In what has been described as the most important competition law case in EU history the CFI upheld the Commission’s finding that Microsoft was guilty of committing two infringements of EC competition law: illegitimately to have refused to supply intellectual property (IP) protected interoperability information to competing workgroup server operating systems (WGSOS), and to have performed an illegal tie of its Windows Media Player (WMP) to its dominant operating system. Microsoft has been labelled “the biggest encroachment on intellectual property in European competition law history” and it is accused of hampering innovation and interfering with beneficial product integration by applying an anachronistic form-based tying test. In the opinion of the author the Judgment is an esoteric masterpiece of obfuscation that despite its considerable volume does little to provide legal certainty regarding the conditions under which compulsory licensing of IP rights (IPRs) will occur, or when technical integration will be deemed legal. Microsoft is of ever-increasing relevance for legal academics and undertakings alike for several reasons: First, since it is the most high profile ruling on the two most controversial issues within EC competition law – compulsory licensing of IPRs and tying – the Judgment will be a fundamental point of reference, especially amid claims that competition authorities’ concerns regarding the acquisition and use of IPRs are increasing and that legitimate worries of IP owners (IPOs) are accordingly engendered. Second, high tech markets are increasingly important to consumers and to the global economy, and Microsoft is the “focal point for the ongoing debate about the future direction of the software business” because it concerns all dominant high tech undertakings. Third, Microsoft was concluded in the light of the Lisbon Agenda, where the EU officially acknowledged IP protection’s paramount importance in generating the innovation necessary for economic progress. The Lisbon Agenda has lead to clarion calls for the improvement of the IP environment in Europe, and for innovation considerations to take more prominent part in competition law analysis. Yet this dissertation shows that the opposite regrettably occurred in Microsoft, where IPRs were essentially deprived of their use as a result of an indefensible weakening of the exceptional circumstances test. [...]
Table of Contents
INTRODUCTION
Thesis, Aims and Outline
Part I: Contextualisation of the Microsoft Judgment
CHAPTER 1 – THE THEORY AND PRACTICE OF THE CONTROVERSIAL INTERFACE BETWEEN IPRS AND COMPETITION LAW, AND THE EXERCISE OF TYING
1.1.IPRs and Competition Law in Legal Theory
1.2.IPRs and Competition Law in Legal Practice
1.3.The Exercise of Tying in Theory and Practice
Part II: The Controversial and Contestable Conclusions of the Microsoft Judgment
CHAPTER 2 – A DRAMATIC ATTENUATION OF THE EXCEPTIONAL CIRCUMSTANCES CRITERIA
2.1. The Indispensability Criterion
2.2. The Elimination of Competition Criterion
2.3. The New Product Criterion
2.4. Chapter Conclusions and Implications
CHAPTER 3 – THE APPLICATION OF A FLAWED AND INAPPROPRIATE FORM-BASED TYING TEST
3.1. The Separate Products Element
3.2. The Foreclosure Element
3.2.The Choice/Coercion Element
3.4. The Objective Justification Element
3.5. Chapter Conclusions and Implications
CONCLUSION
Objective and Core Themes
The primary objective of this dissertation is to critically examine the legal and factual foundations of the Court of First Instance's (CFI) conclusions in the Microsoft case. The author argues that the judgment significantly attenuates established legal standards, specifically the "exceptional circumstances" test for compulsory licensing and the traditional form-based test for tying, resulting in dangerous ramifications for innovation and legal certainty in European competition law.
- The complex interface between Intellectual Property Rights (IPRs) and competition law.
- The dramatic attenuation of the "exceptional circumstances" criteria for compulsory licensing.
- The inappropriateness of applying a traditional form-based tying test to high-tech market dynamics.
- The potential for the Microsoft judgment to harm consumer welfare and stifle long-term technological innovation in Europe.
Excerpt from the Book
1.3 The Exercise of Tying in Theory and Practice
Tying two separate products together and offering them as a package is a common commercial practice amongst undertakings, which can have many pro-competitive effects such as lowering costs, improving product quality and spurring pricing competition, consequently passing on economic efficiency gains to consumers. However, it becomes abusive under Article 82(d) when a dominant supplier exploits its market power to effectively force consumers to purchase the tied product by removing the non-tied versions from the market, thereby harming both consumers by precluding choice and competitors since they are effectively excluded. When abusive tying is coupled with IPRs “the tie creates a competitive advantage for the IPR owner, compelling competitors to have access to both markets if they are to compete on equal terms with the IPRs owner.” Accordingly tying can also be inherently anti-competitive, which necessitates a test to determine whether a specific tie is abusive. In European legal history a form-based tying test has been applied, consisting of five elements that must be established for the finding of an abusive tie: the ‘tying’ and ‘tied’ products are separate; the undertaking is dominant; consumers are deprived of choice by being coerced into attaining only the package version; the tying has a foreclosure effect on competition in the market for the tied product; and there is no objective justification for the tie. While competition law authorities have adopted a more effects-based reasoning in other areas, Article 82 remains predominantly form-based in spite of aspirations towards change. Consequently the analytical framework of the EU institutions follows an inherently ordoliberal approach in relation to tying, which emphasises the impact on the market structure and “heavily relies on structural presumptions and a form-based analysis rather than an assessment of the effects of the conduct on consumer welfare.”
Summary of Chapters
CHAPTER 1 – THE THEORY AND PRACTICE OF THE CONTROVERSIAL INTERFACE BETWEEN IPRS AND COMPETITION LAW, AND THE EXERCISE OF TYING: This chapter contextualizes the conflict between IPRs and competition law and explains the traditional form-based tying test used in European jurisprudence.
CHAPTER 2 – A DRAMATIC ATTENUATION OF THE EXCEPTIONAL CIRCUMSTANCES CRITERIA: This chapter analyzes how the CFI lowered the standards for compulsory licensing and arguably undermined the legal protection of IPRs through the Microsoft ruling.
CHAPTER 3 – THE APPLICATION OF A FLAWED AND INAPPROPRIATE FORM-BASED TYING TEST: This chapter explores why the traditional tying test was technically flawed and unsuitable for the unique high-tech market characteristics inherent in the Microsoft dispute.
Keywords
Microsoft case, Competition law, Article 82 EC, Intellectual Property Rights, IPRs, Compulsory licensing, Exceptional circumstances test, Tying, Windows Media Player, Innovation, High-tech markets, Consumer welfare, Interoperability, Foreclosure, Form-based analysis
Frequently Asked Questions
What is the core focus of this dissertation?
The dissertation analyzes the legal and factual validity of the European Court of First Instance's ruling in the Microsoft case, focusing on the negative impacts of the judgment on innovation and the legal balance between competition law and intellectual property rights.
What are the primary themes discussed in the work?
The work examines the interface between IPRs and competition law, the criteria for compulsory licensing, the applicability of traditional tying tests to high-tech industries, and the shifting focus of EU authorities from consumer protection to competitor protection.
What is the central research question?
The research questions whether the CFI's conclusions in the Microsoft case are legally and factually contestable and if the judgment's departure from established case law will lead to dangerous ramifications for innovation and economic progress in Europe.
Which methodology does the author employ?
The author performs a critical legal analysis of the Microsoft judgment, comparing it to established precedent (such as the Magill and Bronner cases) and investigating how the Commission and the CFI deviated from traditional standards.
What topics are covered in the main body of the text?
The main body evaluates the criteria for compulsory licensing (indispensability, elimination of competition, new product/technical development), the flaws in the tying test (separate products, foreclosure, choice/coercion, objective justification), and the implications for high-tech market regulation.
Which keywords define this dissertation?
Keywords include the Microsoft case, Article 82 EC, IPRs, compulsory licensing, tying, interoperability, and high-tech market innovation.
How does the author characterize the "exceptional circumstances" test?
The author characterizes it as having been "dramatically attenuated," arguing that the threshold for indispensability was lowered to the point where even convenient alternatives are disregarded.
What does the author argue regarding the "new product" criterion?
The author contends that the strict "new product" criterion was de facto replaced by a weaker "technical development" criterion, effectively allowing competitors to demand access to a rival's intellectual property without proving a need for a truly new product.
- Arbeit zitieren
- Veronica Hagenfeldt (Autor:in), 2009, The Contestable and Potentially Harmful Conclusions of the 'Microsoft' Case, München, GRIN Verlag, https://www.hausarbeiten.de/document/169615
