The pact calls for Microsoft to present Windows customers with a so-called "Choice Screen" that lets them select either Microsoft's Internet Explorer browser or a rival offering, such as Mozilla's Firefox, Google's Chrome, or Apple's Safari.
Microsoft will implement the measure starting next year. The agreement applies to all computers running Windows 7, Vista, or XP.
The deal resolves a long-standing European Commission complaint against the software maker. EC regulators claimed that Microsoft's tying of Explorer with the Windows operating system stifled competition in the browser market.
"Now, for the first time in over a decade, Internet users in Europe will have an effective and unbiased choice between Microsoft's Internet Explorer and competing Web browsers," said European competition commissioner Neelie Kroes, who spoke at a press conference in Brussels on Wednesday.
Kroes said Microsoft previously made it too difficult for consumers to install browsers other than Explorer.
"It is as if you went to the supermarket and they only offered you one brand of shampoo on the shelf, and all the other choices are hidden out the back, and not everyone knows about them," said Kroes. "What we are saying today is that all the brands should be on the shelf," she said.
For their part, Microsoft officials stated that the measures it's taking under the deal are consistent with its other efforts toward open computing. "We are embarking on a path that will require significant change within Microsoft," said general counsel Brad Smith.
"Nevertheless, we believe that these are important steps that resolve these competition law concerns," said Smith.
Microsoft shares were up .47%, to $30.02, in premarket trading Wednesday.
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