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Microsoft broke antitrust deal, EU officials say

Company faults a technical error, may face big fine

BRUSSELS — European regulators Wednesday charged Microsoft with an antitrust violation for failing to live up to a prior agreement to give users of its Windows software better access to rival Internet browsers.

The decision by Joaquin Almunia, the EU antitrust commissioner, opens the way for Microsoft to face a potentially substantial fine for defying the terms of the antitrust settlement, reached in 2009.

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Because of what Microsoft has explained as a technical error, millions of European users of the Windows 7 SP1 version of the software may have been deprived of a greater choice of browsers between February 2011 and July 2012, the commission said in a statement.

The potential fine could be up to 10 percent of a company’s global annual revenue. In Microsoft’s case that could mean a penalty of $7 billion, but analysts say it is probably unlikely to reach that level.

The largest single fine ever levied by the European antitrust authorities was $1.4 billion in 2009 against Intel for abusing its dominance in the computer chip market. Intel is still appealing that ruling.

The significance of Wednesday’s action may go beyond Microsoft. It comes as Almunia’s office is negotiating with Google to try to settle the commission’s fears about that company’s dominance of the Internet search and advertising markets.

Legal specialists say that by cracking down on Microsoft, Almunia is also sending a warning to Google that settling its case may not be possible unless there are also effective monitoring mechanisms.

Microsoft had apologized for the infringement when it came to light in July, calling it a technical problem it had learned of only recently.

The issue for Microsoft stems from the settlement of a case concerning Microsoft’s dominance in Internet browsers — a dominance that the firm has relinquished to market forces in recent years.

In Microsoft’s 2009 settlement, the company did not pay a fine but rather committed to installing a system called Browser Choice Screen with Windows. It was intended to offer users alternatives such as Google Chrome and Mozilla Firefox to counter the strength of Internet Explorer, Microsoft’s own browser product.

In July, Microsoft blamed a technical error for failing to give users the choice of browsers it had promised.

The error affected 28 million personal computers running Windows 7 SP1, the company said in a statement.

The company said it only learned of the error when the commission sent a notification about reports it had received indicating that alternative browsers were not being offered on some personal computers.

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