Microsoft Shifts Plan, Ties IE to Windows 7

Microsoft is canceling its plan to offer versions of Windows without the Internet Explorer browser in Europe, a move that was supposed to ease antitrust concerns.

microsoft antitrust internet explorer
The decision to scrap the browserless version of its operating system, dubbed Windows 7 E, was in response to statements made by the European Commission and feedback from manufacturers, according to Dave Heiner, Microsoft's vice president and deputy general counsel, in a blog statement titled "Windows 7 and Browser Choice in Europe" and posted late Friday.

However, Microsoft still has plans in place to offer a "ballot screen" designed to let Windows 7 users install a competing Web browser and disable Internet Explorer.

Ongoing Antitrust Negotiations

Microsoft cooked up both plans in response to antitrust concerns raised in January by the European Commission, the European Union's executive and regulatory branch. The Commission said that Microsoft is distorting competition by bundling Internet Explorer with Windows, which dominates the PC market.

On June 11, Microsoft's Heiner outlined a Microsoft plan to offer versions of Windows without Explorer.

However, the Commission did not look favorably on the idea for a browserless Windows. "Consumers should be offered a choice of browser, not that Windows should be supplied without a browser at all," the Commission said in a statement.

In a concession to the Commission's concerns, Microsoft then on June 24 announced it would offer the ballot screen plan.

The Commission said it welcomed the plan and would, "investigate its practical effectiveness in terms of ensuring genuine consumer choice."

However, even though the initial Commission reaction to the ballot screen was favorable, Microsoft said it would also continue with the Windows 7 E plan until the Commission made a final decision.

It took a week for Microsoft to change its mind. Concerns from manufacturers and business partners were key, Heiner said in his statement.

"Several worried about the complexity of changing the version of Windows that we ship in Europe if our ballot screen proposal is ultimately accepted by the Commission and we stop selling Windows 7 E," Heiner said.

"Computer manufacturers and our partners also warned that introducing Windows 7 E, only to later replace it with a version of Windows 7 that includes IE, could confuse consumers about what version of Windows to buy with their PCs," Heiner added.

So Microsoft will on October 22 ship the same versions of Windows 7 to Europe -- with the addition of the ballot screen -- that it will in other parts of the world.

Just the Latest Battle

The antitrust tussle over Explorer mirrors Microsoft's antitrust battle in Europe in 2004. The Commission at that time fined the company €497 million ($794 million), ruling that tying Media Player into Windows was anticompetitive and illegal. The Commission also made Microsoft offer a second version of Windows with the player stripped out. However, the remedy was ultimately deemed useless by many users and industry insiders because the version of Windows without the player was offered at the same price as the one equipped with Media Player -- and registered few if any sales.

The case is also similar to the one that focused on Explorer in the U.S., launched in the late 1990s. That case evolved into a broader federal antitrust suit in which Microsoft was charged and found guilty of illegally quashing competition in order to extend its operating system monopoly.

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