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Under a 2009 deal with European regulators, Microsoft agreed to give Windows users in Europe a choice of browsers other than Internet Explorer through a ballot-style “choice screen,” giving them a chance to default to Firefox, Safari Chrome, Opera or another browser.

So why has the ballot been missing in Windows 7 since February 2011? And why did Microsoft tell the commission as recently as last December that the ballot was still present?

The European Commission says it’s opening an investigation into the situation. In a statement this morning, European competition commissioner Joaquin Almunia said the situation “could have severe consequences” for the company.

Microsoft is conceding that it made a mistake. In a statement today, Microsoft acknowledges that it has “fallen short of our responsibility” under the terms of the settlement. The statement continues …

Due to a technical error, we missed delivering the BCS software to PCs that came with the service pack 1 update to Windows 7. The BCS software has been delivered as it should have been to PCs running the original version of Windows 7, as well as the relevant versions of Windows XP and Windows Vista. However, while we believed when we filed our most recent compliance report in December 2011 that we were distributing the BCS software to all relevant PCs as required, we learned recently that we’ve missed serving the BCS software to the roughly 28 million PCs running Windows 7 SP1.

Microsoft is distributing an update with the browser ballot, retaining outside counsel to investigate the situation, and offering to extend the length of the agreement with the commission for 15 months beyond the original plan.

“We understand that the Commission will review this matter and determine whether this is an appropriate step for Microsoft to take,” the statement says. “We understand that the Commission may decide to impose other sanctions.”

EU regulators can impose fines of up to 10 percent of annual revenue, or about $7 billion based on Microsoft’s fiscal 2011.

Here are the full statements from Microsoft and the commission.

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