Microsoft faces up to $7.4bn fine in EU browser punishment

Microsoft is facing the unpleasant end of the European Commission antitrust blunderbuss, with the company now in line for a potentially huge fine over browser choice missteps. The EC confirmed it was investigating the software firm back in July, after an agreed-upon browser choice page failed to be shown to 28m PC users; now, Reuters reports, the EC will open a formal proceeding that will decide the extent of the penalty.

The next step is to open a formal proceeding into the company's breach of an agreement. We are working on this," EU Competition Commissioner Joaquin Almunia said this week. "It should not be a long investigation because the company itself explicitly recognized its breach of the agreement."

Microsoft was quick to hold up its hands and admit its mistake, confirming that a "technical error" had prevented the selection screen from being shown on computers running Windows 7 Service Pack 1. The bug was promptly addressed and the selection dialog shown, and Microsoft hoped that voluntarily extending the browser-choice compliance by 15 months would save it from punishment.

However, that remains the decision of the EU, and the potential to hit Microsoft's pocket is high. The Commission has the right to apply a fine equivalent to up to 10-percent of Microsoft's revenues for the fiscal year ending June 30, 2012, a sum which would amount to as much as $7.4bn.

Meanwhile, Almunia also had some warning words for Google, which also faces the possibility of investigation by the EU. "If remedies offered by Google can eliminate our concerns, we will succeed in reaching an agreement" the commissioner said, referring to complaints by Microsoft and others regarding Google's attitudes to competition. "Otherwise," he warned, "the legal road is a long one."