Wednesday, December 16, 2009

Europe Drops Its Latest Antitrust (Competition) Law Case Against Microsoft

In more European legal news, the European Commission (EC) has decided to drop a case alleging that the software giant, Microsoft, harms competition by bundling Internet Explorer with its Windows software.  The EC's decision came as a result of a settlement between the European regulatory authorities and Microsoft pursuant to which Microsoft agreed to offer its customers a choice of rival web browsers, including Mozilla, Apple and Google.  Microsoft will install a pop up screen offering the choice both in new computers and for existing customers.  Microsoft must report to the EC every six months on the implementation of the agreement for the next 5 years to avoid fines.

This settlement appears to reflect a change in legal strategy for Microsoft.  In a previous legal dispute with European competition authorities that lasted almost a decade, Microsoft was charged with abusing a dominant market position by tying Windows to its media player and server businesses.  The EC fined Microsoft $2.44 billion dollars and forced Microsoft to change its business practices in order to continue its sales in Europe.  Now, Microsoft appears more willing to compromise rather than face costly litigation and fines. 

The settlement only covers Windows users in Europe and reports indicate that Microsoft has no plans to extend the terms to other markets, despite the fact that 90% of computers in the world run on the Windows operating system. 


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