Microsoft must pay $732 million in fines to the EU because of an infringement of an agreement that was made. This agreement specifically addressed the issue with Microsoft tying its Windows products with its Internet Explorer browser.

The agreement was that Microsoft would allow a screen of choice in its Windows operating system for users to select the browser they wanted to use. This was to be in effect until 2014. However, according to the accusations against the company, the choice screen was dropped in May of 2011 when the Windows 7 Service Pack came out.

While the $732 million sounds like a steep fine, it is actually a break from what could have been imposed on Microsoft. The law allowed up to 10% of Microsoft’s annual revenue for the fine.

The fine is not only to show how serious the offense is but to hopefully deter other businesses from making the same mistake.

Microsoft has stated that they take full responsibility for what happened, saying that it was a computer glitch that is to blame for the issue. The company has issued an apology and has said it is taking steps to prevent a similar problem in the future.

The European Union acts in much the same way as the Federal Trade Commission. It attempts to form legally binding agreements with businesses that have violated consumer protection laws where they agree to stop those practices.  That was the reason for such an agreement with Microsoft who in years past had the market on internet browsers cornered with very little competition. Today, Google’s Chrome, Apple’s Safari, and Mozilla’s Firefox has provided solid browsers of their own to appeal to users. The result is that each company continues to work to provide better features, security, and improved reliability, which benefit the people who choose their service.

[Image via bloomberg]