Microsoft EU Antitrust Case


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Case Details:

Case Code : BENV005
Case Length : 16 Pages
Period : 1998-2006
Pub Date : 2006
Teaching Note :Not Available
Organization : Microsoft
Industry : Information Technology and Related Services
Countries : US, European Countries

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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.

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Excerpts

The Investigations

Meanwhile, in February 2001, the EC on its own initiative started investigations into other Microsoft products such as WMP, in the belief that WMP was being bundled into the Windows PC O/S. In the same month, Monti announced that he was combining the two charges against Microsoft - abuse of market leadership to gain work group server O/S market share and Sun's complaint on interoperability. In August 2001, the EC issued another SO, stating that it believed that Microsoft had violated European antitrust rules and that the company did not facilitate interoperability between Windows Server O/S and Third-party Vendor Server O/S. The EC also said that Microsoft was illegally bundling WMP along with its O/S...

EC Slaps Fine

In early 2004, Microsoft and the EC tried to reach a settlement over the issue. During the negotiations, Microsoft proposed to offer its competitors access to its technology and allowed three non-Microsoft media players to be sold along with Windows O/S. According to the company, this would help distribute more than one billion other media players during the next three years.

However, Monti wanted Microsoft to offer two versions of Windows O/S, one with WMP and other without WMP. He also wanted the company to promise not to add any software to Windows O/S in future. Microsoft did not agree to this saying that the addition of WMP to Windows was based on its business model and removal of WMP would affect the working of the O/S.

On March 18, 2004, Monti announced that the negotiations between Microsoft and the EC had failed. On March 24, 2004, after an investigation lasting more than five years, the EC concluded that Microsoft had broken EU competition laws (Refer Exhibit III for details of the laws) by abusing its market dominance in computer O/S.

Appeal to Higher Court

On June 07, 2004, Microsoft filed an appeal with the CFI, Europe's second highest court, against the EC's ruling. On June 25, 2004, Microsoft separately requested CFI, to suspend the remedial measures the EC had suggested to the company until the case was decided. Meanwhile, to enable CFI to take a decision without pressure, EC announced that it was temporarily suspending the remedial measures set out in the March 2004 ruling...

Excerpts Contd...>>


 

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