Microsoft has announced that it will ship a special version of Vista's successor in Europe, titled Windows 7 E, without Internet Explorer 8. The browser-less version, a reaction to an antitrust investigation by the EU into whether Microsoft is abusing its dominant position with Windows and Internet Explorer, will be distributed in all member nations of the European Economic Area as well as Croatia and Switzerland.

Windows 7 E is reminiscent of media-player-free Windows XP N and Windows Vista N, which Microsoft offered in Europe also in response to an EU antitrust investigation. Unlike the N versions, which proved to be very unsuccessful—as Europeans simply purchased the full retail versions and OEMs refused to include them on their systems—Microsoft is not planning to offer a version of Windows 7 in Europe that includes IE8. This means that none of the versions of Windows 7 sold in Europe will include a Microsoft's browser.

As first reported by CNET and confirmed by Microsoft, OEMs will have the option to add the browser back in, ship another browser, or ship multiple browsers. "The E versions of Windows 7 will include all the features and functionality of Windows 7 in the rest of the world, other than browsing with Internet Explorer," Microsoft notes. "Computer manufacturers will be able to add any browser they want to their Windows 7 machines, including Internet Explorer, so European consumers who purchase new PCs will be able to access the Internet without any problem. Consumers will also be able to add any Web browser to their PCs, to supplement or replace the browsers preinstalled by their computer manufacturer."

Microsoft notes that the decision affects both OEM and Retail versions of Windows 7 products. While OEMs will have access to a free "IE8 pack" that allows them to add the browser back in, consumers who purchase retail copies will not have a browser that they can use to download a browser. Therefore, Microsoft will offer IE8 via CD, FTP, and retail channels. It looks like Mozilla, Opera, Google, and Apple will have to do the same if they want European Windows 7 adopters to have access to their browsers.

Microsoft does not currently have plans to remove Internet Explorer from any versions of Windows XP or Windows Vista, nor from the Windows XP mode add-on for Windows 7 Professional and Windows 7 Ultimate.

Recently, the EU has been asking companies what they saw as the best way to remedy the browser-bundling situation, and was even considering a way to get Microsoft to bundle third-party browsers with the operating system, forcing users to choose which browsers to download and install as well as which to set as the default. Microsoft wasn't so keen on the idea of distributing third-party browsers, so it has apparently taken the matter into its own hands and decided to remove IE8 altogether, knowing that the EU already approved of the N editions.

This isn't what the software giant originally wanted to do, as it had previously argued in its legal filings with the EU that the browser was an integral part of the operating system. With the release of the Windows 7 Release Candidate, Microsoft has made it possible to remove IE8 (the beta did not allow this), along with many other Windows components. [W]e’re committed to launching Windows 7 on time in Europe, so we need to address the legal realities in Europe, including the risk of large fines," says Microsoft. "We believe that this new approach, while not our first choice, is the best path forward given the ongoing legal case in Europe."

The European Commission is of two minds on Microsoft's move, pleased by the possibility of OEMs being able to offer multiple browsers, but disappointed that Microsoft itself is not providing consumers with the choice. "As for retail sales, which amount to less than 5 percent of total sales, the Commission had suggested to Microsoft that consumers be provided with a choice of Web browsers," the EC said in a statement. "Instead Microsoft has apparently decided to supply retail consumers with a version of Windows without a Web browser at all. Rather than more choice, Microsoft seems to have chosen to provide less."

The timing of this decision is quite ironic: the browser space has never been as competitive as it is now. Furthermore, rivals continue to chip away at Internet Explorer's market share month after month. Still, third-party browser makers like Opera, Mozilla, and Google have been pushing the EU for tough sanctions against Microsoft. Unless the EU has objections to Microsoft's decision, it looks like new Windows 7 PCs sold in the EU will be IE-free.