Microsoft to pay a hefty fine

The European Union fined Microsoft Corp 561 million euros on Wednesday for failing to offer users a choice of web browser, an unprecedented sanction that will act as a warning to other firms involved in EU antitrust disputes. It said the U.S. software company had broken a legally binding commitment made in 2009 to ensure that consumers had a choice of how they access the Internet, rather than defaulting to Microsoft’s Explorer browser.

An investigation found that Microsoft had failed to honor that obligation in software issued between May 2011 and July 2012, meaning 15 million users were not given a choice.
While the sanction is sizeable, representing more than 11 percent of Microsoft’s expected net profit this quarter and 1 percent of annual sales, the Commission could have charged the company up to 10 percent of annual global revenue.

Microsoft’s share of the European browser market has fallen by more than half since 2008 to 24 percent. Google’s Chrome has a 35 percent share, followed by Mozilla’s Firefox with 29 percent, according to Web traffic analysis company StatCounter.

Microsoft has announced that it has no plans to appeal, an unprecedented servile move by the software giant. The natural question is why is Microsoft so acquiescent all of a sudden.

Well, Microsoft has actively refused to support competing browsers, making repeated updates, which introduced instabilities for other browsers – until both the European Competition Commission and equivalent US authorities intervened. This was entirely intentional on Microsoft’s part – this was blatantly a strategy for dominating the browser market (since that in itself would protect and help monopolize the .NET ecosystem, Microsoft investments in B2B services, etc.).
To this end, even after Windows was required to stable support for 3rd party browsers, just as it already had done so with other application software, Windows continued to bundle Internet Explorer free by default, and require this bundling for all newly purchased Windows computers. Imagine that you are running a large business or educational institution – all computers would come off the shelf set up with IE. If you wanted something else, you would need authorized administrators to manually install and reconfigure every machine. Imagine you’re a consumer – you would by default be hit with IE, and would probably only migrate to something else if friends or family somehow pushed or informed you to do so.
Is this what we want? Surely it’s clear that this was both a social and economic disaster, and Microsoft’s anticompetitive practices should have been tackled much sooner.
Some competition cases are ambiguous – this one wasn’t. Microsoft has been stung appropriately.

Reuters: Microsoft’s new EU fine

Yet it is not officials that did decide this. Rather, a number of other browser providers (including Firefox) raised a case with and submitted evidence to the Competition Commission. They won the case. Microsoft was first required to support other browsers. Then it was required to provide an equal choice with at least one non-Microsoft browser.
This was a solution proposed by Microsoft, rather than proposed by officials. Microsoft was independently responsible for complying with (and maintaining compliance with) this legal requirement – which is why Microsoft was able to defy the ruling (accidentally, it claims) for over a year.
This is a rare instance of government working well.
The browser bailout was an idea invented by Microsoft itself. It was not imposed on it; it was Microsoft, who offered to do this in exchange of not being fined at the time.

So, Microsoft promised something, then later decided to break its promise. Genuine technical error or not (I don’t buy this excuse for a second!) – Microsoft broke the contract and what happens now is just the non-performance clause coming into effect. I believe that even this amount they got fined now is smaller, than they should have been – but in my opinion the EU is giving them second chance (and probably some EU commissioners suddenly became a bit richer).

Given the punishment imposed on Microsoft many are wondering why Apple (Macs) or Google (Chromebooks) are not suffering the same fate.

Apple: You can uninstall Safari from OS X any time you want. It is just an application, like any other. You can install any available browser on OS X. Plus, Apple happens to provide their software only on the hardware they sell. They do not force any third party (like an Microsoft OEM) to bundle any of their software with their hardware, because there are no third parties involved.

Google: The ChromeOS is more or less the Chrome browser itself. You can’t replace the browser, because that is all the OS you get anyway. In theory, if someone decides to write an embedded browser to run on the Linux kernel that powers ChromeOS, it would be possible to replace it. But consider the browser as part of an embedded system. You could load any other OS on the Chromebook hardware, if you know how – but we are talking about browsers here anyway.

Open Source UNIX: I will not limit it here to “Linux”, although this is what most people think when they see Open Source UNIX. Just like any other UNIX, these are modular and the OS itself does not include browser of any kind. Some come with a preinstalled third party browser, like Firefox. Some come with a GUI environment native browser like KDE’s Konqueror, some come with Opera etc. On UNIX systems, you can replace any part of the system with any other part you like, not just the browser. So there is no issue with browser choice here – in a way, you are forced to make it.

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