Microsoft fined £484 million for browser breach

Europe’s competition watchdog bared its teeth yesterday as it slapped software giant Microsoft with a €561 million (£484m) fine for anti-competitive practices in a move seen as a warning to other multinationals.

• Microsoft fined nearly £500 million for breach of EC agreement

• Windows 7 operating system failed to offer users a choice of browser

• Fine follows £742 million settlement in 2009

The European Commission fined the firm for breaking the terms of an earlier agreement to offer users a choice of web browser, offering only its own Internet Explorer to 15 million customers who bought devices with Windows installed from May 2011 until July 2012.

The agreement followed a 2009 settlement in which Microsoft paid €860m and promised to mend its ways.

The commission’s top regulator, Joaquin Almunia, said: “If companies agree to offer commitments which then become legally binding, they must do what they have committed to do or face the consequences.

“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.”

However, while the sanction is equivalent to about 1 per cent of Microsoft’s 2012 fiscal year revenues, the commission could have charged the company up to 10 per cent of its global revenue.

Microsoft said it took full responsibility for the incident, which it has blamed on a technical error. The board cut chief executive Steve Ballmer’s bonus last year partly as a result.

Microsoft did not say whether it would challenge the ruling, but it is not expected to do so.

The charge will be carefully noted by Google, which is involved in a dispute with the commission over how it ranks search engine results.

Google is under pressure to offer concessions to prevent the regulator moving to the next stage in the case, which could involve fines.