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 12: Microsoft v Commission: A Pricing Perspective on Non-Price Abuses

Derek Ridyard and Markus Baldauf

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


Derek Ridyard and Markus Baldauf 1. INTRODUCTION This chapter discusses the economics of tying in the context of the Microsoft case. First, we consider the Microsoft tying practice in light of a broader economic framework that examines the relationship between tying and pricing abuses. We seek to explore the idea that it may be instructive to analyse tying, or ‘non-price’ abuses in general, within the framework that is normally used for the assessment of pricing abuses such as rebates and predation, and that there could be some insights from taking this non-standard perspective. Secondly, we critically appraise the reasoning of the European Commission and Court of First Instance (CFI) when analysing the alleged abuses conducted by Microsoft. We conclude that, despite the in-depth analysis of both abuses relating to server software interoperability information and media players, there remains considerable uncertainty about the precise interpretation of the CFI’s judgment. We question whether the Microsoft judgment has done much to clarify when tying practices by a dominant firm will be deemed to be in breach of Article 82 of the EC Treaty, and comment on the extent to which the CFI’s approach can be consistent with a truly effects-based enforcement system such as is proposed in the recently published Guidance on the Commission’s enforcement priorities under Article 82 EC (‘the Commission’s Article 82 Guidelines’).1 The remainder of the text is organized as follows. Section 2 gives some case background and section 3 discusses the economic principles of tying. Section 4 comments...

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