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This article is of 12 June 2009: http://news.bbc.co.uk/2/hi/8096701.stm

Is this still true?

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No, and it has actually never been true. By the time Windows 7 was RTM, this issue was resolved. "Windows 7 E" (how it was called) has never been released.

See this for the official explanation from Microsoft:

One reason we decided not to ship Windows 7 E is concerns raised by computer manufacturers and partners. Several worried about the complexity of changing the version of Windows that we ship in Europe if our ballot screen proposal is ultimately accepted by the Commission and we stop selling Windows 7 E. Computer manufacturers and our partners also warned that introducing Windows 7 E, only to later replace it with a version of Windows 7 that includes IE, could confuse consumers about what version of Windows to buy with their PCs.

The Commission also previously expressed concerns about Windows 7 E. In a statement the day after I outlined our plans for Windows 7 E, the Commission clarified that it believes “consumers should be offered a choice of browser, not that Windows should be supplied without a browser at all.”

We’re now confident that shipping Windows 7 with IE in Europe—as we will in the rest of the world—is the right thing to do for our partners and for our customers. We also feel encouraged in making this decision by the positive reaction from so many quarters to our ballot screen proposal last week.

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