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Saturday, January 17, 2009, 03:25 pm PT (06:25 pm ET)

Europe revives claims of Microsoft web browser monopoly

Having escaped more severe consequences in the US, Microsoft has been put on notice by the European Union that it may have to detach Internet Explorer from Windows under claims that the web browser has an unfair monopoly.

The European Commission's Statement of Objection, delivered on Friday, gives Microsoft an early warning that the EC believes the company has abused its monopoly by linking Internet Explorer deeply with its operating system, preventing competitors from easily offering their own alternatives and giving the browser a de facto lead by including it with Windows PCs, which currently have about 90 percent of the world market.

The current situation "distorts competition on the merits between competing web browsers insofar as it provides Internet Explorer with an artificial distribution advantage which other web browsers are unable to match," the organization says in its confirmation of the statement. "The Commission is concerned that through the tying, Microsoft shields Internet Explorer from head to head competition with other browsers which is detrimental to the pace of product innovation and to the quality of products which consumers ultimately obtain."

Europe's continent-wide legal body also argues that, competition aside, the sheer "ubiquity" of the browser often pushes website owners and app programmers to build content optimized mostly or exclusively for Internet Explorer and thus limits the number of features users can get on web pages or in software.

EC officials support the argument by directly pointing to their own findings: in 2004, Microsoft was fined nearly $690 million for allegedly stifling competition in jukebox software by bundling Windows Media Player with Windows. The decision ultimately forced the American company to sell an operating system version known as "Windows XP N" that strips out the media software.

Microsoft in its formal response also reveals that it was told that the changes it made in the wake of a 2002 US antitrust ruling on the same subject, such as adding a control panel to change the browser default and to let PC makers preload outside software, aren't enough to make Internet Explorer's status legal in Europe.

The finding isn't an absolute conclusion but gives Microsoft just eight weeks to formally respond to the claims. It can also request a hearing to publicly confront the charge after the roughly two-month span is over.

If the Commission decides against Microsoft, it could exact one or more punishments that could include levying another fine, forcing the company to "cease the abuse" or any other step the agency feels would help level the playing field.

Microsoft has so far taken a cautious approach to the objection and only says it plans to obey European law, though it has fought previous EC cases.

The potential action against Microsoft arrives despite the software firm losing market share to challengers in studies by web trackers at Net Applications who note that Internet Explorer has dipped below 69 percent share while Firefox has crested 21 percent and Apple's Safari has jumped to near 8 percent.