November 12, 2012
To settle the antitrust action brought by the European Commission over its Internet Explorer browser, Microsoft agreed to modify the way in which its browser was presented to users. The Commission recently concluded that Microsoft has failed to comply fully with the terms of that settlement. Non-compliance could result in major penalties for Microsoft.
The European Commission originally acted against Microsoft because the Commission determined that Microsoft used its dominance in the computer operating system market to benefit its browser in competition against browsers provided by other parties. The action by the European Commission paralleled action taken by antitrust authorities in the United States.
To remedy the situation, the Commission required Microsoft to modify the way its browser was presented to users. Microsoft agreed to offer users a clear and easy to use choice screen enabling them to identify and select among multiple browser. The settlement agreement required Microsoft to offer consumers a meaningful choice of browsers.
Microsoft agreed to introduce the modified browser selection system as it released new versions of its operating system and browser. The Commission claims that Microsoft has failed to introduce adequate modifications. Accordingly, the Commission is now considering sanctions.
This dispute illustrates the open-ended nature of antitrust oversight in the information technology sector. Final actions in information technology antitrust cases are rarely ever really final. Instead, they are part of continuing oversight by authorities which extends over many years.
Once a formal antitrust action has been initiated, a long-term oversight process is launched. In effect, antitrust action creates a form of continuing regulatory jurisdiction and review over the operations and practices of the defendant company.
Information technology businesses which become the target of antitrust investigations in any jurisdiction should recognize that these cases are not single incidents that can be fully resolved in a discrete period of time. Instead, they should assume that the antitrust cases are only the first step in a regulatory oversight process which will likely last indefinitely into the future, and they should plan accordingly.