Microsoft has again found itself in hot water with the European Commission, after it announced that it has opened an investigation into whether the company has not complied with commitments to offer users of its Windows operating system a choice over their preferred web browser. [Updated with comment from Microsoft, scroll to the bottom of the post for details.]

According to the European Commission, Microsoft may not have offered the browser choice screen when it rolled out Windows 7 Service Pack 1, which started to hit PCs around February 2011. The EC also says that the company could be fined 10% of its annual turnover.

It isn’t known what the EC constitutes as Microsoft’s annual turnover (total revenue or profits) but if calculated on its current revenue rate, it could total up to $7 billion.

The Redmond software giant allegedly told the Commission, in December 2011, that it had complied with its regulations, but it appears that millions of European Windows users may have not been offered the choice over which browser they wished to use.

To make things worse, Microsoft has confirmed that it failed to deliver what it called a “Ballot Screen” during that time (updated: statement below)

top buttons 520x372 EC to investigate whether Microsoft kept browser choice commitments, may face up to $7 billion in fines

Following European Commission investigations in 2009 into Internet Explorer’s dominance in the browser market, Microsoft suggested giving Windows users an option to choose a different browser in new builds of its Windows operating system.

The ‘Ballot Screen’ showed the five most popular browsers in a random order: Chrome, Firefox, Safari, Internet Explorer 8 and Opera.

said Joaquín Almunia, Vice President of the Commission in charge of competition policy said:

“We take compliance with our decisions very seriously. And I trusted the company’s reports were accurate. But it seems that was not the case, so we have immediately taken action. If following our investigation, the infringement is confirmed, Microsoft should expect sanctions.”

In June, Microsoft saw its request to void an earlier imposed fine of 899 million euros (following an EU antitrust probe) declined by Europe’s second-highest court. The General Court of the European Union upheld the fine, cutting it down to 860 million euros.

The Commission says it now investigate whether Microsoft has failed to comply with its commitments last year, adding that it will “treat the case as a matter of priority.”

Update: Reuters has received word from Microsoft, with the company stating that a technical glitch has prevented it from offering a choice of browsers. It says it has already taken steps to fix the problem and has offered to extend the compliance period for an additional 15 months:

“Due to a technical error, we missed delivering the BCS (browser choice screen) software to PCs that came with the service pack 1 update to Windows 7,” Microsoft said in a statement.” While we have taken immediate steps to remedy this problem, we deeply regret that this error occurred and we apologise for it.”

[Image Credit: FlickrWonderlane]