Microsoft Chairman Bill Gates sitting on stage during a video portion of the Windows 95 Launch Event, on the company's campus in Redmond, Washington. (AP)
BRUSSELS — The European Union is dropping antitrust charges against Microsoft after the company agreed to give Windows users a choice of up to 12 other Web browsers.
Under the terms of the deal with regulators, Microsoft will avoid further EU fines if it provides a pop-up screen that lets European users — from March — replace Microsoft's Internet Explorer or add another browser such as Mozilla's Firefox or Google's Chrome.
This will also allow computer manufacturers to ship PCs without Internet Explorer in Europe.
Neelie Kroes, the EU's competition commissioner, said it was an "early Christmas present for more than hundreds of millions of Europeans" who stood to benefit from having "effective and unbiased choice" between Microsoft's Internet Explorer and competing browsers.
"The (European) Commission has resolved a serious competition concern for a key market for the development of the Internet," she told reporters.
"It is as if you went to the supermarket and they only offered you one brand of shampoo on the shelf, and all the other choices are hidden out the back, and not everyone knows about them," she said. "What we are saying today is that all the brands should be on the shelf."
Microsoft general counsel Brad Smith said the company was pleased with "final resolution of several long-standing competition law issues in Europe" and looked forward to building "on the dialogue and trust that has been established between Microsoft and the Commission."
Microsoft is not out of the woods yet though, as it was warned it can still be fined up to 10 percent of yearly global turnover without regulators having to prove their case if it doesn't stick to this commitment for the next five years.
The deal comes after more than a decade of EU antitrust action against the world's biggest software company that has already seen it pay euro1.7 billion in fines.
Kroes also warned that she was still looking at complaints from software rivals that the company wasn't sharing key information that help others make products compatible with Microsoft software.
In January, the EU charged Microsoft with monopoly abuse for tying its browser, Internet Explorer to the Windows operating system software used on most desktop computers — this, they said, was an "artificial distribution advantage" that rivals didn't have.
Kroes said since Internet Explorer was present "on virtually every PC in Europe," a lot of Internet content was specially adapted to Internet Explorer. Other software makers complain that this caused technical problems that made it hard to use other browsers.
The EU said Monday that a pop-up choice screen would eliminate those concerns when it is downloaded as an automatic update to all users of Windows XP, Windows Vista and Windows 7 in Europe who have Internet Explorer set as their default browser. Other users will be asked if they want it.
The choice screen will list the 12 most-widely used Web browsers running on Windows — listing five prominently. Users can pick and download one or several of them, choosing from Apple's Safari, Chrome, Internet Explorer, Firefox, Opera, AOL, Maxthon, K-Meleon, Flock, Avant Browser, Sleipnir and Slim Browser.
Some 100 million computers will likely display the screen by mid-March and around 30 million new computers will show it over the next five years, the EU said.
People can keep Internet Explorer if they want — but they will for the first time be exposed to other browsers, providing a massive new audience to many smaller browser makers. The choice of browsers will be updated every six months on the basis of several independent sources of market share information.
Microsoft will report back regularly to the European Commission, starting in six month's time, on how the rollout of the screen is going — and could make changes if the EU asks. The EU is also able to review the entire deal at the end of 2011.
Microsoft will also provide more information to help software developers make products compatible with Windows, Windows Server, Office, Exchange and SharePoint and will publish what the EU says is an "improved version" of an offer that Microsoft first made in July.
The EU says it is still investigating whether Microsoft is holding back some of the key data that developers need to make products that work with its software.
Regulators said they welcomed Microsoft's move but that the offer was still "informal" and wouldn't end their probe. But they offered some hope saying they would "carefully monitor the impact" of the deal on the market.
Thomas Vinje, a lawyer for browser company Opera and the European Committee for Interoperable Systems, said it was "not yet clear" that Microsoft's offer would create "a more level competitive playing field where open source software is not subject to Microsoft patent fear uncertainty and doubt."
Vinje helped file the complaints to EU regulators that triggered the investigations into Microsoft's browsers and interoperability sharing.
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