Microsoft charges Europeans double for Windows 7

When the company launches Windows 7 on Oct. 22, it will price Windows 7 Home Premium, likely the most popular of the three editions available at retail, at ?119.99 in the European Union (EU) and charge Ł79.99 in the U.K., an EU member that has retained its own currency. Those prices are the equivalent to $168.66 and $132.14 U.S., respectively, at Saturday's exchange rates.

U.S. consumers will pay only $119 for the same software after a two-week pre-order sales discount expires July 11. That means EU residents will pay 41% more, and U.K. consumers 10% more, than U.S. buyers for Home Premium Upgrade.

Other editions will come with an even higher surcharge. Windows 7 Professional, the key retail edition for businesses, will sport a price tag of ?285, or $400.60, and Ł189.99, or $313.84, at Saturday's exchange rate. In other words, EU customers will pay twice the $199.99 U.S. price; U.K. buyers will pay 57% more.

The top-end Windows 7 Ultimate, priced at $219.99 in the U.S., will cost ?299 ($420.27), or 91% more, in the EU, and Ł229.99 ($330.36), or 50% more, in the U.K.

Some of the money Microsoft stands to make on the European editions of Windows 7 comes from the weak dollar. Last week, for instance, the dollar fell against the euro the most in a month, hitting $1.41 per euro.

According to Microsoft, it's also not reducing Windows 7's prices from Vista's current marks as much in the EU as it is in the U.S. Windows 7 Home Premium's EU price is down ?6, or 4% from the same Vista edition, half the 8% cut that Microsoft made to Home Premium in the U.S. In the U.K., Microsoft left prices untouched; Windows 7 will be priced the same as Vista.

Europe's customers will be paying more for less, as Microsoft has decided to yank Internet Explorer 8 (IE8) from Windows 7 in an effort to head off EU antitrust regulators, who may still force the company to take more drastic measures.

Earlier this month, Microsoft announced that it was dropping IE8 from Windows 7 for customers in the EU, and would ship a browser-less edition, dubbed Windows 7E. Instead, Microsoft said computer makers could decide which browser or browsers to install.

But Windows 7E presents special problems for people who intend to upgrade existing computers from Windows Vista to the new OS. Because Microsoft won't allow EU users to do "in-place" upgrades -- which would leave some version of IE on the machine -- the company isn't selling "Upgrade" editions. Instead, it's selling the "Full" editions, which are usually more expensive, at "Upgrade" prices. (The prices quoted above, for example, compare U.S. Upgrade editions with EU Full editions, since the latter has been marked down.)

It's unclear whether Microsoft's move will mollify EU officials. Although most analysts saw yanking IE8 as a major concession, EU's antitrust agency hasn't exactly warmed to the idea." Rather than more choice, Microsoft seems to have chosen to provide less," the European Commission said in a statement issued after Microsoft's June 11 announcement.

The EU's preferred solution seems to be a "ballot screen" that users would see the first time they try to connect to the Internet from Windows 7. Such a screen would presumably offer multiple browsers, including IE, Mozilla's Firefox, Apple's Safari and Opera Software's Opera. Microsoft and computer makers dread a ballot screen, analysts have said, because of potential support problems.

Users in the U.K., France and Germany will also be able to buy Windows 7 at steep discounts for a limited time starting July 15, a program mimicking the one kicked off last Friday in the U.S., Canada and Japan. The pre-order discounting will trim the price of Windows 7 Home Premium to Ł49.99 in the U.K. and ?49.99 in France and Germany until Aug. 14, assuming supplies last. Windows 7 Professional's sales price will be Ł99.99 in the U.K and ?109.99 in France and Germany.