Microsoft fined by European Commission over web browser
It introduced a Browser Choice Screen pop-up in March 2010 as part of a settlement following an earlier EU competition investigation.
But the US company dropped the feature in a Windows 7 update in February 2011.
Microsoft said the omission was a "technical error".
But competition commissioner Joaquin Almunia said the action was unprecedented, adding he wanted to deter any company from the "temptation" of reneging on such a promise.
In theory the watchdog could have fined the firm 10% of its global annual revenue which would have totalled $7.4bn, based on its 2012 annual report.
Browser 'oversight'
The case dates back to 2007 when Opera - a Norwegian web browser maker - complained that Microsoft was stifling competition on PCs by bundling Internet Explorer with its operating system.
Microsoft initially argued that the move benefited users, but after the European Commission issued a preliminary report suggesting the firm had abused its position, the company agreed to offer a choice of browser until at least 2014 to avoid risking a fine.
However, this option was missing from its Windows 7 Service Pack 1 released in 2011 and it continued to be absent for about a year-and-a-half.
After the EU was alerted to the problem it contacted Microsoft which subsequently issued an apology suggesting its engineers had accidentally missed the issue.
It added that it had "taken steps to strengthen our internal procedures to help ensure something like this cannot happen again".
It also acted to restore the facility. But the move was not enough to prevent an eight-month follow-up probe by the Commission into what punishment was needed.
At a press conference in Brussels Commissioner Almunia said Microsoft's lack of compliance represented a "serious breach".
