Once upon a time, Microsoft bestrode the software world like a ruthless cartoon villain, gobbling up rivals and defying pleas for restraint from regulators. But the once impregnable giant has now been humbled: following an acrimonious 10-year antitrust battle with European regulators, Microsoft on Dec. 16 finally agreed to open its Windows operating system to rival Web browsers in Europe.
Starting in March, people who use the Microsoft system Windows 7, XP or Vista in Europe will be offered a choice of 12 different search engines, rather than just the already installed Microsoft browser, Internet Explorer. The company will also allow computer makers to set any browser as default, not just Explorer.
While it may seem a trivial issue to allow rivals like Mozilla Firefox and Apple Safari to put their icons on Microsoft screens, the concession could signal the end of the company's domination of the browser market. Until now, Microsoft has used its near monopoly in operating systems to foist Explorer on Windows users despite the fact that the browser is widely derided by computer experts and everyday users alike as being clunky. Critics say this brutal marketing strategy explains why Explorer accounts for about 64% of global Internet traffic, followed by Firefox at 25% and Safari and Google Chrome at 4% apiece, according to Web-analytics company Net Applications.
OpenForum Europe (OFE), a nonprofit lobbying group advocating open-source software, says Microsoft's tactics have also stifled the browser market, making innovation difficult. But this could change now that Microsoft's competitors will have greater access to consumers. New features and applications are always being introduced in the mobile-computing market, for example, where no dominant operating system exists. "With real browser choice, we expect innovation to take off," says Graham Taylor, the chief executive of OFE.
Microsoft's move came as part of a legal settlement with the European Commission after a decade of skirmishes with the E.U.'s antitrust authority. Neelie Kroes, the E.U. competition commissioner, says Microsoft's previous approach denied consumers a fair choice. "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," Kroes said. "What we are saying today is that all the brands should be on the shelf." The settlement won't have a direct effect on the U.S. market, although it could lead to increased pressure on the company to open its systems to rivals there too.
Microsoft has always insisted that people had a choice of browsers. The company says that with the settlement, European Windows users will now simply be more aware of their options. "They're all used today, so that doesn't really change," says Brad Smith, Microsoft's senior vice president and general counsel in Redmond, Wash.
But rivals are hailing the deal as a turning point for the industry. "I think this settlement has the potential to change the status quo," says Sundar Pichai, head of Google's Chrome browser team. "Most consumers in the past have chosen Internet Explorer because it came on their computers. Now the decision will be made on the merits."