Commission ruling against Microsoft upheld

23 October 2007

Nick Boydell

The European Court of First Instance has upheld a 2004 European Commission decision against Microsoft. The 2004 ruling stated that Microsoft abused its dominant position in the PC operating systems market by bundling its Media Player product with Windows, and by failing to supply interoperability protocols to competitors that would have helped them to develop rival work group server operating systems. Microsoft was fined €497 million, ordered to sell a version of Windows without Media Player included, and ordered to make its interoperability protocols available to rivals.

This Court judgment carries implications for other large, dominant players in the technology industry. The most significant aspect of this decision is that the Court stated that withholding interoperability information could be an abuse of a dominant position under Article 82 if it keeps rivals from developing software for which there is potential consumer demand, even if that information is protected by IP rights. In this respect, the ECFI has broadened the scope of the existing case law (Magill and IMS Health) by stating that the criterion of abuse of suppression of a new product as a result of a refusal to license can also be satisfied where innovation is suppressed as a result of the refusal.

The Court applied existing law when it found that the bundling of a media player with the dominant Windows product was an abuse because it could not be objectively justified, it restricted competition in the streaming media player market, and Microsoft did not give consumers a choice between a version of Windows with Media Player and a version without Media Player.

Microsoft has two months to lodge an appeal to the decision on points of law only.