Active Choice vs. Inertia? An Exploratory Analysis of Choice Screens Applied in the European Microsoft Antitrust Case

Abstract

In March 2010, Microsoft started displaying a choice screen to its users whose default web browser was Internet Explorer (IE). This screen included the 12 most widely-used web browsers that run on Windows and was imposed as a consequence of an antitrust investigation in which the European competition authorities accused Microsoft of extending its monopoly from the operative system market to the web browsers market by including IE as Windows’ default web browser. After March 2010, when the choice screen started operating, IE’s market share did go down. It seems straightforward to attribute IE’s decline in Europe to the choice screen itself. However, considering publicly available data from StatCounter, a common trend among developed countries is quite noticeable. IE’s market share was going down before Microsoft started displaying the choice screen in Europe. In fact, IE’s decline, which continues in the following years, is also evident in the U.S., Australia, Canada, among many other countries that did not display choice screens. A differences-in-differences analysis shows that when considering these other jurisdictions as a comparison group to assess the choice screen’s effect on IE’s market share drop, the impact of the intervention is negligible. When the U.S. serves as the control group, the choice-screen leads to a change in IE’s between -1.76% and 0.08%, depending on the time frame considered as pre-post. And only the difference of -1.76% with a 6-month time frame is statistically significant. However, when considering the average of the U.S., Canada, and Australia as the control group, the choice screen’s impact is between -0.16% and -0.69% and not statistically significant. This preliminary finding invites us to assess how sticky default applications can be. Consumers have become more sophisticated 25 years after the first U.S. Microsoft case. Thus the theory of harm and the remedies that may address consumers’ inertia should be re-examined. In particular, what types of consumers may stick to default applications, whether the choice-screen design has been ineffective, as well as the reach of choice screens.