A similar legal dispute was settled several years ago in U.S. courts. Back then, Microsoft was accused of bundling its Web browser to squeeze out the competition. Microsoft settled the case, and a final judgment was issued on Nov. 12, 2002 by the D.C. U.S. District Court, with appeals stretching out two more years. In the interim, however, Microsoft took the browser lead over rival Netscape.
However, with regard to the European Union's competition laws, that U.S. court settlement simply does not apply, as Microsoft explained in an announcement issued on Friday.
"The Statement of Objections states that the remedies put in place by the U.S. courts in 2002 following antitrust proceedings in Washington, D.C. do not make the inclusion of Internet Explorer in Windows lawful under European Union law," the announcement reads.
The EC's action appears to follow from a complaint filed by Opera Software, as described in a press release issued in December of 2007.
"The European Court of First Instance confirmed in September [of 2007] that Microsoft has illegally tied Windows Media Player to Windows," stated Jason Hoida, Opera Software's deputy general counsel, in that press release. "We are simply asking the Commission to apply these same, clear principles to the Internet Explorer tie, a tie that has even more profound effects on consumers and innovation."
Microsoft plans to respond to the complaint in two months' time, according to a blog post. The EC will wait to hear Microsoft's response before making a determination in the case.
The European Union has a formula for imposing fines on companies that break its competition rules, which can be as high as 30 percent of the value of sales, with an option for additional infringement fines.
"The basic amount is calculated as a percentage of the value of the sales connected with the infringement, multiplied by the number of years the infringement has been taking place," the European Union explains in a summary document.
Microsoft has been including Internet Explorer with Windows since 1996. During its U.S. court proceedings, Microsoft had argued that Internet Explorer was part of the Windows operating system and couldn't be separated.
Some observers have pointed out that most companies producing Web browsers do not charge for their product, making sales calculations and talk of a browser market somewhat nebulous. However, Opera Software does get advertising revenues from the use of its browsers.
The passage of time doesn't seem to be an issue when the European Union considers imposing fines and penalties on companies for anticompetitive behavior. In February, the European Union's antitrust commission fined Microsoft 899 million Euros ($1.3 billion at the time) for its failure to comply with the EU's 2004 ruling. That case had to do with Microsoft's high fees for documentation needed to enable work-group server interoperability.
Microsoft's newest operating system, Windows 7 Beta, was released to the public earlier this month, and Microsoft is distributing a "pre-release candidate build" of IE8 Beta 2 with it, according to Microsoft's Internet Explorer blog. Whether or not Microsoft still argues that Internet Explorer is an inseparable part of its OS remains to be seen.
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