The European Commission today handed down a $732 million fine against Microsoft for failing to adequately comply with its browser ballot order.
The EU said Microsoft did not display the browser ballot to those who installed Windows 7 Service Pack 1 between May 2011 and July 2012, meaning 15 million European Windows users did not see it.
Officials calculated the fine based on the gravity and duration of the infringement and the need to ensure a deterrent effect, taking into account the fact that Microsoft cooperated with the commission's investigation.
This is the first time the EU has handed down a fine against a company for not complying with a directive. "Commitment decisions are a very important tool in the EU antitrust enforcement system," Joaquín Almunia, vice president of competition within the EU, said in a statement. "Decisions of this type – so-called art 9 Decisions - can be a good way to solve antitrust concerns swiftly since they avoid lengthy proceedings."
"We take full responsibility for the technical error that caused this problem and have apologized for it," Microsoft said in a statement. "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."
The controversy dates back to 2009, when the European Commission announced that Microsoft violated European competition law by bundling its Internet Explorer browser with Windows. As a result, Microsoft said it would ship a version of Windows 7 with a "browser ballot" that would allow users to select which browser they wanted during the OS installation process. The EU approved that plan in Dec. 2009 and it started rolling out two months later.
Last year, however, the commission notified Microsoft that it had received reports of people not seeing the browser screen choice (BCS). Microsoft said it investigated and discovered that users of Windows 7 service pack 1 were not seeing the browser ballot due to a technical error. A fix started rolling out to PCs running Windows 7 SP1 in early July.
But the EU opened an investigation, and by October, regulators sent Microsoft a formal statement of objections.
"Of course, the browser market has evolved a lot since [2009] - and fortunately so," Almunia said today. "Users can now easily choose, download and install the browser they prefer, which was precisely the objective of the Commission. Easy access to different browsers encourages companies to continue to innovate to provide users with the best products."
"I hope this decision will make companies think twice before they even think of intentionally breaching their obligations or even of neglecting their duty to ensure strict compliance," he concluded.
Editor's Note: This story was updated at 10:55 a.m. Eastern with comment from Microsoft.