Microsoft EU Antitrust Case


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : BENV005 For delivery in electronic format: Rs. 400 ;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

Bundling of Software, Antitrust Proceedings, Misuse of Leadership Status
Case Length : 16 Pages
Period : 1998-2006
Pub Date : 2006
Teaching Note : Not Available
Organization : Microsoft
Industry : Software
Countries : US, European Countries

Abstract:

The case primarily deals with the allegations that Microsoft had abused its market leadership status by using its dominant position in the Windows operating system (O/S) to gain market share in the work group server O/S business. In 1998, Sun Microsystems lodged a complaint with the European Commission (EC) that Microsoft was not disclosing the necessary information for facilitating interoperability between PCs using Windows operating system and servers using non-Microsoft operating systems. After conducting an investigation on this issue, the EC also claimed that Microsoft had been tying its Windows Media Player (WMP) to its Windows O/S affecting the rival media players.

After investigating for more than five years, EC found Microsoft guilty and levied an historic fine of US$ 613 million and suggested remedies to the company's products. Microsoft further appealed this ruling in the European Court of First Instance which heard the case between 24th and 28th of April 2006 and would give its ruling in the first quarter of 2007. The case puts forth some of the arguments of Microsoft and the EC during the hearing and analysts views on this issue.

Issues:

Study and analyze the antitrust allegations against Microsoft and the company's response thereof

Understand the importance of knowing rules of competition by companies operating in foreign countries

Study and analyze the behavior of companies facing lawsuits

Examine the challenges of being a market leader and having a monopoly in a particular market

Contents:

  Page No.
Introduction 1
EC Issues 'Statement of Objections' 2
The Investigations 4
EC Slaps Fine 5
Appeal to Higher Court 8
Microsoft Complies But... 9
The Hearing 10
The Road Ahead 12
Exhibits 13

Keywords:

Microsoft, European Commission, Windows Operating System, Windows Media Player, Interoperability, Statement of Objections, Monopoly, EU Antitrust Rules, EU Competition Policy, Price Fixing Cartels, Innovation

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