Great Move, EC. Now We Have to Download IE Ourselves…

What a brilliant move.

The European Commission claims that Microsoft’s practice of bundling Internet Explorer with Windows violates European competition laws, so the company strips IE out of European versions of Windows 7. Now the Commission can’t argue that Microsoft’s behavior distorts fair competition in the browser market because, well, there’s no browser.

And if there’s no browser, there’s no need for the “must carry” provision the EC is mulling, which would require Microsoft (MSFT) to ship Windows 7 with a choice of browsers, rather than with IE alone.

And if there’s no “must carry” provision, Microsoft’s rivals in the browser market must continue to bear the costs of their own advertising and distribution (I’m talking to you, Opera). They can’t piggyback on Windows as the provision would have allowed.

And if there are no browsers whatsoever bundled with Windows 7, the European Commission’s constituents are going to be very unhappy. Because they’ll be paying full price for a defeatured version of Windows 7. Microsoft can call it Windows 7: FeU Edition and it can launch with a splash screen that says “Due to the limitations imposed upon Microsoft by the European Commission, this version of Windows does not include a Web browser or media player. It does, however, include the e-mail address of European Commissioner for Competition Neelie Kroes with whom Microsoft encourages you to voice your displeasure.”

And make no mistake, they will be buying Windows. And in the end, that’s what’s important, right? A Windows user browsing the Web with Opera or Firefox is still a Windows user. And hey, they may soon be a Bing user as well.

Well played, Microsoft.

No wonder the EC is already wrinkling its nose at the move. “The Commission will shortly decide in the pending browser tying antitrust case whether or not Microsoft’s conduct from 1996 to date has been abusive and, if so, what remedy would be necessary to create genuine consumer choice and address the anticompetitive effects of Microsoft’s longstanding conduct,” the EC said in a statement issued late Thursday. “In terms of potential remedies if the Commission were to find that Microsoft had committed an abuse, the Commission has suggested that consumers should be offered a choice of browser, not that Windows should be supplied without a browser at all….As for retail sales, which amount to less than 5 percent of total sales, the Commission had suggested to Microsoft that consumers be provided with a choice of web browsers. Instead Microsoft has apparently decided to supply retail consumers with a version of Windows without a web browser at all. Rather than more choice, Microsoft seems to have chosen to provide less.”

Perhaps. But Microsoft’s obligation isn’t to provide more choice. It’s to refrain from restricting it, which is exactly what the EC demanded and exactly what Microsoft is doing here. Sadly for Redmond, it’s likely too little, too late. The tone of the EC’s response and its mention of “Microsoft’s longstanding conduct” clearly suggest that the agency continues to mull corrective action. So in the the end this may be all for naught. But you can’t say that Microsoft didn’t attempt to “restore genuine consumer choice and enable competition on its merits,” as the EC has called upon it to do. It just didn’t take on the costs of advertising and distributing the browsers of its rivals. And, honestly, who can blame it?

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