Microsoft may finally see the end of the tunnel in its nearly two-year long battle with the European Commission regarding bundling Internet Explorer with Windows. At the same time, it is also close to settling complaints that it needs to provide more interoperability information for other products, including Office.
Microsoft (NASDAQ: MSFT) recently submitted an updated plan aimed at giving European Union (EU) users a wider choice of browsers in an attempt to settle the complaint, which was filed by Norwegian browser maker Opera in late 2007.
Now, it’s time for the rest of Europe to weigh in.
“The European Commission will on Oct. 9, 2009, formally invite comments from consumers, software companies, computer manufacturers and other interested parties on an improved proposal by Microsoft to give present and future users of the Windows PC operating system a greater choice of web browsers,” the EC said in a statement released overnight.
Anyone who wants to comment on the proposal has 30 days to do so beginning Friday.
At the heart of any settlement will be providing users with a so-called “ballot screen” that will be displayed the first time a new PC is turned on, asking the user to choose among a list of available browsers.
Microsoft initially made the offer of a ballot screen in July in an attempt to defuse the EC’s view that abuse of its dominant position in the operating system market has also allowed it to dominate the browser market since 1996.
The EC requested changes — for instance, providing more information on the individual browsers. Competitors, including Opera, Mozilla and Google, also commented.
Under the revised proposal, Microsoft agreed to make the ballot screen available in the European Economic Area for five years through its Windows Update system. It will be available for Windows XP and Vista, as well as Windows 7, which is set to launch on October 22.
“Consumers in Europe will receive, shortly after they get a new PC or install Windows 7, an update that will be delivered to them over the Internet via Windows Update, and it is that update that will launch the code that will display this consumer choice screen or ballot screen,” Microsoft General Counsel Brad Smith said on a conference call early Wednesday morning. Microsoft also moved the icon for Internet Explorer (IE) out of the first spot.
Additionally, Microsoft volunteered last summer to release a similar ballot screen to give Office users the choice at the first start up whether to use OpenDocument Format (ODF), or Microsoft’s native Open XML document format. The company will also continue to update its support of ODF for 10 years.
Microsoft also committed to provide developers and competitors other interoperability information, such as programming interfaces for Windows’ security functions, over that period.
Smith was generally upbeat about what could still be a very costly settlement, both in terms of fines and lost market share. However, neither Microsoft nor the EC has mentioned anything about fines and other penalties so far.
In an earlier case that dates back to a 2004 ruling that Microsoft had abused its position in media players and departmental servers, the EC has already collected nearly a billion dollars in fines and interest, while Microsoft is contesting a further fine of approximately $1.35 billion.
Several analysts see the latest step as a positive move for both the EC and Microsoft, as well as European consumers.
“It’s good news for people in Europe because you should be able to download the latest bits for the browser,” Rob Enderle, principal analyst at the Enderle Group, told InternetNews.com.
The deal is also good for European OEMs, who have been worried that they might miss out on the holiday sales spree they hope will follow the launch of Windows 7 if Microsoft couldn’t come to a settlement with the EC.
Analysts said that making sure that the Windows 7 launch goes smoothly was obviously driving much of Microsoft’s thought processes.
However, the deal could also help the EC’s image.
“With the launch of Windows 7, it was critical for the EC to show that they weren’t being an impediment to business in general, rather than being the group that says ‘No,'” Charles King, principal analyst at Pund-IT, told InternetNews.com. King was referring to other recent EC actions against Intel and Oracle.
Relations seem generally to have warmed in recent months between the software titan and the EC’s competition directorate.
In mid-September, Microsoft went so far as to confer with the EC regarding its proposed search deal with Yahoo, even though it is still not clear that was required.
Perhaps not surprisingly, Microsoft’s Smith hailed the emerging settlement as “the single biggest legal commitment in the history of the software industry.” He also said that Microsoft had made approximately 20 changes to its proposal since it first fielded the offer in July.
“There remains one last step in the formal process to finalize the complete settlement of these issues, and we hope to take that last step before the end of the year,” Smith added.
Still, there are plenty of reasons for Microsoft to not become complacent at this point.
“It the market test doesn’t raise other browsers’ market share, the EC may insist on other changes,” Matt Rosoff, a research vice president at Directions on Microsoft, told InternetNews.com.
