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Shareholder sues Microsoft over IE browser choice fine

Microsoft

By Reuters

Posted on 14 Apr 2014 at 08:22

Microsoft's board faces a lawsuit over failing to show the browser choice screen in Internet Explorer, earning a record-breaking $731 million fine by European antitrust regulators.

Microsoft was forced to give users a choice of browser, after EU regulators took issue with Windows being bundled with Internet Explorer on competition grounds.

The lawsuit, brought by shareholder Kim Barovic in federal court in Seattle, charges that directors and executives, including founder Bill Gates and former CEO Steve Ballmer, failed to manage the company properly and that the board's investigation was insufficient into how the miscue occurred.

The legal action is the first to emerge from a humiliating episode for Microsoft, which the software company has never fully explained and has accounted for only as a "technical error."

Its investigation found that updated software issued between May 2011 and July 2012 meant that 15 million users were not given a choice. It was the first time the European Commission, the EU's antitrust authority, handed down a fine to a company for failing to meet its obligations.

In her lawsuit, Barovic says she asked Microsoft's board to fully investigate how that mistake occurred and to take action against any directors or executives that had not performed their duties. She said Microsoft replied that it found no evidence of a breach of fiduciary duty by any current or former executives or directors.

In a statement, Microsoft repeated that stance.

"Ms. Barovic asked the board to investigate her demand and bring a lawsuit against the board and company executives," said an emailed statement from Microsoft. "The board thoroughly considered her demand as she requested and found no basis for such a suit."

The problem on European computers prevented the so-called "ballot" screen from appearing. Sources close to the company have said it was connected to updated Windows 7 software.

Ballmer, who was CEO at the time, and Steven Sinofsky, then the head of the Windows unit, both had their bonuses cut in 2012 after the error came to light.

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User comments

Utter nonsense

The whole browser choice thing is a farce.

Why MS ever had to do this is beyond me.

These days I continually find people using Chrome, NOT through choice but because it's been snuck onto the PC by some other software and been set as the default browser.

They don't even know whether they are using IE, Firefox or Chrome and frankly, they don't care.

By Grunthos on 14 Apr 2014

Why not sue Ford for chucking in footmats when you buy a car?

After all, Halfords sell footmats.

Maybe the EU should force all cars to be sold with a "choose your footmat" sticker on the inside of the driver's side windscreen?

After all, not doing so would stifle competition....

By cheysuli on 14 Apr 2014

I Agree

And the Opera, the original complainant, who managed to convince Nellie Kroes that there wasn't competition in the browser space and MS had an unfair monopoly, still has a pathetically low share of the browser market because of, irony of ironies, strong competition from the likes of Chrome, Firefox, Safari et al. Still at least it pays for all those EU commissioner expenses, so the money has gone to a good cause!!

By rjp2000 on 14 Apr 2014

And isn't it funny that

Apple have never been forced to do something similar on the dominant iPad!

By rjp2000 on 14 Apr 2014

And isn't it funny that

Apple have never been forced to do something similar on the dominant iPad!

By rjp2000 on 14 Apr 2014

No Browser choice on iOS or OSX

As per rjp2000's comment.
No browser choice prompt on iOS, OSX or Linux for that matter.
The whole browser choice issue was an utter irrelevance for all but the hard core anti "M$" brigade - and it was a complete PITA in a locked down corporate environment.

By mfoggin on 14 Apr 2014

Come and gone...

the reason why iOS, OS X and Linux never had to have the browser choice was that they never owned 90%+ of the market, as Windows did.

When the complaint was brought, it was valid. By the time the punishment was dealt out, it was questionable, whether it still made sense, when the "error" occured there was no reason for it still to be in place and today even less so.

There was a very brief period where Safari on iOS could have been considered for the same treatment, but Android stomped all over the iOS market share, at least in Europe.

By big_D on 14 Apr 2014

big_D. I don't entirely agree...

Apple have used their domination in the smart phone / tablet space to push Safari making it more difficult for other browsers to gain a foot hold. Do you think that when mummy and daddy buy Tamara and Tarquin shiny new iPhones, the two offspring have any idea which browser they are using? As for Linux, it's share on the desktop continues to be frankly pathetic, so nobody gives two monkeys which browsers ship with which distros!

By rjp2000 on 14 Apr 2014

@rjp2000

I'm sorry to point out that Tamara and Tarquin are now parents of Sophie and Jack (Tamara) and Harry and Jessica (Tarquin). These children have just mastered swiping to change pages but with our government promoting programming skill they will have written their own browsers in Python before long and the Apple / Microsoft plutocracy will come to a natural end.

By milliganp on 14 Apr 2014

Billion?!

"Microsoft's $731 billion fine over failing to show browser choice"
Seems a bit steep.

By martindaler on 14 Apr 2014

What a Joke!!

Even when this was supposedly a valid complaint it was a joke. Anyone that was likely to have selected a Browser other than IE already knew enough to be able to do without some daft selection option.
Why not complain about Paint, Notebook, Solitaire etc. they are, and were, just as much a lock in as IE

By Buckskin on 14 Apr 2014

Poor Microsoft

Do you any of you Microsoft fans even understand why they got sued in the first place? Here's the US Department of Justice's findings of facts in their anti-trust case against Microsoft.
go and read it if you dare:

http://www.justice.gov/atr/cases/f2600/2613toc_htm
.htm

So, they start off by attempting to create an illegal cartel with Netscape: Microsoft will create browsers for Windows and Netscape and create browsers for all other OSs.

When Netscape tells them to stuff it, Microsoft starts using its Windows fees to reward and punish OEMs. OEMs that promote IE to the exclusion of other browsers get cheaper Windows prices and better support. OEMs that don't do that get punished with higher prices. That's also illegal, by the way.

Finally, Microsoft refuses to supply Windows 95 to OEMs unless they take IE as well. (Windows and IE were separate products at the time, despite Microsoft's attempt to rewrite history on that one.) With Windows 98, they go one better; not only do they bundle IE with Windows 98, but do so in a way that's impossible for IE to be removed. IE is an intrinsic part of the OS now, you see? Or at least, that's Microsoft says.

Except it isn't. In court, it was proved that IE *could* be removed from Windows 98 without the latter falling apart. So Microsoft's "commingling' (as it came to be known) of the two, was a fake, designed to force IE on OEMs yet again.

That's why Microsoft got sued. That's why they were found guiltly. Ultimately, that's also why the EU hit them with the browser choice screen. Bed made, lie.

By BrownieBoy6 on 14 Apr 2014

@Buckskin

exactly what I wrote at the time on these very pages...

@rjp2000 - Apple's dominant position? Here in Germany they are about to be overtaken by Windows Phone and Android has a much larger share, globally, than iOS. The time for action against Apple would have been in the 2008 - 2010 range.

By big_D on 15 Apr 2014

@BrownieBoy

I think you are intermingling and confusing the EU ballot screen farrago from 2009 (which is what we are discussing) with much earlier anti-trust cases launched both sides of the Atlantic which if I remember correctly were more to do with the bundling (or rather unbundling) of Windows Media Player, and some complaint from Novell (remember them?) about lack of access to Server APIs. Oh and by the way I am not an MS fan, but I'm not a rabid hater either ;-)

By rjp2000 on 15 Apr 2014

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