Table of Contents

Microsoft on Trial

Microsoft on Trial

Legal and Economic Analysis of a Transatlantic Antitrust Case

New Horizons in Competition Law and Economics series

Edited by Luca Rubini

This fascinating and highly relevant book facilitates discussion on the difficult technical, legal and economic issues with respect to innovation, competition and welfare raised, through the span of more than a decade, by the US and EC Microsoft antitrust cases. It assesses their impact on the evolution of European and US laws on competition and intellectual property in the IT sector and beyond.

Chapter 4: The Microsoft Windows Media Player Tying Case

Jean-François Bellis and Tim Kasten

Subjects: economics and finance, competition policy, law and economics, law - academic, competition and antitrust law, european law, law and economics

Extract

Jean-François Bellis and Tim Kasten* INTRODUCTION 1. The ability to engage in product innovation by incorporating new features demanded by consumers, and by continually improving these features, is a key engine of economic progress. Indeed, this innovation is so common that it is often taken for granted. For example, consumers of high-technology products (such as mobile telephones, MP3 players and video game consoles) simply expect that current models will build on previous advances and offer new features. This trend is also seen in many low-technology products as well (e.g. consumers expect newspapers and magazines to add new sections and features over time). Software products are, of course, no different, and consumers have come to expect that their programs and operating systems will continuously provide updates with newer features. For example, every new version of the Windows and Apple Macintosh operating systems include features that were not present in the previous versions. Similarly, Internet search engines such as Google have improved their capabilities, and are now capable of searching news stories, images and maps in addition to merely searching websites. In its 2004 Microsoft Decision, the European Commission (the ‘Commission’) set forth its views on when such integration and improvement can constitute an infringement of EC competition law, at least when carried out by undertakings with market power. In its judgment of 17 September 2007, the Court of First Instance (‘CFI’) upheld the Commission’s Decision. This chapter addresses the current state of EC competition law1 in view of these developments....

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