Although Intel may have been hit with a bigger fine, the multi-year saga of Microsoft's fight with the European Union's Competition Commission may have run up larger legal bills, given its longevity. The most recent point of contention between Redmond and Europe has been the browser; Microsoft bundles its own with its operating systems, but the EU views that as using monopoly power to the detriment of potential competitors.

Earlier this month, word came out that Microsoft was looking to make this matter go away, and it may have succeeded; the European Commission has just announced that Microsoft has agreed to proposed EU remedies and is willing to offer a "browser ballot" to new users.

When the two adversaries squared off some years back over a similar issue, the bundling of Microsoft's media player, the EU ordered Microsoft to offer OEMs a version of Windows without the media software. None of them bit, which made the order rather toothless. So, it wasn't a shock that Microsoft first tried to preempt EU action in the browser market by offering more or less the same thing: Windows would ship without a browser in Europe, and OEMs could choose to add whichever one they would like.

The EU didn't find that offer compelling. Not only did the idea sound a bit like the failed media player solution, but Microsoft's antitrust legal history in the US indicates that it has been willing to exert significant pressure on OEMs in the past. In fact, just last month, the EU sent a series of questions to OEMs, asking if they had come under pressure originating in Redmond regarding browser bundling.

Those questions and other information originating with the EU indicated that its Competition Commission preferred a solution where users would be offered a "browser ballot" during the initial boot sequence. That screen would allow users to choose from a number of competing browsers, which would then be downloaded and installed on the machine. There's no word on which browsers would be eligible for votes, but Google, Mozilla, and Opera have all been in discussions with the Commission.

That may not have been Microsoft's preferred solution, but today's statement from the EU indicates that the company has decided to go with the flow.

"The European Commission can confirm that Microsoft has proposed a consumer ballot screen as a solution to the pending antitrust case," the statement indicates. Microsoft's proposal would allow Windows 7 to ship with Internet Explorer, but OEMs could add any additional browsers as they saw fit, saving users the hassle of a download. The statement also reiterates that the Commission does not see a browserless Windows 7 as a viable solution for restoring competition.

Microsoft has also made overtures regarding a separate case, the one related to interoperability between third-party software and Windows-based servers and clients, but the details weren't disclosed. The EU left it up to Microsoft to publish details of its proposal.

"We believe that if ultimately accepted, this proposal will fully address the European competition law issues relating to the inclusion of Internet Explorer in Windows and interoperability with our high-volume products," Microsoft general counsel Brad Smith said in a statement given to Ars. "This would mark a big step forward in addressing a decade of legal issues and would be good news for European consumers and our partners in the industry."

If you're looking for a reason for Redmond's sudden cooperation, you probably need to look no further than yesterday's earnings announcement. Microsoft has been cutting back where it can, and the sorts of lawyers who duke it out with the European Commission undoubtedly don't come cheap. And it's obviously better to ship Windows 7 with gritted teeth than to see it pushed back.

The fact that Microsoft itself made an offer that closely paralleled what the EU was likely to hand down anyway suggests the company thought it could shape some of the details to its liking. The fact that Windows 7 may ship with IE after all would appear to be one of them.