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Microsoft hit with €561 million fine

Microsoft hit with €561 million fine

Microsoft's Browser Choice Screen glitch in Windows 8 has cost the company dearly, with the EU handing down a €561 million fine.

Microsoft has been fined a whopping €561 million fine by the European Union after failing to adhere to anti-monopolistic agreements put in place regarding the company's Internet Explorer browser.

When Microsoft's next-generation Windows 8 operating system launched, it did so without the 'Browser Choice Screen' that allows users to pick an alternative web browser to the bundled Internet Explorer - something the European Union had demanded of the company. While Microsoft apologised for what it claimed was a technical error, the EU was unimpressed and filed a formal complaint against the company.

That complaint became an investigation, and the investigation has now become a ruling that will see Microsoft forced to hand over €561 million in cash to the EU by way of apology - despite putting things right as soon as it had received the complaint, which was based on agreements made by Microsoft to the EU back in 2009.

While the fine is pretty hefty, it could have been worse: the EU's anti-monopoly regulations allow for a fine of up to 10 per cent of a company's annual turnover in such events - and with Microsoft having published a $18 billion revenue for the last financial year, that could have meant a €1.38 billion hit to the company's coffers.

Microsoft, for its part, has stated that it has no intention of appealing the EU's ruling. 'We take full responsibility for the technical error that caused this problem and have apologised for it,' a company spokesperson claimed in a statement to press. 'We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future.'

30 Comments

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Griffter 7th March 2013, 11:02 Quote
i guess M$ will have to take that amount out of their excess money we will never have time to use up budget.
neocleous 7th March 2013, 11:18 Quote
Don't apple do the same with Safari? Why aren't they fined to hell and back?
Lance 7th March 2013, 11:30 Quote
So where will this come from?

Well that's easy it will hit the consumer in the form of increased prices. Cheers EU, another nice service you've done me, because I didn't already know how to download another internet browser.

Well at least the rural french farmers who don't own PC's will be better off.
Gareth Halfacree 7th March 2013, 11:31 Quote
Quote:
Originally Posted by neocleous
Don't apple do the same with Safari? Why aren't they fined to hell and back?
Because to be a monopoly, you have to have the exclusive possession or control of the supply or trade in a commodity or service. Microsoft holds the overwhelming majority market share of personal computer operating systems, putting it at risk of being a monopoly. Apple, on the other hand, has less than 10% of the desktop and laptop market - but a much larger chunk of the mobile market - meaning it cannot be, by definition, a monopoly.

(Technically, Microsoft can't be a monopoly either, as there is competition - but the Monopolies Commission and other similar organisations target companies that are at risk of becoming monopolies rather than just ones that have already become a monopoly, in the same way that conservation organisations concentrate on animals that are at risk of becoming extinct rather than the ones for whom it's a little late to sign a petition.)
neocleous 7th March 2013, 11:37 Quote
Quote:
Originally Posted by Gareth Halfacree
Because to be a monopoly, you have to have the exclusive possession or control of the supply or trade in a commodity or service. Microsoft holds the overwhelming majority market share of personal computer operating systems, putting it at risk of being a monopoly. Apple, on the other hand, has less than 10% of the desktop and laptop market - but a much larger chunk of the mobile market - meaning it cannot be, by definition, a monopoly.

(Technically, Microsoft can't be a monopoly either, as there is competition - but the Monopolies Commission and other similar organisations target companies that are at risk of becoming monopolies rather than just ones that have already become a monopoly, in the same way that conservation organisations concentrate on animals that are at risk of becoming extinct rather than the ones for whom it's a little late to sign a petition.)

I completely accept that definition but Apple won't even let me change the default browser on my iPhone surly that is worse than Microsoft bundling IE with Windows and like you said Apple's market share in the mobile sector is considerable
Gareth Halfacree 7th March 2013, 11:41 Quote
Quote:
Originally Posted by neocleous
I completely accept that definition but Apple won't even let me change the default browser on my iPhone surly that is worse than Microsoft bundling IE with Windows and like you said Apple's market share in the mobile sector is considerable
True, but still well below monopolistic levels: that same Wikipedia link points to a 55% share for iOS devices.

As to why the EU hasn't investigated the inability to change the default browser on the iPhone, there are several possibilities. Off the top of my head:
1) It hasn't received a complaint from an EU-based rival company yet.
2) Traditionally, mobile phones have never allowed you to change the stock browser. Thus, it could be argued that Apple isn't stopping you from changing your browser, but that other platforms like Android are allowing you to change your browser as an added value feature that iOS lacks.
3) 55%, while a majority share, is still a long way away from threatening exclusive control of the mobile OS market.
aramil 7th March 2013, 11:54 Quote
There is a difference I can buy an Apple ios phone or a samsung android/windows phone but not an apple android/windows or samsung ios phone.

When I buy a pc buy any manufacturer I can choose differing OS, s.
ChromeX 7th March 2013, 11:59 Quote
This is such a stupid ruling! I'm not a Microsoft fan by any stretch of the imagination, but if I want to change my browser I am totally free to do so; Microsoft have never tried to stop me or make the installation of anything else even a slight hassle. Most people who use windows are going to be officer users and people like my mum and gran at home who don't really give a **** what browser they use, just so long as they can send an email or two and mess on facebook. Those who want a little more are completely at their leisure to install an alternative!
neocleous 7th March 2013, 12:04 Quote
Quote:
Originally Posted by ChromeX
This is such a stupid ruling! I'm not a Microsoft fan by any stretch of the imagination, but if I want to change my browser I am totally free to do so; Microsoft have never tried to stop me or make the installation of anything else even a slight hassle. Most people who use windows are going to be officer users and people like my mum and gran at home who don't really give a **** what browser they use, just so long as they can send an email or two and mess on facebook. Those who want a little more are completely at their leisure to install an alternative!

I agree and I think if you are going to do a ruling for one it should be for all, MS getting fined because they are the biggest doesn't seem right.

It should be a blanket ruling the first time you open the default browser on any device on any system it asks you if you want to keep using it or get another.
theshadow2001 7th March 2013, 12:23 Quote
No doubt the bean counters will have some way of making this a tax write off. Or use some other standard corporate accounting ****ery in order to turn this fine into some benefit for the company. Once all the funny accounting is done it will probably end up as a tiny cost out weighed by the benefits of having more people using Internet Explorer.
runadumb 7th March 2013, 12:26 Quote
This sounds like a pure money grab by the EU. I would love to see where exactly this money is going.

I'm no big corporate shrill but that is an incredibly aggressive ruling, even knowing it could have been more.
rollo 7th March 2013, 12:28 Quote
Apples market share on phones is below 25%, mac + laptop is at 10%, even there tablet share is now only 68% nothing like microsofts 88% desktop pc market share.

Microsoft had to keep apple in business to stop the company getting split up back in the day.

If andriod hit 90% market share for example the eu commisioners would look into it and probably look at splitting it up from google.

It's why most companies don't push for high market share as the commission board don't look kindly on it.

Even googles search engine does not have the market share ms does in the pc sector.
aramil 7th March 2013, 12:32 Quote
It has more to do with the fact Microsoft had said they would include the browser choice screen and then forgot to include it in the update service pack.... as they had previously agreed.

Self inflicted really.
Xir 7th March 2013, 13:58 Quote
Calm down, it's not new, it's just that the EU takes a long, long time.
When the case started (what, a decade ago?), IE had just massacred Netscape, and there really wasn't an alternative (they came out later.)
By the time the EU forced MS to something though, there was plenty competition about, and not doing bad either.
Actually Microsoft has been obliged to do this sind XP SP...errr 2 or 3, then 7 and yes, they've conveniently "forgot" to include it a couple of times before.
schmidtbag 7th March 2013, 16:35 Quote
Quote:
Originally Posted by ChromeX
This is such a stupid ruling! I'm not a Microsoft fan by any stretch of the imagination, but if I want to change my browser I am totally free to do so; Microsoft have never tried to stop me or make the installation of anything else even a slight hassle. Most people who use windows are going to be officer users and people like my mum and gran at home who don't really give a **** what browser they use, just so long as they can send an email or two and mess on facebook. Those who want a little more are completely at their leisure to install an alternative!

I completely understand why you're thinking the way you do, but I think you underestimate the stupidity of the general public. People are gullible and ignorant - they will do whatever is either conveniently in front of them, whatever they're told to do, and/or whatever they are familiar with. Since Microsoft gained so much popularity, whatever Windows is shipped with is bound to get a massive amount of users. Why else do you think one of the worst web browsers in existence gained so much popularity? Why do you think the crappiest presidents end up getting elected? Why do you think the most terrible music ends up on the top 50 lists? These all apply to the same reasons.

As for people like your mother who don't give a **** what browser they use, that's exactly where the problem falls as being anticompetitive - your mother won't ever be (or attempt to be) exposed to what could be better, and therefore leaves other products in the dust, which in turn makes MS a monopoly. It isn't fair for developers who put good work into something that is deliberately pushed aside.
mikemaher205 7th March 2013, 18:08 Quote
I wonder how many people in the EU have had the browser choice window come up and get annoyed at a stupid pop-up? Well done EU, you've just undermined the intelligence of your people and caused a likely increase in Microsoft prices.

EU... GFY.
Corky42 7th March 2013, 18:11 Quote
Forgive my ignorance, but isn't KB976002 the Browser Choice update installed by default through windows update ? i never install it myself so IDK.
YEHBABY 7th March 2013, 20:33 Quote
Quote:
Originally Posted by Xir

Actually Microsoft has been obliged to do this sind XP SP...errr 2 or 3, then 7 and yes, they've conveniently "forgot" to include it a couple of times before.

I wondered if they conveniently "forgot" to include it or if it was a genuine mistake. If it was a mistake I bet whoever was responsible got their marching orders.
rollo 7th March 2013, 20:34 Quote
Forgot or mistake result is the same one fired person one fine.
schmidtbag 7th March 2013, 20:41 Quote
Quote:
Originally Posted by rollo
Forgot or mistake result is the same one fired person one fine.

Forgetting something is a mistake, and you get fired for big mistakes. But I'm leaning toward someone "forgetting" (meaning, intentionally forgetting) because based on how the article is worded, it seems like MS was fully aware of their "mistake". I think the problem is MS didn't expect Windows 8 to be such a failure, so they probably didn't bargain the loss was going to take such a hit.

If what I say is true it's a shame MS doesn't pay their employees more (or at least charge less for their products), on the other hand, I've known former MS employees who were more than wealthy.
PingCrosby 7th March 2013, 20:51 Quote
God, I forget one lousy ' browser choice screen ' and there's hell on, (don't tell em it was me ok)
Woodspoon 7th March 2013, 21:52 Quote
Hmm, just done a W7 re install, clicked on IE to go and download Chrome and the first thing it did was ask me what browser I would like to use and downloaded it before I could do anything else.
No pop up on install, but I was asked for a choice as soon as I clicked on IE.
As long as the choice is there and made obvious before you do anything, I see no problem.
yodasarmpit 7th March 2013, 22:27 Quote
The original ruling was disgusting, absolutely disgusting.
Microsoft have NEVER prevented anyone from installing their browser of choice, and they allow that browser to be set as default.

However, MS agreed to make changes and then reneged. Still don't agree with it though.
dancingbear84 8th March 2013, 00:09 Quote
As a geek I don't see what all the fuss is about, but then i don't "get" people who buy a PC from PC world. Or have a phobia to inserting a stick of RAM.
I just assumed everyone went oooh Windows, right fire up IE, download chrome or FF. Shut down IE and hide the icons for ever. Change defaults.
Bask in the glow of a proper browser burning into your eyeholes.
RichCreedy 8th March 2013, 13:13 Quote
what I would like to see is Microsoft refusing to supply a browser installed with the os in eu countries, and then not have to supply the browser choice.

let customers figure out how to get a browser, without one being installed by Microsoft (OEMs)
aramil 8th March 2013, 13:37 Quote
Quote:
Originally Posted by RichCreedy
what I would like to see is Microsoft refusing to supply a browser installed with the os in eu countries, and then not have to supply the browser choice.

let customers figure out how to get a browser, without one being installed by Microsoft (OEMs)

Lol. Not sure that would be in their interest. As it would just make manufactures install a 3rd party browser install selection screen on first boot or even worse just bundling a third party browser with no IE.... would not help their market share.
RichCreedy 8th March 2013, 13:51 Quote
make it a condition that no browser can be installed by oem on windows machine, customer has to find their own. watch all the magazines put cds/dvds back on covers with browsers
Xir 8th March 2013, 14:28 Quote
Quote:
Originally Posted by YEHBABY
I wondered if they conveniently "forgot" to include it or if it was a genuine mistake.
It's not the first time they "forgot" so... ;)
bagman 10th March 2013, 12:38 Quote
This is just stupid. Back in vista and XP days microsoft didn't have choose your own browser rubbish so why should they now? (I guess the 'competition' are scared because IE is actually usable these days). They have never stopped you from putting on your own browser so whats is the problem?
Xir 11th March 2013, 14:06 Quote
You've not read the thread, it's "because" they didn't have it back then they were obliged to
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