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EU fines Microsoft $733 million over browser

Almunia

– The European Union has fined Microsoft $733 million for breaking a pledge to offer personal computer users a choice of Internet browsers when they install the company’s flagship Windows operating system.

The penalty imposed by the EU’s executive arm, the Commission, is a first for Brussels: no company has ever failed to keep its end of a bargain with EU authorities before.

In 2009, Microsoft Corp. struck a broad settlement with the Commission to resolve disputes over the company’s abuse of the dominance of Windows, which had spanned more than a decade.

Back then, the company agreed to pay $1.1 billion and promised to give Windows users the option of choosing another browser rather than having Microsoft’s Internet Explorer automatically installed on their machines.

But Microsoft failed to stick to the deal for some 15 million installations of Windows 7 software in Europe from May 2011 until July 2012. The company admitted the failure last year, adding that it was a mistake.

The Commission’s top competition regulator, Joaquin Almunia, said at a press conference in Brussels on Wednesday that the fine reflected the size of the violation and the length of time it lasted.

It was also intended to make an example of Microsoft and deter other companies from doing same thing. In theory, the Commission could have fined Microsoft up to 10 percent of its global annual sales during the period the violation took place.

“A failure to comply is a very serious infringement that must be sanctioned accordingly,” Almunia said.

For its part, Microsoft was apologetic.

“We take full responsibility for the technical error that caused this problem and have apologized for it,” the company said in a statement. “We provided the Commission with a complete and candid assessment of the situation, and we have taken steps ... to help avoid this mistake – or anything similar – in the future.”

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