Antitrust regulators from the European Union (EU) are now investigating whether Microsoft’s upcoming Windows 8 and Windows RT OSs block competitors from installing their own web browsers while providing Microsoft’s Internet Explorer (IE) with unique capabilities. The investigation is the results of complaints from “several companies.”

Both Google and Mozilla publicly complained about Microsoft cutting third-party developers out of two aspects of Windows 8/Windows RT development: the ability to create a full-featured web browser that runs in the Metro environment on both Windows 8 and Windows RT (which Microsoft apparently reserves for IE), and the ability to create a browser desktop application for Windows RT (where Microsoft is permitting no third-party development at all).

Microsoft is required by its 2009 antitrust order to offer customers in Europe a choice of web browsers. Just this week, however, the software giant admitted it has been in contempt of that order since February 2011, when the SP1 update to Windows 7 inadvertently disabled a browser-ballot UI that provided this browser choice. It’s unclear how such a huge error could go undiscovered for so long, and evidence has emerged that Microsoft was, in fact, aware of it.

The EU could fine Microsoft up to $7 billion for this transgression and has indicated that the fines will be harsh if the company hasn't lived up to its legal requirements.

But this Windows 8/Windows RT issue is new, and it involves Microsoft’s next OS, which could be finalized as soon as this coming week. It addresses complaints from Google and Mozilla, and apparently other companies, that Microsoft is reserving full-featured web-browsing capabilities for itself in Windows 8 and Windows RT. This means that Microsoft is hiding Windows 8/Windows RT APIs from developers and preventing them from competing fairly with IE on the next Windows versions.

This is a truly nuanced issue.

Although it’s pretty clear that Microsoft must provide some form of UI in Windows 8 that, like the browser ballot in Windows 7, allows consumers to choose among rival web browsers, there are still numerous questions. And many are related to the design of Windows 8 and Windows RT. These include:

  • Does the browser ballot in Windows 8 need to provide a choice between desktop and Metro browser versions, or can Microsoft simply assume this applies only to the desktop environment?
  • Does Windows RT need to be included here? As a new OS targeting a new class of devices, Windows RT doesn't have a monopoly like Windows does in the PC market. Is this included?
  • And if so, does Microsoft need to provide third-party developers with an ability to create desktop browsers for Windows RT? Or can it relegate them to creating only Metro-style browsers?
  • Most important, perhaps: Are the earlier claims made by Google and Mozilla true? Is Microsoft really providing them only with a subset of the capabilities it provides internally to IE? Is Microsoft artificially tilting the playing field in Windows 8/Windows RT to its own products? And if so, how does Microsoft’s other anti-competitive rulings in the EU and elsewhere impact Windows 8 and Windows RT?

Microsoft’s responses to these questions and to the EU should be interesting. And with Windows 8 and Windows RT barreling toward completion, the company will need to act quickly.