Software giant Microsoft's failure to keep its promise of providing Europe's Windows users with alternative web browsers to Internet Explorer (IE) has prompted the European Commission to slap a penalty of €561 million ($731 million) on the company.

About the fine which Redmond, Washington-based Microsoft has been hit with, the European Union (EU)'s competition watchdog said that Microsoft is the first company which has broken a voluntary antitrust settlement agreement with the EU regulators. The watchdog further added that the agreement would have given at least 15 million Windows users in Europe the ability to select alternatives to the IE.

The European Commission further elaborated that Microsoft has been fined because it had failed to promote a range of rival web browsers, over and above its own IE browser, to Windows users in the EU.

Despite the fact that Microsoft had, in March 2010, introduced a Browser Choice Screen pop-up screen as part of its antitrust settlement following an earlier EU competition probe, the feature was dropped by the company in a Windows 7 update that it released in February 2011.

Though Microsoft asserted that the omission had resulted from a "technical error," Competition Commissioner Joaquin Almunia had termed the action as unprecedented, and imposed the fine on the company with the argument that he wanted to dissuade any company from the "temptation" of going back on its promise with the EU regulators.