Abuse of Economic Dependence - The Centre for European Policy ...

Objectives of Article 82 13
products. In addition, the Commission stated that Microsoft did not give
customers the choice of obtaining Windows without Windows Media
Player and that the tying of Windows Media Player forecloses competition
in the media players market, and cannot be objectively justified. The CFI
argued that the Commission was correct to find that client PC operating
systems and streaming media players constituted separate products.
It further argued that as regards the abusive refusal to supply, the
Commission took issue with Microsoft for having used, by leveraging, its
quasi-monopoly on the client PC operating systems market to influence the
work group server operating systems market. In other words, Microsoft’s
abusive conduct had its origin in its dominant position on the first product
market. Even if the Commission were wrongly to have considered that
Microsoft was in a dominant position on the second market, that could not
therefore of itself suffice to support a finding that the Commission was
wrong to conclude that there had been an abuse of a dominant position by
Microsoft.
The decision of the CFI is somewhat surprising, since it upheld both
infringements, although the Windows Media Player did not seem to induce
consumer demand as a standalone product. Thus, there seemed to be no
actual consumer harm from bundling the Media Player with Windows. This
per se type approach contradicts the rule of reason approach that the
Commission seems to envisage using in Article 82 cases. 32
It will be interesting to see how the Commission will reconcile the thinking
of the CFI in its Microsoft judgment with the general trend towards an
effects-based approach in Article 82 cases. The decision of the CFI came as
a shock to the legal community as it was expected that the CFI would not
uphold the Commission’s arguments on the bundling abuse due to the lack
of consumer harm. It will be a step backwards in the development of the
competition case law if the trend towards consumer welfare objective in
Article 82 cases is diverted as a result of the Microsoft judgment.
Following the Discussion paper, the Commission issued guidelines on the
enforcement priorities in Article 82 cases in an attempt to clarify its
approach in the enforcement of Article 82. The enforcement guidelines are
less ‘radical’ compared to the approach when reform of Article 82 was raised
in the Discussion Paper. The guidelines seek to distinguish between competition
on the merits, which has beneficial effects for consumers and should
therefore be promoted and competition that is liable to lead to harmful foreclosure.
The assessment of market power will be dependent on the dynamics
of the market and the extent to which products are differentiated. A ‘soft’
32 Evidence on the Commission’s Enforcement Priorities in Applying Article 82 EC Treaty
to Abusive Exclusionary Conduct by Dominant Undertakings. http://ec.europa.eu/
competition/antitrust/art82/guidance/pdf.