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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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.
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Excerpts
The Investigations
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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...
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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.
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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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