No, Microsoft is leaving the market instead of giving in to blackmail. Had I been Microsoft I'd have done that in Europe too, and immediately revoked all licenses issued to Euro government agencies.
Most likely (giving the attitude in many Asian countries towards piracy) sales are already low there with 99% pirated versions in use so the loss in sales would be minimal.
As to Microsoft requiring IE for Windows Update, it's because of the way it works.
WU uses a rather large ActiveX control to calculate what updates to get, and no other browser supports that.
I've not seen an option to autoupdate FireFox through IE either...
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duckman
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since Nov 2004