It's not you, it's me: breaking commitments

Microsoft was recently fined €561m by the European Commission for not having complied with the terms of a commitment.

Microsoft was recently fined €561m by the European Commission for not having complied with the terms of a commitment which required it to display a screen offering users of its Windows operating systems a choice over which website browser to use.  The Commission found that the company had failed to display the browser-choice screen for a period of approximately 14 months spanning between May 2011 and July last year.

Microsoft is required to display its browser-choice screen until late next year under commitments the company agreed with the Commission in 2009.  At the time the Commission had raised concerns about the dominance of Microsoft in the browser market and had taken issue with the company tying its Internet Explorer browser to its Windows system.

The Commission is increasingly resorting to commitments as a means to resolving investigations and concerns more quickly than would otherwise be the case.  The regulator has engaged with Google by entering into 'commitments' discussions, rather than initiating formal proceedings.  Proposed commitments offered by Google are currently subject to consultation.

The attraction of 'quick wins' via commitments are understandable, particularly in fast moving technology markets.  However, they enable the Commission to agree (or effectively impose) substantial remedies to what might be ill-defined perceived competition problems.  Absent the requirement to prove that the rules have been infringed, there is a danger that sloppy analysis results in misguided interventions.  That would be a bad outcome for innovation and for consumers.