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Microsoft told to quit bundling IE in Europe

The EU says the packaging of the Internet Explorer browser with the Windows operating system violates antitrust rules and orders changes to allow fair competition.

January 17, 2009|Associated Press

BRUSSELS — The European Union said Friday that Microsoft Corp.'s practice of selling the Internet Explorer browser with its Windows operating system violates EU antitrust rules.

It ordered the software giant to untie the browser from its operating system in the 27-nation EU, enabling makers of rival browsers to compete fairly.

"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 EU said in a statement.

It gave Microsoft eight weeks to respond, adding that the company can defend its position in a hearing if it finds that useful. Microsoft issued a statement saying, "We are committed to conducting our business in full compliance with European law."

The commission's investigation into Microsoft's Web-surfing software began a year ago, after the Norwegian browser maker Opera Software ASA filed a complaint. Opera argued that Microsoft hurt competitors not only by bundling the software, in effect giving away the browser, but also by not following accepted Web standards.

That meant programmers who built Web pages would have to tweak their codes for different browsers. In many cases, they simply designed pages that worked with market-leading Internet Explorer but showed up garbled on competing browsers.

At the time of the complaint, Opera said it was asking EU regulators to either force Microsoft to market a version of Windows without the browser or include other browsers with Windows.

The European Commission upheld Opera's complaint, adding that a yearlong probe led it "to believe that the tying of Internet Explorer with Windows -- which makes Internet Explorer available on 90% of the world's PCs -- distorts competition."

It said Microsoft markets Internet Explorer "with an artificial distribution advantage which other Web browsers are unable to match."

It added that Internet Explorer's disproportionate market share leaves content providers and software developers no option but to "design Web sites or software primarily for Internet Explorer."

Friday's announcement by the European Commission means Microsoft must alter its marketing practices in Europe and risks a large fine.

Microsoft has touted its forthcoming browser, Internet Explorer 8, as being fully compliant with Web standards.

Microsoft is no stranger to EU antitrust officials. In 2004, the European Court of Justice found the company had violated EU antitrust rules by trying to damage rivals for server and media player software.

It fined it more than $600 million and ordered it to offer a version of Windows in Europe without the Media Player software and to share communications code with rivals. Microsoft lost an appeal of that ruling Sept. 17, 2007.

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