The European Commission has announced that it had sent a statement of objection (SO) to Microsoft Corp. The Commission believes that Microsoft’s tying of its web browser Internet Explorer to its dominant client PC operating system Windows infringes the EC Treaty rules on abuse of a dominant position. As a consequence, the EC claims, other markets of web browsers cannot compete against Microsoft’s IE, which reduces consumer’s choice.
The SO is based on the legal and economic principles established in the judgment of the Court of First Instance of 17 September 2007 (case T-201/04), in which the Court of First Instance upheld the Commission's decision of March 2004, finding that Microsoft had abused its dominant position in the PC operating system market by tying Windows Media Player to its Windows PC operating system.
The evidence gathered during the investigation leads the Commission to believe that the tying of Internet Explorer with Windows, which makes Internet Explorer available on 90% of the world's PCs, distorts competition on the merits between competing web browsers insofar as it provides Internet Explorer with an artificial distribution advantage which other web browsers are unable to match. The Commission is concerned that through the tying, Microsoft shields Internet Explorer from head to head competition with other browsers which is detrimental to the pace of product innovation and to the quality of products which consumers ultimately obtain. In addition, the Commission is concerned that the ubiquity of Internet Explorer creates artificial incentives for content providers and software developers to design websites or software primarily for Internet Explorer which ultimately risks undermining competition and innovation in the provision of services to consumers.
The Statement of Objections states that the remedies put in place by the U.S. courts in 2002 following antitrust proceedings in Washington, D.C. do not make the inclusion of Internet Explorer in Windows lawful under European Union law.
“We are committed to conducting our business in full compliance with European law. The company is also afforded an opportunity to request a hearing, which would take place after the submission of this response. Under EU procedure, the European Commission will not make a final determination until after it receives and assesses Microsoft’s response and conducts the hearing, should Microsoft request one,” Microsoft said in its statement.
If the preliminary views expressed in the SO are confirmed, the Commission may impose a fine on Microsoft, require Microsoft to cease the abuse and impose a remedy that would restore genuine consumer choice and enable competition on the merits, said the EC.
It is unclear how consumers are supposed to get competing Internet browsers if they do not have a browser built into the operating system itself.