"Why would Microsoft NOT favor it's own browser in it's own OS? How is that illegal?"
Similarly, they bundle Bing as the Web search in the start menu.
At this point can you make a custom task manager and sue Microsoft to propose users to install your task manager on first boot? What about background image providers, why doesn't Microsoft propose to install background images from them at first boot?
It's an absolutely ridiculous idea.
They should not block alternatives, but having to promote them is complete nonsense.