MS Antitrust: EC and USA authority compared

[James Love <love@cptech.org>]

Forwarded from the ABA Antitrust list

Subject: Microsoft
   Date: Sat, 7 Mar 98 13:40:19 UT
   From: "Mark Furse" <Furse-Mark@classic.msn.com>
     To: "aba at" <at-members@abanet.org>

Jamie Love asked whether it was correct that the EU is able to be very
flexible in crafting remedies for competition law breaches. The answer
is an unequivocal yes. The first point to note is that under EU
jurisprudence (the Michelin case), a company in a dominant position
(broadly a market share of 45%+ along with indications of other factors
that suggest dominance) is under a 'special responsibility' not to
impair competition. It is absolutely clear in EU law that a differential
standard operates for those undertakings which are encompassed within
article 86 and those which are not. Conduct that is lawful for a
non-dominant undertaking may be unlawful when engaged in by a dominant
undertaking. Further, Regulation 17 (the primary procedural instrument)
gives the Commission the power to by Decision require that the
infringement be brought to an end. Decisions have the force of binding
law, and the Commission, although subject to supervision by the Courts,
may employ a great deal of flexibility in determining the appropriate
resolution to an anticompetitive situation. Companies can be required to
divest, to publish price lists, to supply where they refuse to do so, to
licence, to share technology, to reduce prices, etc. The flavour of the
differences between US and EU law can be picked up from looking at the
essential facilities cases. You invented it, but we have arguably taken
it much further in a very short space of time (see M Furse, The
Essential Facilities Doctrine in Community Law' (1995) European
Competition Law Review 469-473 - if interested I can supply copies).

Note that MS appears to be bowing to EU-imposed pressure more readily
than it does to American proddings. See Financial Times, 3 March
(www.ft.com). If I am right in this conclusion it could be that the
Company recognises that the EU poses a considerable threat. While jail
is not an option, I'd point to the fact that Volkswagen were fined about
$130million a month ago (ECU 105m).