EU on Microsoft Browser Ballot Bungle: There Could Be Severe Consequences

The European Commission has threatened Microsoft with severe penalties after discovering that the company has failed to comply with a mandate to offer Windows users in Europe a choice of Web browsers.

“We take compliance with our decisions very seriously,” EU Competition Commissioner Joaquin Almunia said Tuesday. “And I trusted the company’s reports were accurate. But it seems that was not the case. If following our investigation, the infringement is confirmed, Microsoft should expect sanctions.”

Under the terms of a 2009 antitrust settlement with the European Commission, Microsoft was to present Windows users with a ballot screen offering them an opportunity to swap out Internet Explorer for one of 11 other browsers from rivals like Mozilla, Apple, Opera and Google. And it did do that, initially. But with an update to Windows 7 rolled out in February of 2011, Microsoft eliminated the ballot screen, and didn’t realize it had done so until it was alerted by the EC on July 2.

“Due to a technical error, we missed delivering the Browser Choice Screen (BCS) software to PCs that came with the service pack 1 update to Windows 7,” Microsoft said in a statement. “… While we believed when we filed our most recent compliance report in December 2011 that we were distributing the BCS software to all relevant PCs as required, we learned recently that we’ve missed serving the BCS software to the roughly 28 million PCs running Windows 7 SP1.”

Microsoft says it is scrambling to address the error, and has offered to extend its BCS compliance period by another 15 months to make good on it. But it remains to be seen whether that gesture will fly with the EC. After all, this is not the first time the group has taken Microsoft to task for noncompliance, and Almunia said today that if the EC investigation confirms the company’s failure to comply, there will be “severe consequences.” The EC can impose fines of up to 10 percent of annual revenue.

“This is in my view a very important case to ensure all the citizens and all the companies operating in the market that competition law requires a real serious enforcement,” Almunia said. “[We will] use all legal instruments with all the capacity to deter and to punish.”