Microsoft Deal in Europe Barely Affects Browser Market

The EU's antitrust measures are coming under scrutiny. Six months after Microsoft agreed to send software ballot screens to 200 million Windows users in Europe giving them a list of 12 web browsers from which to choose, the initiative appears to be having only a minor influence on consumers. Opera, in particular, has seen little benefit.

When Europe settled an antitrust case over Web browsers with Microsoft in December 2009, it hoped to dislodge the world's biggest software maker from its dominant position in that market by requiring it to offer rivals' products.

As part of that, Microsoft in March started sending software ballot screens to 200 million Windows users in Europe. The screens ask users to choose a default from a list of 12 browsers including Internet Explorer, Firefox, Google 's Chrome, Opera and Apple's Safari.

Six months into the process, the initiative appears to be having only a minor influence on consumers, prompting a renewed debate about the effectiveness of such antitrust remedies.

"I'm sure that it is increasing pressure on Microsoft, which has been losing share anyway," said Aodhan Cullen, the chief executive of StatCounter, a research firm in Dublin that tracks browser use. "But it hasn't caused a big upheaval in rankings."

The agreement was intended to check Microsoft's advantage of bundling its browser into Windows, a practice that a Norwegian browser maker, Opera, challenged in a complaint to the European Commission in December 2007. While browsers are free, they are the gateway through which companies like Microsoft, Google, Apple and Mozilla, the owner of Firefox, earn revenue through advertising.

According to StatCounter, Microsoft's leading share of the European browser market fell to 39.8 percent in October from 44.9 percent in January. In 2009, Microsoft's share declined by 5.5 percentage points; in 2008 by 8 points.

Most of the decline has come amid gains by Google, which introduced Chrome in September 2008. Google's share of the European market doubled this year, to 11.9 percent in October from 5.8 percent in January.

But it is impossible, browser makers and market researchers say, to isolate the effect of the ballot from general market trends, and there is no way to measure consumer participation in the balloting or its direct outcome.

Debate over the effectiveness of European antitrust remedies is not new.

In 2003, the commission ordered Microsoft to sell a version of Windows in Europe without its own media player, to minimize the company's advantage in bundling its products. But consumers largely rejected the stripped-down version, which Microsoft sold for the same price as its full Windows software.

Neelie Kroes, who crafted the ballot screen settlement with Microsoft in December 2009 as the E.U. competition commissioner, is now commissioner for telecommunications and the digital economy.

Her spokesman directed questions on the ballot screen remedy to Ms. Kroes' successor as competition commissioner, Joaquin Almunia.

Amelia Torres, a spokeswoman for Mr. Almunia, said recent market data suggested that competition among browser makers was increasing, which was an indication of the ballot screen's success.

"I think one can say that the decline in Internet Explorer share can be interpreted as the ballot screen bringing about its intended effect," Ms. Torres said.

The commission never planned to dictate the market shares of competitors in the browser market, Ms. Torres added. She said the cyber-balloting gave Europeans another option, if they chose, to select one of several browsers.

Brian Rakowski, director of Chrome product management at Google, said it was impossible to quantify the ballot screen's effect, but he thought the remedy had raised awareness among Europeans about what browser choices were available.

"We are also seeing people responding more and more to Chrome, and starting to tell their friends about it," Mr. Rakowski said.

Achim Sauerberg, an analyst at Statista, a market research firm in Hamburg, said the ballot screen had only reinforced the status quo among European consumers, many of whom had already chosen a browser before the commission took its action.

"People who tend to care about browsers had already made this decision," Mr. Sauerberg said. "So this was unlikely to dramatically rearrange the market anyway. But I'm sure it is increasing pressure on Microsoft to defend Internet Explorer."

Microsoft declined to evaluate the effect of the settlement on its browser presence in Europe. The company agreed to the browser settlement after fighting and abandoning a decade-long antitrust battle with the European Commission over the bundling of its media player and the use of confidential protocols for server software.

Microsoft, which by agreeing to the settlement avoided another round of litigation and potential fines, is planning to release its latest browser version, Internet Explorer 9, this year.

Jesse Verstraete, a Microsoft spokesman in Brussels, said the company was complying fully with the conditions of the commission's settlement and had distributed browser ballots to about 200 million existing and new purchasers of Windows systems in Europe.

The company that initiated the settlement, Opera, has seen little benefit from the balloting screen, according to StatCounter.

The Oslo-based company's market share has risen to 4.5 percent in October from 4.3 percent in January.

When Microsoft released the first ballot screens in March, Opera said at the time that it was seeing an increase of 800,000 downloads each month.

Pal Unanue-Zahl, an Opera spokesman, said the company had no more recent data.

"We think the ballot screen solution is definitely making the market more competitive," he said.

Firefox has seen its share in Europe fall slightly, to 38.8 percent in October from 39.9 percent in January, according to StatCounter.

The market share of Apple's Safari has risen to 4.5 percent in October from 3.7 percent in January.

Ulrich Borger, an antitrust lawyer at Latham & Watkins in Hamburg, said the market snapshot showed that the browser wars were more competitive than ever.

"When the commission first began looking into this, the market was in a different situation," Mr. Borger said. "Now, there appears to be a very healthy competition going on."