Saturday, May 17, 2014

Microsoft Corp v. Commission , European General Court case brief summary

EUROPE: Microsoft Corp v. Commission , European General Court, 2004 p. 333

Holding: violation
Issue: Whether bundling of media player violated antitrust, done to prevent competition from Real Networks.
Reasoning: Duty to deal is an exception where there is intellectual property. Duty to deal only if:
         i.            access indispensable to competitors [competition not consumers]
       ii.            refusal must exclude any effective competition on a neighboring market
      iii.            must prevent the appearance of a new product for which there is potential consumer demand
     iv.            D must then show an objective justification
MSFT ensured that competitors' work group server OSes could not attain interoperability. consumers preferred non-MSFT work group servers but were prevented from using them.
Bundling the media player: mkt share data shows that before bundling MSFT player, MSFT bundled Real Networks' player. Once MSFT had a player that was good enough it switched, giving MSFT player access to MSFT's 93.8% share of the PC OS mkt.
MSFT claimed efficiency justifications but the Commission rejected those arguments + Court agreed.
Order: Required interoperability OR stop bundling. MSFT chose to continue bundling. EU fined MSFT 3 Million. Ct. Justice affirmed commission's fines.

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