A "technical error" related to a Windows Service Pack ends up costing Microsoft hundreds of millions of dollars in fines.
It was rumored the European Union wanted to close its investigation into Microsoft's "browser ballot" screw-up and levy a fine before Easter break, a mission it's now achieved with weeks to spare. E.U. regulators decided to punish Microsoft to the tune of €561 million, or a little more than $731 million in U.S. currency, for failing to comply with an agreement to provide users with a browser choice screen (the so-called browser ballot) upon firing up Windows for the first time.
Microsoft had been complying with the order up until the release of Service Pack 1 in Windows 7. The Service Pack unintentionally prevented the browser ballot from appearing, which Microsoft chalked up to a "technical error." This didn't sit well with E.U. regulators.
"The choice screen was provided as of March 2010 to European Windows users who have Internet Explorer set as their default web browser. While it was implemented, the choice screen was very successful with users: for example, until November 2010, 84 million browsers were downloaded through it," the European Commission said in a statement. "When the failure to comply was detected and documented in July 2012, the Commission opened an investigation and before taking a decision notified to Microsoft its formal objections in October 2012."
As heavy-handed as the fine appears, it could have been much worse. The Commission is within its legal right to fine Microsoft as much as 10 percent of its global annual revenue, and had it gone that route, it would have worked out to around $7.4 billion.
"We take full responsibility for the technical error that caused this problem and have apologized for it," Microsoft said in a statement. "We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future."
It's not immediately clear if Microsoft will appeal the fine.