European Commission said it has cleared Microsoft's licensing agreements with Internet service providers, but said it has, "not ruled on the overall behaviour of Microsoft, in particular concerning a possible abuse of dominant position."
The clearance of the ISP agreements, in the form of 'a comfort letter' from competition commissioner Karel Van Miert, follows changes made by Microsoft early last year on ISP's minimum distribution volumes and competing browsers, the commission said.
"The comfort letter only covers the agreements between Microsoft and ISPs. The commission has therefore not given any ruling on the global behaviour of Microsoft concerning a possible abuse of dominant position," it said.
"In particular, this case [on the ISP agreements] is quite different in scope and substance from the court case currently pending in the US," it said.
"However, the commission could reopen its investigation into Microsoft's ISP agreements if there were any future change in the factual or legal situation affecting any essential aspect of these agreements that warranted a further inquiry," it said.
A commission source said that the commission "fully supports" the US anti-trust case, which is examining the bundling of Microsoft's Explorer Internet browser into its Windows operating system.
In March 1997 the commission opened an investigation into agreements between Microsoft and European ISPs during which the commission, "advised Microsoft to re-examine the agreements in the light of EU competition rules," it said.
This advice was given, "to ensure that they did not contain restrictions that might have the effect of illegally foreclosing the market for Internet browser software from Microsoft's competitors and of illegally promoting the use of Microsoft's proprietary technology on the Internet."
Microsoft subsequently changed the agreements so that a failure by ISPs to meet minimum distribution volumes or percentages of Internet Explorer browser technology would no longer result in termination of their agreements, it said.
Secondly, the agreements were changed so that ISPs are allowed to promote and advertise competing browser software, it said.
The latest version of the agreements were put out by the commission for industry comment in June last year, it said.
Under the agreements, Microsoft promotes the ISPs by including them in a list of pre-installed services on new personal computers using its Windows operating system, while Microsoft makes available to ISPs its Explorer Internet browser software, it said.
In return, the ISP pays Microsoft a fee for every subscriber gained via this feature and promotes Internet Explorer products, it said, adding that ISPs can be granted a licence to customise the Explorer software in accordance with specific instructions.
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