Author(s)
Pierre Larouche
Source
Antitrust Law Journal, Vol. 75, Issue 3, ABA, 2009; conference paper from the Searle Symposium, “The End of the Microsoft Antitrust Case?”, Nov. 15-16, 2007
Summary
This article assesses Europe’s competition case against Microsoft.
Policy Relevance
The European Court of First Instance should have affirmed the European Commission (EC) rulings against Microsoft more strongly, clarifying innovation issues.
Main Points
- The European Commission’s (EC’s) ten-year case against Microsoft was brought to a close by a decision of the European Court of First Instance in 2007.
- Some argue that the Court defers too much to the EC in this case and other cases. But these critics measure deference improperly.
- In the Microsoft case, the Court examined the EC decision much more closely than previous decisions, and its reasoning fills holes in the EC legal arguments.
- Helping Microsoft’s rivals compete by making products that work with Microsoft products makes it less likely for rivals to compete by making innovative products that replaced Microsoft products. The EC hints the latter was unlikely because Microsoft was “super-dominant,” but the Court did not clarify this important issue.
- Microsoft’s defense that the EC ruling would harm innovation overall were not strong enough to offset the EC’s finding that Microsoft’s was harming competitors now. Balancing potential benefits against present harm is very difficult.
- The EC predicted that Microsoft’s media player would take over the market because it was tied to Microsoft’s operating system, but these predictions have not come true. It is surprising that the Court did not take the growth of competition into account.
- The EC could not resist intervening with the software business in ways that might not really have been necessary, but the Court did not address this.
- Overall, the EC’s decision very carefully looked at the effect of Microsoft’s behavior on other firms and consumers, and was a step in the right direction.
