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Statement by Brad Smith, General Counsel

July 24, 2009

As the European Commission has just announced in a statement, Microsoft has made a new proposal in an effort to address competition law issues related to Internet Explorer and interoperability.

Under our new proposal, among other things, European consumers who buy a new Windows PC with Internet Explorer set as their default browser would be shown a ‘ballot screen’ from which they could, if they wished, easily install competing browsers from the Web.  If this proposal is ultimately accepted, Microsoft will ship Windows in Europe with the full functionality available in the rest of the world.  As requested by the Commission, we will be publishing our proposal in full here on our web site as soon as possible. 

While the Commission solicits public comment and considers this proposal, we are committed to ensuring that we are in full compliance with European law and our obligations under the 2007 Court of First Instance ruling.

As we said June 11th, we currently are providing PC manufacturers in Europe with E versions of Windows 7, which we believe are fully compliant with European law.  PCs manufacturers building machines for the European market will continue to be required to ship E versions of Windows 7 until such time that the Commission fully reviews our proposals and determines whether they satisfy our obligations under European law.  If the Commission approves this new proposal, Microsoft will begin work at that time to begin implementation of it with PC manufacturers.

As the European Commission announced, Microsoft’s proposal also includes a public undertaking designed to promote interoperability between third party products and a number of Microsoft products, including Windows, Windows Server, Office, Exchange, and SharePoint.

Like the Internet Explorer proposal, the interoperability measures we are offering involve significant change by Microsoft.  They build on the Interoperability Principles announced by Microsoft in February 2008, which were also based on extensive discussions with the Commission, and they include new steps including enforceable warranty commitments. 

We believe that if ultimately accepted, this proposal will fully address the European competition law issues relating to the inclusion of Internet Explorer in Windows and interoperability with our high-volume products.  This would mark a big step forward in addressing a decade of legal issues and would be good news for European consumers and our partners in the industry.