## Facts

- The European Commission found Microsoft dominant in client PC operating systems (over 90% share) and influential in work group server operating systems (WGOS), where interoperability with Windows clients and servers was commercially necessary.
- In 2004, the Commission determined Microsoft abused dominance by (1) refusing to disclose and license interface/protocol information needed for rivals’ WGOS to interoperate with Windows, and (2) tying Windows Media Player (WMP) to the Windows client OS by supplying Windows only with WMP preinstalled.
- The Commission defined separate product markets for client PC operating systems, WGOS, and streaming media players, and concluded Microsoft leveraged client OS dominance into adjacent markets.
- For interoperability, the Commission treated the withheld protocol specifications as indispensable for rivals to deliver WGOS products capable of “full interoperability” in Windows-centered networks; it found Microsoft’s conduct risked eliminating effective competition and reducing innovation.
- For tying, the Commission found Windows and media players were distinct products because consumers and OEMs demanded and used alternative media players; bundling WMP with Windows created default ubiquity and threatened foreclosure of rival players.
- Remedies ordered included: disclosure and licensing of interoperability information; offering a fully functional Windows version without WMP; and acceptance of an independent monitoring trustee funded by Microsoft.
- Microsoft sought annulment (in whole or part) and reduction or cancellation of the approximately €497 million fine.

## Issues

1. Whether Microsoft’s refusal to disclose and license interoperability information to rival WGOS suppliers constituted an abuse of dominance under Article 82 EC (now Article 102 TFEU), including where information was protected by intellectual property and trade-secret claims.
2. Whether tying WMP to the Windows client OS constituted abusive tying under Article 82 EC.
3. Whether the Commission’s remedies (mandatory disclosure/licensing, unbundling, fine, and monitoring trustee) were lawful and proportionate.

## Decision

- The court largely dismissed Microsoft’s action and upheld the Commission’s findings of two abuses of dominance and the fine.
- The court affirmed that Microsoft’s refusal to supply and license indispensable interoperability information, in the circumstances, infringed Article 82 EC.
- The court affirmed that tying WMP to Windows met the elements of abusive tying: dominance in the tying product, distinct products, coercion (no Windows-without-WMP option), and likely foreclosure.
- The court upheld the disclosure/licensing remedy and the requirement to offer a fully functional Windows version without WMP as proportionate.
- The court annulled the monitoring trustee portion, holding the Commission exceeded its authority by delegating oversight powers to a trustee at Microsoft’s expense.

## Legal Principles

- Judicial review of complex economic or technical assessments in competition cases verifies procedural regularity, factual accuracy, consistency and reliability of evidence, absence of manifest error, and absence of misuse of powers.
- A dominant undertaking’s refusal to supply or license protected interoperability information may be abusive in exceptional circumstances where the information is indispensable, the refusal is likely to eliminate effective competition in a related market, consumer harm is shown (including through reduced innovation), and no objective justification is established.
- The “new product” condition from prior refusal-to-license case law may be satisfied where the refusal impedes development of improved or more innovative products, not only where it blocks a wholly novel product category.
- Intellectual property rights are not absolute defenses to an abuse finding; competition law may require compulsory licensing in exceptional circumstances without necessarily breaching international IP obligations as interpreted within EU law.
- For abusive tying, distinctness of products turns primarily on demand-side factors (consumer demand and market practice), not merely technical integration.
- Tying can be abusive even if the tied product is supplied at zero explicit price, where bundling with a dominant platform is capable of foreclosing rivals.
- Remedies must be proportionate and within the Commission’s statutory powers; the Commission may not outsource core investigative or enforcement functions to a private trustee in a manner not authorized by the governing regulation.

## Conclusion

The court upheld the Commission’s determination that Microsoft abused dominance by withholding indispensable interoperability information from WGOS rivals and by tying WMP to Windows, sustained the nearly €500 million fine, confirmed disclosure and unbundling remedies as proportionate, and struck down only the monitoring trustee mechanism as exceeding the Commission’s authority.


Microsoft Corp. v. Comm’n of the Eur. Cmtys., Case T-201/04 (Gen. Ct. Sept. 17, 2007)