The Microsoft case: competition law caught by politics

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of PLC.

Seen by some as a political victory for the European Commission and by others as a barrier to innovation, the outcome of the Microsoft case has spread the competition debate beyond judicial and competition policy specialist circles, writes Claire Vanini in a paper for the Robert Schuman Foundation.

Firstly, the author outlines the circumstances of the Microsoft case, which started in 1998 with a complaint to the Commission’s competition directorate-general by Sun Microsystems. The complaint followed Microsoft’s refusal to provide a variety of technical information. 

The Commission launched infringement proceedings against Microsoft and issued a preliminary ruling in 2003, which ordered Microsoft to: 

  • Offer a version of Windows without Windows Media Player; and; 
  • offer the information necessary for competitors on the desktop server market to have full compatibility with Windows desktops and servers. 

In July 2004, Microsoft complained to the European Court of Justice (ECJ), claiming that information that DG Competition requested be made available to competitors was protected by intellectual property rights. In addition, Microsoft argued that such an obligation would dissuade the company from investing in innovation. 

In 2007, the ECJ upheld the Commission’s antitrust ruling against Microsoft. But the Microsoft case is not as innovative for EU competition law as some commentators on the Court ruling claimed, argues the paper. 

This ruling is a continuation of well-established jurisprudence practices imposed by the ECJ in its Volvo ruling in 1988, recalls the author. Here, case law followed the automobile manufacturer’s refusal to provide technical information to independent operators on the manufacturing of car parts. 

Such jurisprudence was confirmed by two other examples of case law, adds the author. The Magill case law in 1995 and the IMS Health case law in 2004, in which the ECJ considered that the refusal of companies in a dominant position to provide a licence to competitors operating in an equivalent market was abusive. 

According to the author, it is legitimate to raise the question of the potentially dangerous nature of such principles for innovation, but it is the role of political power to address the issue, rather than the judicial authorities. She therefore addresses the issue of the duality of the Commission’s role as an executive body and a competition authority. 

This duality played an important role in the political effect generated by the Microsoft case. That is the reason why one can raise the issue of creating an independent body in charge of the enforcement of competition law at EU level, concludes Vanini.