BERLIN
— European regulators dropped their antitrust case against Microsoft on
Wednesday after the software maker agreed to offer consumers a choice of rival
Web browsers. The settlement averted a second costly legal battle for the
American software giant.
The
agreement, announced in Brussels
by the European competition commissioner, Neelie Kroes, calls for Microsoft to
give Windows users a choice of up to 11 other browsers from competing companies,
including Mozilla, Apple and Google.
Users
of Microsoft’s ubiquitous Windows operating system in Europe who have chosen its
Internet Explorer as their default browser will receive in a software update an
option to switch to a rival, starting next year.
“Millions
of European consumers will benefit from this decision by having a free choice
about which web browser they use,” Ms. Kroes said in a
statement.
In
a statement, Microsoft said it was “pleased” with the decision. Jesse
Verstraete, a Microsoft spokesman in Brussels, said the company has no plans to
extend the offer beyond the 27-member European Union, plus Norway, Iceland and
Liechtenstein.
Still,
the settlement underlines, according to legal experts, the increasingly
conciliatory posture being taken by U.S. technology companies to avoid sanctions
— and to be able to keep doing business — in Europe.
“These
companies recognized that the European Commission is playing a significant role
in global antitrust law and must be taken seriously,” Susanne Zuehlke, an
antitrust lawyer in Brussels at the U.S. firm of Latham & Watkins, said
ahead of the announcement. “Of course, the huge fines recently have also focused
everyone’s attention.”
For
Microsoft, the settlement is a stark contrast to its acrimonious first legal
clash with European officials, which resulted in fines of €1.68 billion, or
$2.44 billion and an order to change some business practices. That case, which
lasted nearly a decade, ended in October 2007 when Microsoft dropped its appeal
of a commission judgment that it had abused the dominance of Windows to aid its
media player and server businesses.
Two
months after Microsoft gave up, Opera, a small Norwegian browser maker, filed
its complaint over browsers, instigating the second case.
Google,
which makes the Chrome browser, and Mozilla, makers of Firefox, signed on as
opponents in the case. The commission in January said Microsoft’s bundling of
Internet Explorer in Windows was harming competition. In July, Microsoft
proposed the browser distribution plan which, after adjustment to appease
rivals, led to the settlement.
Rival
browser makers said the agreement represented a huge opportunity for their own
Internet-surfing software, which they said would also give Europeans more choice
and a better ability to compare browsers.
“I
think this settlement has the potential to change the status quo,” Sundar
Pichai, the head of Google’s Chrome browser team and Chrome web-based operating
system, said. “Most consumers in the past have chosen Internet Explorer because
it came on their computers. Now the decision will be made on the
merits.”
Microsoft’s
Windows operating system runs more than 90 percent of all computers in the
world.
Under
terms of the European settlement, Microsoft will, by mid-March, send ballot
screens via automatic software updates to 100 million users of Windows XP, Vista
and 7 operating systems in Europe who have set Internet Explorer as their main
browser.
Through
March 2015, the screens will also be automatically sent to purchasers of new
Windows-based computers, an estimated 30 million per year. Computer makers will
also have the ability to turn off Internet Explorer before sale and install
rival browsers.
On
the ballot screen, consumers initially will be able to choose from Internet
Explorer, Firefox, Safari, Chrome, Opera, AOL, Maxthon, K-Meleon, Flock, Avant
Browser, Sleipnir and Slim Browser. The first five, which are the most widely
used, will be prominently displayed, and the others will be shown when a user
scrolls sideways on the screen. nternet Explorer had 62 percent of the European
market in September, according to AT Internet Institute, a research firm that
tracks browser use in
Share
your thoughts.
Nicolas
Babin, the chief operating officer of AT Internet, said it was unclear what the
settlement’s impact on the market would be.
“People
already have this choice anyway,” Mr. Babin said, referring to the ability to
download free browsers. “Perhaps because it will be thrust in their face, it may
have an impact. But it’s difficult to say at this point what that will
be.”
But
any changes in market share are likely to come at Microsoft’s expense, given its
dominance, he said.
But
small browser makers like Maxthon, which is based in
Maxthon,
whose investors include Google, Charles River Investments and Morton Lund, an
early investor in Skype, gives away its browser and earns money from Google and
Yahoo by sending its browser users to their search
engines.
“Maxthon
has been downloaded 300 million times,” said Jeff Chen, the Maxthon founder and
chief executive. “We have lots of European users and we want more to know our
browser.”
Aside
from the settlement’s effect on the browser market, legal observers said
Microsoft’s agreement to effectively distribute the software of rivals was
confirmation of
“Mrs.
Kroes’ big contribution has been to raise the fines,” said Annette Schild, a
competition lawyer in
Within
the past year, the commission, under Ms. Kroes, has wrung concessions from
Oracle, which is seeking EU approval to acquire Sun Microsystems; Rambus, which
agreed to lower its royalties on some memory chips; and now
Microsoft.
Last
month the commission also dropped a four-year probe into Qualcomm’s rebate
policies after the
Each
time, the
That
has left some companies like Intel, the world's largest computer chip maker
which is vigorously trying to reverse a commission judgment, in a shrinking
minority.
Ms.
Kroes fined Intel €1.06 billion in April for using improper rebates and
incentives to convince computer makers to use its processors over those of a
rival, Advanced Micro Devices. Intel is appealing but a hearing isn’t likely
until 2011 — at the earliest.
Despite
Wednesday’s settlement, Microsoft is not out of the woods in
The
commission is still investigating the company’s compliance with its previous
order to share confidential operating code with rivals, so as to let third-party
software work better with Windows-based computers and
servers.
But
even here, Microsoft on Wednesday also made concessions, agreeing to share more
information with its rivals, including publishing a warranty agreement and a
patent licensing agreement.
“We
look forward to building on the dialogue and trust that has been established
between Microsoft and the Commission and to extending our industry leadership on
interoperability,” Brad Smith, Microsoft’s general counsel, said in the
company’s statement.
The
commission said it welcomed Microsoft’s new disclosure, although the case is
still officially ongoing.