry to promote inter-operability” between its products and those of rival developers.

Microsoft cited improved proposals for European consumers centered on applications that apply to Windows, Windows Server, Office, Exchange and SharePoint products.

Microsoft lost an appeal in September 2007 before Europe’s second-highest court after EU regulators slapped a fine of more than $660 million on the company in 2004 for abusing its dominant power, partly in the media players market.

The commission hit Microsoft with a further fine of almost 900 million euros in February 2008 for defying its 2004 ruling.

Kroes said the commission threatened litigation on the browser issue in January, but she stressed while announcing the deal that it would “review the commitments in two years”.

The Commission said it would monitor the impact of the software maker’s undertaking on the market and take its findings into account in the pending antitrust investigation regarding interoperability on a complaint by industry body ECIS.

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