IBT News Blog

Europe Fines Microsoft $1.3 Billion

(http://www.nytimes.com/2008/02/28/business/worldbusiness/28msoft.html)

This fine is of particular importance because not only of Microsoft's stature and size in the commerce, but because it highlights the effect of EU competition law (analogous to American antitrust law) on multinational companies.

The Department of Justice brought suit against Microsoft in United States District Court (U.S. v. Microsoft Corp. (Microsoft I), 87 F.Supp.2d 30, 35 (D.D.C. 2000). The United States' won in District Court, but the Court of Appeals for the D.C. Circuit reversed and remanded, and the DOJ decided not to retry the case (253 F.3d 34, 84 (D.C. Cir. 2001). Conversely the European Commission, which alleged the same conduct as the US case, was far more successful in its prosecution of Microsoft ((OJ 2007 L32/23).

US antitrust law focuses on promoting competition by protecting consumers through enforcement of the Sherman Antitrust Act. By contrast, EU antitrust law focuses on promoting competition by protecting competitors. In the EU, Article 82 of the EC Treaty- which Microsoft was found to violate- prohibits a company from abusing its dominat position so as to adversely affect trade between EU member states. The difference between US and EU antitrust law can be furthered evidenced by examining the GE-Honeywell Merger (see "Old Continent, New deal." 90-SEP ABAJ 51). The merger was approved by U.S and Canadian antitrust regulators but was barred by the European Commission on the groundt that it would reduce aerospace competition in the EU market.

The Microsoft case, and further antitrust cases, raise important implications for multinational corporations. What may be acceptable business practice in one jurisdiction might raise significant antitrust concerns in another. Large companies will have to be weary and pay close attention in current antitrust jurisprudence.

submitted by: JP

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