Windows 7 E will be the only version to ship to Europe. Similar to versions of XP that shipped to Europe without Windows Media Player, the EU ruled in an antitrust case that MS has an unfair advantage with IE being shipped with Windows.
OEMs that will ship machines with Windows 7 will have the opportunity to install whatever browser they would like to. Pretty much anything is fair game as long as Microsoft is not making the decision.
So if a consumer buys a copy of Windows 7 off of the shelf in Europe, they will have NO BROWSER. So how do you get a browser? You'll need to bust into an FTP site or get it via removable media.
Let's play make believe...
But wait... what FTP client are you using? Microsoft bundles in an FTP client. Clearly this is unfair. Microsoft should remove that to allow 3rd parties a fair shot.
Since you forgot to download your browser installer before you wiped your machine, you'll be getting impatient calling your neighbor to come over with IE8/Firefox/Opera/Chrome. You bust open solitaire. Isn't this unfair also? There are many companies out there that sell games for Windows. Clearly this is also unfair. Microsoft needs to delete solitaire and all other games from the computer.
You want to listen to some music instead. Whoops, sorry, Windows Media Player shouldn't be their either. Go download Winamp or WMP after you get a browser.
You finally get some audio playback software. You don't have your sound card drivers installed yet, so you decide to get nerdy and bust out some bluetooth headphones since the drivers and bluetooth stack were installed by default for your setup. But wait, there are a few companies that sell their own bluetooth stack. Microsoft had better rip that out too and force you to download your favorite choice.I believe in a free market. If Microsoft actually blocks the installation of 3rd party software, by all means: burn them at the stake!! But as a developer, I use MSDN constantly. As one of many sources Microsoft opens up to the world, they want you to program for their platform! Sure, they'd love to see you use IE, but you don't see them crashing the Firefox installer.
If a 3rd party company like Mozilla or Google wants to compete, a customer will see their choices. Customers will make a decision. If the EU was being truely fair, they would force all operating systems ( all flavors of linux, windows, OSX, etc ) to not bundles internet browsers. It would be a level playing field. I'm assuming the decision passed down by the EU was meant to protect uneducated consumers, won't these customers be faced with a different decision? Buy a computer potentially without an internet browser... or buy that cute green ecofriendly hippie noncorporate machine Apple that has their own Safari browser ready to go?
edit: forgot to add source http://arstechnica.com/microsoft/news/2009/06/windows-7-to-be-shipped-in-europe-sans-internet-explorer.ars