Redmond agrees to provide Windows users on the continent with "ballot screen" from which rival offerings can be selected.
Microsoft and the European Union announced an agreement Wednesday under which the software maker will provide European PC users a choice of browsers to run on the Windows operating system under a trial program.
The company typically configures its own Internet Explorer as the default browser for Windows. If the trial passes muster, Microsoft will be bound by the agreement's terms for the next five years.
The accord is meant to settle claims by European authorities that Microsoft's bundling of Explorer with Windows stifles competition in the browser market and creates an unfair playing field for rivals like Google and Mozilla.
"We welcome today's announcement by the European Commission to move forward with formal market testing of Microsoft's proposal relating to Web browser choice in Europe," said Microsoft general counsel Brad Smith, in a statement.
Under the plan, Microsoft will provide Windows users with a so-called "ballot screen" that will provide information about alternatives to Explorer, such as Google's Chrome, Mozilla's Firefox, and others, and allow them to activate the browser of their choice.
The ballot screen will come pre-installed on new Windows 7 computers and pushed to older systems running Vista or Windows XP through Microsoft's Windows Update server.
"The Commissions' concern has been that PC users should have an effective and unbiased choice between Internet Explorer and competing Web browsers to ensure competition on the merits and to allow consumers to benefit from technical developments and innovation both on the Web browser market an on related markets, such a Web-based applications," EU officials said in a statement.
Microsoft and European trustbusters have butted heads numerous times previously. Last year, the EC hit the company with a record $1.35 billion antitrust fine, claiming that Microsoft failed to make available to rivals documentation needed to create products that are interoperable with Windows.
"Today's decision is a significant step toward closing a decade-long chapter of competition law concerns in Europe," said Smith.
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