Microsoft Concessions May Settle EU Antitrust Cases

Microsoft Corp., the world’s largest software maker, made concessions to settle two European Union antitrust trust cases by agreeing to give consumers more information about Web browsers and about how competitors’ products work with the company’s Word and Excel programs.

The proposed accord addresses EU concerns that computer users didn’t have a real “choice between Internet Explorer and competing Web browsers,” the European Commission said in a statement. Microsoft’s Windows operating system would present users with a screen explaining Web browsers and include a choice of rival browsers, the EU said.

EU Competition Commissioner Neelie Kroes, 68, whose five- year terms expires this month, is trying to resolve years of conflict with Microsoft by settling the two antitrust cases by the end of the year. Microsoft, which has been fined 1.68 billion euros ($2.39 billion) in previous EU antitrust probes, would avoid another penalty with the settlement.

“I’m absolutely of the opinion that this is a trustful deal that we’re making. I trust Microsoft,” Kroes told journalists today in Brussels, adding that she’s been in contact with Microsoft Chief Executive Officer Steve Ballmer. “There can’t be a misunderstanding. Here is the final result of a long discussion over a long period.”

Microsoft General Counsel Brad Smith told journalists on a conference call that the commission’s announcement is a “big step” toward resolving differences with the EU. He said he expects to reach a final deal by year’s end.

“It’s very important for us to resolve the competition law issues that have been on the agenda for more than a decade,” Smith said.

‘Improvements’

The commission first levied a 497 million-euro fine against Microsoft in March 2004 for abusing its Windows dominance in network data and for tying its media player to the operating system. An EU court upheld the decision in 2007.

Redmond, Washington-based Microsoft in July accepted a key EU demand that it give consumers a choice of browsers through a so-called ballot screen. Under the settlement, consumers who buy new personal computers will be given a choice of the 12 most widely used browsers to install in addition to, or instead of, Microsoft’s Internet Explorer, the commission said.

The agreement, which would last five years, would allow PC makers to install competing Web browsers, set them as a default program and to disable Internet Explorer, the EU said.

Default Browser

The commission will publish the settlement plan on Oct. 9 in its Official Journal and rivals and consumer groups will have a chance to offer comments before the regulator makes the agreement legally binding.

Microsoft also made “further improvements” to its offer to disclose information that would allow competing word- processing and spreadsheet products to function more smoothly with its Word and Excel programs, the commission said.

The offers followed the EU’s decision to send Microsoft its formal “statement of objections” in the browser case in January. The interoperability proposals result from a complaint by a group representing International Business Machines Corp., Sun Microsystems Inc. and seven other companies in February 2007.

(Published by Bloomberg - Ocotober 7, 2009)