Microsoft has offered to provide a choice of web browsers with its upcoming Windows 7 operating system.
The move is aimed at easing concerns of competition regulators in the European Union.
Microsoft proposed including a "ballot screen" that would make it easy for Windows 7 users to install a competing Web browser, set it as the default and disable Internet Explorer, the European Commission said in a statement. PC makers would also be able to install competing Web browsers and disable IE.
"The Commission welcomes this proposal, and will now investigate its practical effectiveness in terms of ensuring genuine consumer choice," it said.
The Commission raised concerns in January that Microsoft's practice of tying IE with Windows might be anticompetitive. Later, in June, it said that simply separating IE from Windows might not be sufficient to ensure competition.
After that warning, Microsoft said it would ship a version of Windows 7 in Europe without Internet Explorer, to make sure it complied with the law. On Friday it said it would continue shipping that version, called Windows 7 E, to PC makers until the Commission decides whether to accept the ballot option.
"PC manufacturers building machines for the European market will continue to be required to ship E versions of Windows 7 until such time that the Commission fully reviews our proposals and determines whether they satisfy our obligations under European law," Microsoft said.
Microsoft has also made proposals to the Commission about disclosing information to achieve better interoperability between Windows, Windows Server and third-party products, the Commission said Friday. It is also investigating these proposals, it said, declining to comment further.
Microsoft said the interoperability efforts also include Office, Exchange, and SharePoint. "Like the Internet Explorer proposal, the interoperability measures we are offering involve significant change by Microsoft," the company said.
"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," the company said, adding that it would mark "a big step forward in addressing a decade of legal issues."
The EU has already won an earlier competition case against Microsoft. In May 2004 it fined the company a record €497 million ($794 million) and ordered it to sell a version of Windows in Europe that did not include Microsoft's Windows Media Player software, to restore competition in that market.
Few PC makers sold the version of Windows without WMP, however, and the remedy was widely seen as ineffective. The Commission is keen to extract more effective remedies from Microsoft for its latest objections.
Microsoft said it would publish its latest proposals "in full" on its Web site "as soon as possible."