Abstract

The case primarily deals with the allegations that Microsoft had abused its market leadership status by using its dominant position in the Windows operating system (O/S) to gain market share in the work group server O/S business. In 1998, Sun Microsystems lodged a complaint with the European Commission (EC) that Microsoft was not disclosing the necessary information for facilitating interoperability between PCs using Windows operating system and servers using non-Microsoft operating systems. After conducting an investigation on this issue, the EC also claimed that Microsoft had been tying its Windows Media Player (WMP) to its Windows O/S affecting the rival media players. After investigating for more than five years, EC found Microsoft guilty and levied an historic fine of US$ 613 million and suggested remedies to the company’s products. Microsoft further appealed this ruling in the European Court of First Instance which heard the case between 24th and 28th of April 2006 and would give its ruling in the first quarter of 2007. The case puts forth some of the arguments of Microsoft and the EC during the hearing and analysts views on this issue.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study and analyze the antitrust allegations against Microsoft and the company’s response thereof
• Understand the importance of knowing rules of competition by companies operating in foreign countries
• and Examine the challenges of being a market leader and having a monopoly in a particular market.

Keywords

Microsoft, European Commission, Windows Operating System, Windows Media Player, Interoperability, Statement of Objections, Monopoly, EU Antitrust Rules, EU Competition Policy, Price Fixing Cartels, Innovation