Luxembourg, 17/09/2007 (Agence Europe) - The Court of First Instance has upheld the Commission's findings leading to its 2004 decision to condemn Microsoft for abuse of dominant position (Case 201/04). After being proven right, however, the Commission was rebuked for the way in which it imposed an expert trustee on Microsoft to facilitate surveillance of the company's activity.
Competition Commissioner Neelie Kroes welcomed the result, saying: “The Court has confirmed that Microsoft can no longer prevent the market from functioning properly. (…) The ruling is therefore welcome for its confirmation of the Commission's decision (…) but it is bitter-sweet, because the Court has confirmed the Commission's view that consumers are suffering at the hands of Microsoft”. Brad Smith, Microsoft's legal advisor, was more conciliatory. After thanking the Commission and the Court for all the work they have done in this matter, he told the press: “We are 100% committed to complying with every aspect of the Commission's [2004] decision”. Mr Smith even had the courtesy to congratulate the Commission on winning the case.
Summary of the ruling
The 2004 decision attacked Microsoft at two levels (see EUROPE 9501). With regard to the interoperability of its server systems, the Court of First Instance felt that Microsoft enjoyed a dominant position and that the conditions were met to uphold the Commission in its view that Microsoft had abused this dominant market position. Also, Microsoft's intellectual property rights cannot be invoked as they do not take primacy over the antitrust law in the case in hand. For the second part of the decision, the Court of First Instance also rallied to the Commission's interpretation, namely that the Media Player and the Windows operating system are two separate products, and that linking the Media Player to the Windows system makes market access difficult for potential rival software manufacturers. The only black point for the Commission in the ruling was that the Court of First Instance could find no legal grounds for the way in which the expert trustee had been imposed on Microsoft. The Commission had, among other things, conferred more rights upon its expert trustees to search the premises, personnel and documents of Microsoft than even the DG Competition had advocated. What is more, adding insult to injury, the Commission had ruled that Microsoft should pay for any costs incurred by the legal trustee.
Appeal or no appeal?
Although the Court of First Instance's ruling was expected to be the final outcome to this saga, the battle is not yet over for all concerned. The parties involved have two months in which to appeal against the Court of First Instance's ruling (or part of it) before the Court of Justice. Despite his mollifying tone, the Microsoft spokesman has not ruled out the possibility of an appeal but has stressed that it is necessary to read through the ruling, which is several hundreds of pages long, before a decision can be taken. Commissioner Kroes, for her part, did not take a stance on the possibility of an appeal on the part of the ruling concerning the expert trustee, but simply welcomed the fact that the lawfulness of having an independent expert trustee had not, as such, been brought into question. This aspect of the ruling does not affect the essential part of the 2004 decision, but it could be in the Commission's interest to appeal nonetheless if it considers that it is necessary to restore the expert trustee's integrity in order to defend the Commission's position in other decisions against Microsoft (see below).
Related, parallel cases may be affected
The validity of the 2004 decision is therefore confirmed, subject to possible appeal. But how is Microsoft behaving now? Ms Kroes complains of continued market distortion but Microsoft has said it complies with the Commission's original decision, and that it is therefore in line with Community law. The dispute in fact covers two cases that are legally quite separate, currently pending before the Court. The most relevant concerns Microsoft's appeal against the second series of fines (€280 million) imposed by Commission decision on 12 July 2006 - still for failure to comply with the original decision of 2004 (T-271/06). This last condemnation is based to some extent on information updated by the work of the expert trustee in 2005 and 2006 but the lawfulness of this work is brought into question by the Court of First Instance's ruling today. The hearing on this is expected in coming months, and Microsoft could argue that the evidence found by the expert trustee is to be ignored, pursuant to the 17 September ruling - which could considerably reduce the likelihood of a second Commission victory. (cd)