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Summary:

EU competition commissioner Joaquin Almunia has indicated that formal antitrust proceedings are almost certain in the case of Microsoft, and pretty likely with Google too. In both cases, fines could run into the billions.

Lawsuit legal gavel

So… about that “technical error” that led to Microsoft blatantly disregarding the terms of its browser choice settlement with the EU. As of today, it looks like this little slip-up will lead to formal charges after all.

To briefly recap, Microsoft had agreed to implement a browser choice screen for those firing up fresh copies of Windows, so that it wasn’t breaking antitrust law by steering users towards Internet Explorer. It did this for a while, but then it turned out that Windows 7 Service Pack 1 wasn’t serving up the screen in question. In July the European Commission said it was investigating, and Microsoft quickly confessed and apologised.

Now it seems competition commissioner Joaquin Almunia is about to take things to the next level. According to Reuters, he told a competition forum in Warsaw on Thursday that “the next step is to open a formal proceeding into the company’s breach of an agreement”.

“We are working on this,” Almunia said. “It should not be a long investigation because the company itself explicitly recognized its breach of the agreement.”

Actually, it seems he went slightly off-script with that statement. In the official “check-against-delivery” release of the speech, the commissioner said his office was “now considering the next steps”. When I rang them today, a representative of that office refused to confirm or deny that formal charges were lined up, but then again Europe’s antitrust authorities are sticklers for procedure (they have to be if they want to avoid being sued), so that wasn’t terribly surprising.

Just as a reminder: Microsoft may have to pay up to 10 percent of its annual global turnover for this technical faux pas. That’s somewhere in the region of $7bn.

Another U.S. firm that Almunia has in his sights — also with the potential of a gargantuan fine — is Google, which faces multiple accusations of rigging its search results to shut out rivals, copying results from other providers and unfairly locking its ad customers into exclusivity.

Over the past couple of year, there have been periodic reports suggesting that a settlement between Google and Almunia’s office was on the cards. If so, it seems a way off – the commissioner said on Thursday that formal proceedings could still take place.

“If remedies offered by Google can eliminate our concerns, we will succeed in reaching an agreement. Otherwise, the legal road is a long one,” Reuters quoted Almunia as saying.

To put all this in context, the commissioner was trying to point out to his audience that he was being just as harsh on non-EU companies operating within the union as he was to those based there.

“When it comes to implementing competition law, a good authority must be blind to where the headquarters of a firm are located or how much influence it has on world markets,” Almunia said. “This is crucial if we are serious about protecting the interests of all European citizens and I imagine it is also quite reassuring for investors to know that we treat all companies alike.”

  1. Anything to prop up the euro

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  2. Can someone explain, trying to understand, how Apple isn’t targeted for not allowing a choice on its operating system iOS? For example it doesn’t give a choice to make a different browser a default.. Thx

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