Jaeger new president CFI

Marc Jaeger of Luxembourg has been elected as new president of the CFI. See this press release (pdf).

Mr Jaeger was born in 1954; lawyer; attaché de justice, was delegated to the Public Attorney's Office; Judge, Vice-President of the Luxembourg District Court; teacher at the Centre Universitaire de Luxembourg (Luxembourg University Centre); member of the judiciary on secondment, and Legal Secretary at the Court of Justice from 1986.

He became Judge at the Court of First Instance in 1996

T-201/04, Microsoft v Commission

As I have written on this case before: in sum, this case was about Microsoft’s refusal to supply interoperability information and its bundling of Windows Media Player with the Windows client PC operating system.

Limited Review
The Court reiterated that it could only undertake a limited review, since this case involved a complex economic appraisal.

It held that judicial review was limited to checking whether the relevant rules on procedure and on stating reasons had been complied with, whether the facts had been accurately stated and whether there had been any manifest error of assessment or a misuse of powers.

Nevertheless, the Court stated that it could determine whether the evidence was factually accurate, reliable and consistent.

It could also determine whether that evidence contained all the relevant data that must be taken into consideration in appraising a complex situation and whether it was capable of substantiating the conclusions drawn from it.

This perhaps contradictory approach was used by the Court throughout its judgement. For instance, the Court first thoroughly assessed the accuracy of the facts on which the Decision of the Commission was based, to then find that the Commission correctly

- determined the degree of interoperability that should be attainable in the light of the objectives of Article 82 EC.

- found that the server operating systems were ‘optimised’ for the tasks which they were to perform.

- assessed the degree of interoperability by reference to what, in its view, was necessary in order to enabled developers of non-Microsoft work group server operating systems to remain viably on the market.

Intellectual property rights
The Court furthermore held that Microsoft’s communication protocols in question were protected by intellectual property rights.

It held that undertaking might refuse to third party a license to use product covered by intellectual property right except in exceptional circumstances, such as:

­- the refusal related to a product or service indispensable to the exercise of a particular activity on a neighbouring market;

- the refusal was of such a kind as to exclude any effective competition on that neighbouring market;

- the refusal prevented the appearance of a new product for which there was potential consumer demand.

Once it was established that such circumstances were present, the refusal by the holder of a dominant position to grant a licence might infringe Article 82 EC unless the refusal was objectively justified.

Correct analysis of Commission
The Court, however, found that the Commission’s analysis was not manifestly incorrect. The Court inter alia took into account that the Windows operating system was present on virtually all client PCs installed within organisations. Non-Windows work group server operating systems could not continue to be marketed if they were incapable of achieving a high degree of interoperability with Windows.

In sum, Microsoft’s dominant position was clear: Windows represented the ‘quasi-standard’ for those operating systems.

Non-Windows work group server operating systems could interoperate not only with Windows client PC operating systems but also, more generally, with the Windows domain architecture.

The absence of such interoperability with the Windows domain architecture had the effect of reinforcing Microsoft’s competitive position on the work group server operating systems market.

Microsoft had not demonstrated that the method which the Commission used when calculating market shares was vitiated by a manifest error of assessment or, consequently, that the estimates of market shares given at recitals 491 to 513 to the contested decision must be considered manifestly incorrect.

It was for the Commission to establish that the refusal to supply gave rise to a risk of the elimination of all effective competition. The Commission must base its assessment on accurate, reliable and coherent evidence which comprised all the relevant data that must be taken into consideration in order to assess a complex situation and which were capable of substantiating the conclusions drawn from them.

Furthermore, the Commission did not make a manifest error of assessment when it concluded that the evolution of the market revealed a risk that competition would be eliminated on the work group server operating systems market.

There was a risk that competition would be eliminated on that market because the market had certain features which were likely to discourage organisations which had already taken up.

The Commission’s finding to the effect that Microsoft’s refusal limited technical development to the prejudice of consumers within the meaning of Article 82(b) EC was not manifestly incorrect.

Bundling infringing Article 82 EC
The Court furthermore held that the Commission’s analysis of the constituent elements of bundling was correct and that it was consistent both with Article 82 EC and with the case-law.

The Court argued that while it was true that neither that provision nor, more generally, Article 82 EC as a whole contains any reference to the anti-competitive effect of bundling, the fact remains that, in principle, conduct would be regarded as abusive only if it was capable of restricting competition.

The Commission was correct to conclude that client PC operating systems and streaming media players constituted two separate products for the purposes of Article 82 EC and that the condition relating to the imposition of supplementary obligations was satisfied in the present case.


Foreclosure of competition
The Commission was also correct to make the following findings:

- Microsoft used Windows as a distribution channel to ensure for itself a significant competitive advantage on the media players market.

- because of the bundling, Microsoft’s competitors were a priori at a disadvantage even if their products were inherently better than Windows Media Player.

- Microsoft interfered with the normal competitive process which would benefit users by ensuring quicker cycles of innovation as a consequence of unfettered competition on the merits.

- the bundling increased the content and applications barriers to entry, which protected Windows, and facilitated the erection of such barriers for Windows Media Player.

- Microsoft shielded itself from effective competition from vendors of potentially more efficient media players who could challenge its position, and thus reduces the talent and capital invested in innovation of media players.

– by means of the bundling, Microsoft might expand its position in adjacent media-related software markets and weaken effective competition, to the detriment of consumers.

- by means of the bundling, Microsoft sent signals which deterred innovation in any technologies in which it might conceivably took an interest and which it might tie with Windows in the future.


TRIPS obligations
The Court reiterated that it was only where the Community had intended to implement a particular obligation assumed under the WTO or where the Community measure referred expressly to specific provisions of the WTO Agreements that the Community judicature must review the legality of the Community measure in question in the light of the WTO rules.

As the circumstances of the present case clearly did not correspond to either of those two situations, Microsoft could not rely on the TRIPS Agreement in support of its application for annulment of the contested decision in so far as it concerned the bundling of Windows and Windows Media Player.

Article 7 of contested decision without legal basis
The Court did however hold that the Commission had no authority, in the exercise of its powers under Article 3 of Regulation 17, to compel Microsoft to grant to an independent monitoring trustee powers which the Commission was not itself authorised to confer on a third party. The second subparagraph of Article 7 of the contested decision was therefore without legal basis and was hence annulled, since it entailed the delegation to the monitoring trustee of powers of investigation which the Commission alone could exercise pursuant to Regulation 17.

The Court furthermore held that the Commission had correctly calculated the fines and had correctly established the duration of the infringement. It dismissed the argument of Microsoft that the Commission had infringement the duty to state reasons in that context. Finally, it held that in the main action, it was appropriate that the costs be shared.

Link to judgment

Microsoft loses antitrust case

The CFI has delivered its Microsoft judgment. It finds that Microsoft has abused its dominant position. Analysis following soon.

Press release (pdf)

Link to judgment

Microsoft Ruling next Monday

Next week, the Court of First Instance will deliver what is probably one of its most important judgments ever. As “predicted”, the Court will next Monday rule on the validity of the €497 million fine imposed by the Commission on Microsoft for its bundling of the Windows operating system with its Media Player. In April 2006, I wrote several posts on the hearings in this case.

So the Court of First Instance is in the news again. The International Business Times has an extensive chronology of “17 years of EU, U.S. tussles with Microsoft”.

Reuters reports that it is unclear whether internal memos quoting Bill Gates, first offered as evidence but later withdrawn, will be allowed as evidence in this case.

The IHT also has a nice story on the case, quoting Erich Andersen, vice president and associate general counsel for Microsoft in Europe, as saying that the judgment will set precedents that "will rule the behavior of market leaders across Europe for many years to come".

In another article of Reuters, an Commission official is quoted as saying that "if we lose this one, we're in deep (trouble). It would put in question our ability to regulate competition in high-tech industries."

Link to case documents so far

Portuguese Presidency positive despite hurdles

During a press conference at the end of the Gymnich in Viana Do Castelo, Luís Amado, Portuguese Minister of Foreign Affairs has said that “the constructive positions and availability shown by all Member States, without exception, in carrying out the mandate received from the June's European Council will allow the Portuguese Presidency of the EU to pursue the ambition of seeing the Reform Treaty approved during the Informal Summit of Heads of State and Government that will take place in Lisbon next October."

However, some major hurdles have not been overcome.

Issues left unresolved include details of the revised voting system, the European Union’s external relations and the Charter of Fundamental Rights.

EUObserver reports that the European Commission and the European Parliament fear the they will loose control over the planned EU diplomatic corps.

This service will be set up under the “High Representative of the Union for Foreign Affairs and Security Policy". Although the title "Union Minister for Foreign Affairs" has been dumped, like the Constitution the Reform Treaty still proposes to merge the post of High Representative for the CFSP with the European Commissioner for External Relations.

According to EUObserver, the UK government has furthermore asked for reassurances that the European Court of Justice will not have jurisdiction on foreign policy matters, fearing that its jurisprudence could strengthen the powers of the European Union at the expense of the Member States.

This is despite the Reform Treaty proposing to amend Art.11 EU Treaty to exclude from the Court's jurisdiction virtually all foreign policy matters, except for sanctions against individuals and the dividing line between foreign policy and review of the EC Treaty/ TFEU.

This is much broader than the amendments proposed by the TECE, where the Court's jurisdiction was only excluded in respect of certain provisions.

Polish obstacles, but no UK referendum

European Union foreign ministers gathered yesterday in Viana do Castelo, a port town in northern Portugal (pictured right and above), to discuss the Reform Treaty and other matters. During this press conference (opens in Windows Media Player), the “positive atmosphere” was stressed, inter alia by Portuguese Foreign Minister Luis Amado. Nevertheless, some obstacles are emerging.

EU observer for instance reports that Poland wants to join the United Kingdom in the EU rights charter opt-out (protocol 7 of the Reform Treaty). Poland also wants to see the Ioannina compromise, whereby a member state can delay the EU’s decision making process if its vital interests are at stake, explicitly mentioned in the Reform Treaty text.

Furthermore, this Czech news site reports that the Czech government has some questions about the time table of the Reform treaty’s ratification, as it would rather not, holding EU's presidency in the first half of 2009, have the responsibility to solve arising disputes among the Member States. As agreed under the German Presidency, the Reform treaty is to be ratified by June 2009 when the next EP elections will take place.

On the other hand, AFP reports that the UK government apparently has no intention to hold a referendum on the Reform Treaty, British Foreign Secretary David Miliband stating that "parliament historically has always played the role of addressing institutional reform of the sort that we are now discussing ... and that parliamentary process is the right way of doing it rather than through a referendum."

Last sitting CFI President Bo Vesterdorf

As I wrote about in this post, four Judges of the Court of First Instance will retire, including its President. Ten other CFI Judges have been reappointed. On this occasion, a formal sitting will be held on Monday 17 September.

See this press release for more information (pdf).

ECJ to decide on new HQ ECB?

The European Central Bank is planning to construct its new premises on the former Großmarkthalle (pictured above) site in Frankfurt am Main, Germany. It is now temporarily based in Frankfurt's Eurotower. As is well known, the location of European Central Bank was fixed by the Amsterdam Treaty along with other major institutions.

However, the descendants of the original architect of the Großmarkthalle have brought legal proceedings before Frankfurt’s district court to prevent the market being rebuilt in the way the architect of the new HQ intends, claiming breach of copyright on the original layout of the building. Forbes now reports that the district court has suspended this case until the ECJ decides whether the district Court or the ECJ itself is competent.

Rules of Procedure Civil Service Tribunal

The Rules of Procedure of the Civil Service Tribunal, which I wrote about in this post, have been published in the OJ.

link (pdf)

Poland wants Polish AG

Polish Foreign Minister Anna Fotyga said yesterday that Poland will try to reform the European Court of Justice so that it gets its own Advocate General.

The ECJ currently has eight Advocates-general, five of which are normally drawn from the EU's 'big five' states Germany, France, the UK, Italy and Spain, with the other three posts rotating between the other member states.

Poland wants this number to increase as well as one of the advocates to be Polish.

Anna Fotyga, a former MEP, said that these proposals can count on support from the other New Member States.