Microsoft Claims 'Technical Error' Made It Violate EU Browser Choice Rule

Microsoft admits it failed to comply with a European Union directive to provide a Browser Choice Screen (BCS) on computers with Windows 7 Service Pack 1 sold in that region, saying "we have fallen short."

Microsoft admits that it failed to meet a European Commission requirement that it offer a Browser Choice Screen on Windows 7 computers sold in the European Union as required by a 2009 agreement between the software maker and the EC.

Microsoft said in a July 17 statement that €œWe have fallen short in our responsibility to do this. We deeply regret that this error occurred and we apologize for it.€

A European Commission member said in a statement that the EC has launched an investigation into the case and that €œthis could have severe consequences€ for Microsoft.

While the company was the subject of a U.S. Department of Justice antitrust probe in the 1990s, a parallel action was being taken in the EU by the European Commission, the executive body of the EU. The EC probe concluded that Microsoft abused its monopoly position in the browser market by making its Internet Explorer browser the default browser on Windows computers sold within the EU. The 2009 agreement requires Microsoft to install a Browser Choice Screen (BCS) so that the user has the option to use Google Chrome, Mozilla Firefox or other browsers.

But Microsoft said that due to a technical error, it missed delivering the BCS software to PCs that came with the Service Pack 1 update to Windows 7. The original Windows 7 OS included the BCS, as did all versions of Windows XP and Windows Vista. But the omission leaves 28 million PCs sold within the EU that don€™t have BCS. Microsoft said that it began developing a software fix to add the BCS option on July 2, the next business day after the company discovered the omission. It is expected to complete distribution of the BCS by the end of this week.

Microsoft has hired outside legal counsel to investigate how and why the BCS glitch occurred, interviewing several Microsoft employees and reviewing documents. The full report of the investigation will be presented to the EC.

As further evidence of its mea culpa campaign, Microsoft volunteered to extend the time during which it is obliged to add BCS by an additional 15 months past its scheduled expiration in 2014, although it understands €œthat the Commission may decide to impose other sanctions.€

EU Competition Commissioner Joaquin Almunia said at a news conference in Brussels announcing the investigation that the BCS stopped being installed on Windows machines as far back as February of 2011 but that Microsoft as recently as December 2011 told the EC that it was still including the browser option.

"Needless to say, we take compliance with our decision very seriously," Almunia said. "If the infringement is confirmed, there will be sanctions."

Microsoft is also in hot water with the EC over Skype, which Microsoft acquired in 2011 for $8.5 billion. Cisco Systems filed an appeal of the EC€™s approval of the merger in February, arguing that it should have placed conditions regarding the integration of Microsoft Lync unified communications platform with Skype€™s voice and video calling service. Cisco argues this could close out other options for end users such as Cisco€™s video conferencing services. A Cisco spokesman said the EC is still reviewing its appeal.