REFUSAL TO SUPPLY IN EC COMPETITION LAW

Dominant firms are, if not exaggeratedly, regarded as Trojan horses within the EC competition law that should be searched closely.  Even their right to choose their customers, their freedom to cooperate with their competitors are under heavy scrutiny from the competition law for the purpose of existence of competition. Although competition in essence tend to create winners of the game, the duty of competition law is not regarded as determining the winners but to ensure fair play and thus maximize the benefits of the game for the audience (consumers). From this perspective, dominant firms have a very duty to cooperate with their customers and competitors for the continuance of the game and to ensure fair play. Dominant firms any tactics that would lead exclusion of other players from the game, thus considered as abuse within the terms of EC competition law.

Within the competition law literature refusal to supply cases tend to be classified into different categories such as refusal to supply spare parts[1], refusal to supply to existing customer and new customers, refusal to license[2] or refusal to grant access to essential facilities[3]. However most accurate distinction is tends to be according to essentiality of the product that is being requested. Thus there is considerable distinction between essential and non-essential inputs. While the former one is deals with the monopoly derive from the product itself, such monopoly acquired by owning an intellectual property right, or owning a facility such as port or harbour, however in the latter line case law there is no feature like this, and what is assessed as abusive is the acts or tactic of dominant firms to strengthen their dominant position.[4] This paper considers the place of refusal to supply as an abuse of dominant position under the EC competition Law. In the subsequent parts of the paper, the conditions for abuse for different kinds of products will be analysed by referencing the established case law on the subject.

WHAT MAKES A REFUSAL ABUSIVE?

For an abusive conduct by a dominant firm, at the outset, first reference will be article 82 EC.[5] Refusal to supply is not listed within the non-exhausted list of examples[6], however concerned as an exclusionary abuse[7] which might fall within the ambit of article 82 (2) (b); “limiting production, markets or technical developments (competitors’) to the prejudice of competitors.” [8]

Therefore within the context of competition law context abusive nature of refusal to supply depends on the excludability of such refusal. On the other hand obligation imposed to deal with competitors draw attention to the doctrine of freedom to contract.  Competition law deals with refusal to supply cases within a counterbalance between two factors; first, freedom to contract of dominant firms and in return the dynamic efficiencies created by this freedom and second preservation of a healthy competition in the free market.[9] Dominant firms’ refusal to supply in certain circumstances therefore might constitute an abusive conduct so far as it has anticompetitive effects as elimination of all competition on the person that requested product.[10] The anticompetitive effects of the refusal therefore firstly under an examination of market conditions.  However most important element of what may lead an abuse, is the indispensability of the product requested, in which if the product requested is indispensable enough to exclude competitor and eliminate all competition on the part of it, it will lead an abusive conduct. Some non-exhaustive objective justifications may persuade the Court and authorities about the absence of abuse; however they are like exceptions to a general rule and interpreted restrictively. Within all these considerations, Court case law, for those who try to classify and categorise it, is very floating and uncertain. As long as we have, under certain circumstances, or conditions refusal to supply is abusive for refusal to supply (tangible property) cases and this rules applies to the intellectual property rights under exceptional circumstances, if introduction of new product is prevented.[11] However we are not certain about if in the future, this rule is constantly applied even recent case law indicates that there is erosion in this condition. On the other hand we know that Competition authorities have been stricter in the newly liberalized sectors,[12] where the facilities are necessarily essential. All of these illustrations will be discussed in the subsequent parts of the paper.

 

A)  “[E]verything ultimately turn on the assessment of indispensability”[13]

At the outset the essentiality of a good or service or a facility or an intangible property is quite different from the desirability of such assets.[14] Court case law on the subject matter, which will be discussed below in detail, conditioned essentiality with indispensability of such requested asset for the competitors to continue to compete. Established case law indicates that requested asset is indispensable in so far if it can not be replicated or duplicated by any reasonable means.[15] The impossibility for duplication of such asset therefore might be natural such in the cases of ports’ harbours, might be legal such in the case of intellectual property or economic such when it is [u]navoidable uneconomic.[16] Although in defining essentiality of an asset court assessment tend to be discretionary on the case by case analysis,[17] in general, according to established case law essentiality of an asset depends on the degree of substitutability of requested product. That is whether an asset has [r]eal or potential substitute defines the indispensability of such asset.[18]

When the essentiality of the requested product for the competitive market is assessed, in this regard elimination of all competition on the part of competitors requested product has constituted the centre piece in the abusive character of the refusal. Here what should be noted that among the markets the very distinction is [t]he market where the undertaking refusing to supply holds a dominant position and a neighbouring market on which the product or service is used in the manufacture of another product or for the supply of another service. [19]

 

B)  MARKET CONDITIONS

Whatever the intentions for the refusal to supply, as long as such refusal would lead an exclusionary consequence which eliminates competition in the downstream[20] market, it became an abusive conduct. Definition of the downstream market in this regard constitutes a focal point in determining whether the refusal is abusive or not. However it has been seen that Commission, in the newly liberalizing sectors, defined the downstream markets quite narrowly.[21]  Thus whereas the competitive relevant markets treated within the context of freedom to contract and within the sensitive balance between efficiencies, and specifically from the allocative efficiency and dynamic efficiency dimensions, in the markets where the competition is relatively lesser or absent, freedom to contract justification largely ignored and the balance shifted in favour of allocative efficiencies.[22]

 

C) NATURE OF PRODUCT THAT IS REQUESTED

 

Is there any distinction between the natures of product requested in the application of conditions laid down by the established case law? At the outset court’s case law indicates a considerable distinction is between the essential and non essential inputs. On the other hand when requested input in question is essential as it is indispensable for the competitors to compete, then Court redraws the scope of certain circumstances (In the refusal to license cases exceptional circumstances.)[23] It would be misunderstanding to suggest that all the essential inputs regardless their nature considered within the same manner. However established case line of the Court illustrate that; the market conditions, and most importantly indispensability of the product for the competitors is the actual essential input rather than the nature of product itself in determining the abusive nature of refusal to supply within the meaning of article 82 EC.

Thus at the moment a quick introduction of the conditions established by the case law of the Court can be established as; a refusal in general is abusive if without objective justification, the product requested is indispensable enough to carrying the requested party’s business/ or indispensable enough to prevent introduction of new product with a specific, constant and regular potential consumer demand[24]  is more likely eliminate all competition on the part of that party.

 

NON ESSENTIAL INPUTS

 

In regard to dominant firms’ refusal to deal with their customers and competitors, as argued above Court case law at the first hand established with an emphasis on the distinction is lies between non-essential inputs and essential inputs that are being refused.  The reason for  this distinction is given in this present paper is to illustrate that abuse of dominant position in the means of refusal to supply is at the outset independent from the essentiality of the product that is requested. Although it has been emphasised that Court’s assessment of refusal to supply tend to be independent from the nature of product and closely related with the indispensability of product for the relevant market in question, this does not mean that if there is no essential product, there would be no abuse. Additionally As indicated above, the basic rationale of the refusal to supply is to [p]revent distortion of competition.[25]  Thereby refusal to supply of whether essential or not essential input is abusive so far as [w]hen dominant firms harm competitors so as to obtain the power to reduce output and increase prices.  In this context United Brands[26]s refusal to supply to its existing customer, Olsen, in retaliation for latter’s participation in an advertisement campaign of the UBC’s one of the rivals, Standard fruits, constituted an abuse according to article 82. Although there was no essential product ceased to be supplied, the case demonstrated the very fact that use of refusal which might strength the dominant position on the relevant market as a deterrence and disciplinary measure for small participants may lead an abuse by [o]nly allowing firms dependant upon the dominant undertaking to stay in business.[27] Similarly refusing to supply by termination of a contract when the customers became competitors, perceived as an exclusionary abusive even there is no essential input in question. [28]

 

ESSENTIAL INPUTS AND ESSENTIAL FACILITIES DOCTRINE

 

The term of essential facility generally has attributed to the infrastructural resources such as [a] port, an airport or a pipeline.[29] The monopoly over such infrastructural resources either by legal reasons or natural reasons, within the context of modern competition law has established a duty for the owners of such facilities to cooperate with their competitors due to indispensability of facility for the existence of competition. Not surprisingly with the increasing liberalization of state monopolies and privatization in Europe, doctrine intensively invoked.[30] The Sealink/B&I Holyhead[31] decision of the Commission is the leading authority on the application of essential facilities doctrine in the European competition law. In that particular case the term of ‘essential facility’ is defined as a “[f]acility or infrastructure without access to which competitors cannot provide services to their customers.”[32] Sealink’s, (the owner of Holyhead port in Wales) attempt to change the ferry time tables which would disturb the B&I (A rival ferry operator using the same port) and cause competitive disadvantage is considered as an abuse of dominant position. [33] It is noteworthy that the competitive disadvantage is so far from the condition of elimination of all competition.

As the definition of the essential facility illustrates that, the dominant firm already enjoys a kind of monopoly over the facility which it owns,[34] it might be suggested that logically doctrine developed not to protect competition but to create competition in the relevant market. By taking into account this logic, Advocate Generals critics in the Bronner case[35] seems irrelevant in the fields of essential facilities, when the competition authorities seek to prevent the competitive disadvantage in the relevant market. Therefore it might be suggested that protection of competitors rather than competition is natural consequence of essential facilities doctrine. Thus the essential facilities doctrine necessitates a very careful application since it deviate from the essential aim of the competition law. Here Areeda convincingly points out that the doctrine should be invoked in very limited circumstances and in those areas where [p]laintiff’s competitive vitality and the plaintiff is essential for competition in the marketplace.[36]

In the application of essential facilities doctrine it might be implied that rather than facility itself, the indispensability of the facility for the (potential) competitors is the main concern. Thus theoretically doctrine may easily be extended to those areas where a dominant firm owns an [i]nput which is necessary for competitors to compete.[37] This input either can be a port, harbour or an intellectual property right.[38] Within this wide application area, refusal to use of such input may lead to an abuse of dominant position when the input is essential enough for the existence of competition

 

COMMERCIAL SOLVENTS RATIONALE: “CERTAIN CIRCUMSTANCES”

EC competition law’s departure for the dealing with the abundant nature of refusal to supply cases is the Commercial Solvents[39] where question was whether dominant firm’s refusal to supply raw materials to its existing customers in the downstream market would lead an abundant refusal in regard to abuse of dominant position rules of article 82 EC. The monopoly of the CSC in the aminobutanol and nitropropane market, for the Court, was enough to create indispensability for the raw material. In this respect CSC decision to extend its activities to the derivative market and accordingly cease to supply to the existing customer (Zoja) in this downstream market regarded as ‘[r]isks eliminating all competition on the part of this customer, is abusing its dominant position.’[40]

The findings in the Commercial Solvents consolidated with the telemarketing[41] decision of the Court when the RTL Television used its dominant position in television advertisement market in French-speaking Belgium as leverage in the telemarketing advertisement market by [r]efusing to sell [CBEM] television time on the RTL station for telephone marketing operations using a telephone number other than that of information publicite.[RTL’ s exclusive agent for television advertising][42] Decision was given in parallel to the Commercial Solvents judgement established the scope of certain circumstances  by referencing there conditions; (i) indispensability of the product, (ii) the possible risk for eliminating all competition from such undertaking and (iii) lack of objective justification.[43]Actually there are no clear differences between Commercial Solvent case line and the essential facilities doctrine.[44] The only considerable difference is the importance given to the market conditions.

The conditions for the abusive character of the refusing to supply by a dominant undertaking elaborated with the Oscar Bronner[45] case and the notion of indispensability gained a momentum. The sequence of events started when the Mediaprint, major newspaper publisher in Austria refused to include Bronner’s small circulation paper, Der standard, in its home distribution network.  While it was economically impossible for the Bronner to establish its own home delivery network, such refusal resulted with its obvious competitive disadvantage. In his opinion, the Advocate General Jacobs  emphasized the primary aim of the competition law is t[o] prevent distortion of competition…rather than to protect the position of particular competitors.[46] In his opinion he further indicated a sensible balance between freedom to contract of undertakings and circumstances necessary for intervention to such freedom is built on consumers’ interests.[47] Such balance may swing in favour of freedom to contract or obligation to cooperate by taking into consideration very interest of consumers both in the long run and in the short run. [48] Court’s findings were similar to the Advocate Jacobs. The substitutability test[49] used in the Bronner, created a new turning point for the definition of indispensability. Whereas substitutability of a facility is determined by the impossibility of the duplication or replication of facility[50] in question due to lack of [a]ctual or potential substitute[51], the less substitutable facility is more indispensable. Within this logic, according to Court’s findings in the Bronner, the economic impossibility of the Bronner to establish its own home delivery services did not render the Mediaprint’s home delivery service indispensable.

Although it is appreciable that the Bronner judgement limited the scope of certain circumstances that may render the refusal to supply abusive, on the other hand it is also recognisable that existence of competition in the market played important role to establish clear conditions for the abusive nature of refusal. [52]

 

REFUSAL TO LICENCE

Within the established case law regarding refusal to supply cases, it is seen that essential facilities doctrine anonymously applied to the sphere of Intellectual property rights under a different name, compulsory licensing.  It has been also so far illustrated that when the concern is refusal of an essential input, everything turns on the indispensability of that product for the competitors to compete. [53] When such indispensability derive from impossibility of replication due to legal restraints other than economic or natural restraints, then a suitable ground for the tension between Intellectual Property law and Competition Law is created. Pierre Régibeau and Katharine Rockett ones pointed out that; “IP law should limit itself to properly assigning and defending property rights while Competition Law should be concerned with the use of such property rights.”[54](emphasis not added) Although legal protection under the intellectual property regime provides IP owner an exclusive exploitation of its property, this freedom does not however immune from the scrutiny of competition law.[55]

 ‘[t]he very subject-matter of … exclusive right’[56] is first time questioned in the Renault and Volvo cases. Both of these cases were concerned with the firms’ design rights on car spare parts and it is first time submitted by the court’s Volvo judgement that ‘refusal to grant such a license cannot in itself constitute an abuse of  dominant position,’[57]unless it involves certain abusive conduct. [58] In its Volvo judgement court gave four examples of what may constitute certain abusive[59], however this non-exhaustive list of wrongs fell short in describing the

 

MAGIL- LADBROKE AND IMS: NOTION OF EXCEPTIONAL CIRCUMSTANCES

A very intense round between intellectual property law and the competition law eventuated on the grounds for the weekly television guide. It is the Magill[60] case that, intellectual property rights of the firms attributed as an essential facility which is indispensable for the creation of a new product.[61] RTE, BBC and IBA televisions refused to supply their copyrighted information in their TV listings to the Magill, who sought to publish a comprehensive TV guide including these main three televisions programme listings. It was held that in exceptional circumstances[62]  when refusal to provide basic information…prevented the appearance of a new product,[63] exclusionary feature of the IP rights no longer provides a shield for the application of article 82 EC. It should also be noted that the dominant position of the three television channels did not resulted form their Intellectual Property Rights but their market share in the weekly TV magazines market.[64]

Magill case, a fortiori, introduced new criteria in addition to the existing conventional abusive refusal to supply criteria. That is ‘right to exclude’ protected by the intellectual property law under an exceptional circumstance such as introduction of new product with the potential consumer demand, limited by the scrutiny of competition law rules. Although in first look new product invention indicated a different treatment to the intellectual property by increasing threshold in conditions of abusive nature of refusal to license cases, it is created as one of the exceptional circumstance[65] by which has no cumulative application when the concern is about the intellectual property.

Subsequently Ladbrok[66]e case, further clarified scope of exceptional circumstances which might renders refusal to license abusive. In the Ladbroke a French race course organizer, Societe De Courses, refused to supply copyrighted French sounds and images to a Belgian horse race betting operator. CFI judgment in the case clarified that refusal to license is not abusive unless [t]he introduction of a new product for which there is potential demand might be prevented.[67] Furthermore court held that there should be ‘no real or potential substitute’[68] to classify a product or service as indispensable. The fact that Ladbroke case, unlike Magill, did not deal with a new product, rather the essentiality of the French sounds and images in the Belgian horse race betting market questioned. Due to fact that sought copyrighted product was not indispensable enough to eliminate all competition in the downstream market, CFI held that Societe de Courses refusal did not amount an abundant conduct. It is appreciable to state here that as discussed above with the Bronner judgement of the court the concept of indispensability gained a more clear definition. In its judgement the Court first defined the Magill case as an exceptional one which [c]opyright provided a permanent barrier to entry of a new product on the market,[69] and in relying on its Magill’s justification distinguished the degree of indispensability in the Bronner case from the impossibility in the Magill case.

IMS[70] case took departure with the findings of the Magill. The question was whether IMS’s refusal to license its copyrighted Brick Structure System would be considered under the exceptional circumstances. Since there was no new product intended to be introduced but the new competitors were asking share of copyrighted system to compete with IMS within the same market. The fact that for the IMS competitors, AZYX and NDC, the Brick Structure Format which become a de facto pharmaceutical industry standard,[71] was indispensable for their activities in the same market with IMS. Commission as an interim measure required the IMS to provide such license to competitors. Thus the particular case furthered the tension between Intellectual Property law and competition law when the commission by referring to the Ladbroke case, ignored the new product criteria of Magill in the application of exceptional circumstances to the IMS case.[72] Notwithstanding the Court in the IMS case held that, in order to render a refusal to supply abusive, three cumulative [73]conditions should be satisfied. Accordingly, (i) an unjustified refusal of an indispensable asset , (ii) preventing emergence of new product which there is potential customer demand (iii)  which exclude any competition in the secondary market.[74]  However it is noteworthy that Court by referring to the Bronner case, held that “The fact that the home-delivery service was not marketed separately was not regarded as precluding, from the outset, the possibility of identifying a separate market…it is sufficient that a potential market or even hypothetical market can be identified.”[75] The applicability of refusal to supply cases in the potential or hypothetical market, surely caused some uncertainties about the classical market definition has been developed since the Commercial Solvents.[76]

The very effect of the IMS has noticed in the Microsoft[77] case which concerned with Microsoft’s refusal to full disclose its software interoperability information. Court of First Instance applying the test of Magill and IMS concluded the full disclosure is necessary since the [W]indows represented the quasi-standard for client PC operating systems[78]  and in the absence of such interoperability, Microsoft would prevent development of new features by other work group operating systems [t]o which consumers attach great importance.[79]  At the outset the first important fact derived from the Microsoft case was whether exhaustive or not, the vagueness of the new product criteria of the exceptional circumstances. The criteria of a new product with constant consumer demand is not actually met, since neither SUN nor the Commission says nothing about the creation of new product with the constant customer demand exists.[80]  Both IMS and Microsoft were in fact considered in the same grounds that both intellectual property rights were representing a de facto standard. Thus they automatically considered as indispensable for carrying out business on the part of competitors.

In a nutshell in the Microsoft case, Commission established its claims on the [a]buses of a dominant position that limit technical development to the prejudice of consumers.[81] As David Howarth convincingly argued [I]f abuse under Art.82 is defined as the prevention of “technical development” surely every refusal to license which is not mere reproduction or cloning will fulfil this criterion.[82]

 

 

CONCLUSION

First of all it might convincingly argue that be submitted that indispensability of a product is the key element of the conditions lay down by the court case law. As far as indispensability of a product is concerned one might speak about the existence of monopoly over the product due to that product would not have any real or actual substitute.[83] The product which is indispensable to carrying on businesses of requested party in the downstream market does not have to reduce the incentives to innovate[84], however surely this does not to be the same for if the requested party is in the same market such in the case of IMS. Moreover even if one assume that either in downstream market and in the same market, compulsory sharing reduces incentives to innovate and therefore dynamic efficiencies within the market, this is not only the case for intellectual property but also quite connected with the tangible goods as well. If it is assumed that Mediaprint by law forced to share its investment with the small circulation paper, this surely will reduce the incentives on the part of Mediaprint (and other potential future investors may be) for its future investments. [85] However this does not also mean that intellectual property should be treated within the same manner with the tangible property. As discussed earlier in this paper intellectual property in theory may be regarded as an essential facility, it is just because IP rights provides a legal restraint for duplication of requested product. However Intellectual Property right is an exclusive right since it is there to exclude others. Within this dichotomy, the discussions turn around whether intangible goods, deserves a more privileged treatment. Here it should be noted that Court case law actually makes a distinction between that intangible goods and tangible ones, even existence of new product requirement can be seen one of the most important distinction between the compulsory sharing and refusal to supply goods cases. There is considerable and rightful privilege of intellectual property in from of Court. Even the Court and competition law tend to be protective of the rights of dominant firms when their rights are not protected by the intellectual property Law.[86] According to recent developments in the refusal to supply case law, although there have been a privileged position of IP rights, the difference is slightly thin which results overlaps between the scopes of certain circumstances and exceptional circumstances, especially when the market is not enough competitive.  In essence as the borderline of the exceptional circumstances doctrine is the point [w]here the consumer benefit outweighs the risk that there will be a diminution of dynamic efficiencies.[87]  Although it is not certain whether or not by compulsory licensing the consumer benefits prevails, it is at the end Commission and the Court’s assessment. As Derclaye’s in her no copy right no work thesis, emphasised beside all other features that differentiate the intangible products from the others, innovation creation is in one hand, As Ritter argued that probability of abusive use of intellectual property by dominant firms and its potential handicap before the second generation innovations [88] (as in the new product criteria of Magill) on the other hand, compulsory sharing posses very complex considerations. These complexities are one of the ultimate reasons why the court case law on the refusal to supply cases is open-textured. Thus it might be reasonably argued that, if the results is depends on complex calculations of efficiencies, there would be some sort of discretion rather than having a narrowly scoped, exhaustive list of conditions what will constitute an abuse what will not.

 

 

 

 

 

 

 

 

BIBLIOGRAPHY

 

 

BOOKS

 

G. Monti EC Competition Law (Cambridge: CUP, 2007)

 

Jones A & B. Sufrin, EC Competition Law: Text, Cases and Materials, 3 Ed. (Oxford: OUP,2007)

 

R Whish, Competition Law, 5th ed. (London: Butterworths, 2003).

 

O’Donoghue R& J.A. Padilla, The Law and Economics of Article 82 EC (Oxford, Hart Publishing, 2006)

 

JOURNAL ARTICLES

 

Dercayle E., 2003. Abuses of dominant position and intellectual property rights: a suggestion to reconcile the community courts case law. World Competition, 26(4),685-705

 

Ritter Cyril, “Refusal to Deal and „Essential Facilities“: Does Intellectual Property Require Special Deference Compared to tangible property” World Competition 28(3) (2005) pp.282-285

 

D. Howarth, K. McMahon, “Windows has performed an illegal operation”: the Court of First Instance’s judgment in Microsoft v Commission” ECLR, 29, 2, (2008)

 

 

WORLD WIDE WEB

 

James Killick, IMS and Microsoft Judged in the Cold Light of IMS, December 2004 [online], available: http://www.whitecase.com/files/Publication/52195d09-658c-45e7-a0d9-6b9d480e2fbc/Presentation/PublicationAttachment/d49ad7c5-3a2a-4324-aa65-74df0ecc39fc/00688ny_killick_article_byline_02.pdf [accessed 10 May 2008].

 

Régibeau P. & R. Katharine, The Relationship Between Intellectual Property Law and Competition Law: An Economic Approach, University of Essex and CEPR Revised, June 2004 [online], available: http://www.essex.ac.uk/economics/discussion-papers/papers-text/dp581.pdf [accessed 10 May 2008].

 

 

CASES

 

 

Joined Cases 6/73 and 7/73, Istituto Chemioterapico Italiano Spa and Commercial Solvents Corp. v. Commission, [1974] E.C.R. 223

 

Case 27/76, United Brands Co and United Brands Continental BV v. Commission, [1978] E.C.R. 297.

 

Case 238/87, Volvo AB v. Erik Veng Ltd, [1988] E.C.R. 6211.

 

Case T-504/93, Tiercé Ladbroke SA v. Commission, [1997] E.C.R., II-923

 

BBI/Boosey & Hawkes : Interim Measures [1987] OJ L286/36 [1988] 4 CMLR 67

 

British Midland v. Aer Lingus [1992] O.J. L 96/34

 

Sealink/ B&I Holyhead: Interim Measures [1992] 5 CMLR 255

 

Cases 241/242/91P, RTE and ITP, [1995] 4 CMLR 718

 

Case 311/84, Centre Belge d’Etudes du Marche-Telemarketing (CBEM) v CLT SA [1985] E.C.R. 3261.

 

Case C-418/01 IMS Health GmbH & Co OHG v. NDC Health GmbH& Co KG [2004] ECR I-5039 4 CMLR 1543

 

Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112

 

Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112 Opinion of A.G. Jacobs, May 28, 1998

 

T-201/04 Microsoft Corp v Commission of the European Communities [2007] 5 C.M.L.R.

 

 

 

 

 

 

 


[1] Case 238/87, Volvo AB v. Erik Veng Ltd, [1988] E.C.R. 6211.

[2] Joined Cases 6/73 and 7/73, Istituto Chemioterapico Italiano Spa and Commercial Solvents Corp. v. Commission, [1974] E.C.R. 223; Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112 Opinion of A.G. Jacobs, May 28, 1998

[3] In some extends British Midland v. Aer Lingus [1992] O.J. L 96/34

[4] See Case 27/76, United Brands Co and United Brands Continental BV v. Commission, [1978] E.C.R. 297.

. See Ritter Cyril, “Refusal to Deal and „Essential Facilities“: Does Intellectual Property Require Special Deference Compared to tangible property” World Competition 28(3) (2005) pp.282-285 Ritter also makes similar distinction between essential facility case line and refusal to deal.

[5] EC Treaty Article 82

[6] G. Monti EC Competition Law (Cambridge: CUP, 2007) p. 160

[7] Jones A & B. Sufrin, EC Competition Law: Text, Cases and Materials, 3 Ed. (Oxford: OUP,2007)p. 529

[8] O’Donoghue R& J.A. Padilla, The Law and Economics of Article 82 EC (Oxford, Hart Publishing, 2006) p. 408

[9] Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791

[10] See Joined Cases 6/73 and 7/73, Istituto Chemioterapico Italiano Spa and Commercial Solvents Corp. v. Commission, [1974] E.C.R. 223

 

[11] Cases 241/242/91P, RTE and ITP, [1995] 4 CMLR 718

[12] Monti (2007) p.231

[13] Sufrin (2007) p. 571

[14] Sufrin (2007) p.542

[15] R Whish, Competition Law, 5th ed. (London: Butterworths, 2003). p.674

[16] Whish (2003)

[17] Such as what has been regarded indispensable in Commercial solvents, not regarded in Oscar Bronner Case. See also Ritter (2005) 283

[18] Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791

[19] D. Howarth, K. McMahon, “Windows has performed an illegal operation”: the Court of First Instance’s judgment in Microsoft v Commission” ECLR, 29, 2, (2008) p.119

[20] See Joined Cases 6/73 and 7/73, Istituto Chemioterapico Italiano Spa and Commercial Solvents Corp. v. Commission, [1974] E.C.R. 223

[21] Whish (2003) p.675

[22] See Sealink/ B&I Holyhead: Interim Measures [1992] 5 CMLR 255

[23] Cases 241/242/91P, RTE and ITP, [1995] 4 CMLR 718 at. [50]

[24] Ibid. at. [54]

[25] See Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112 Opinion of A.G. Jacobs, May 28, 1998, at. [58]

[26] See Case 27/76, United Brands Co and United Brands Continental BV v. Commission, [1978] E.C.R. 297.

[27] Ibid. at. [194]

[28] BBI/Boosey & Hawkes : Interim Measures [1987] OJ L286/36 [1988] 4 CMLR 67

[29] Whish (2003) p.668

[30] Sufrin (2008) p.542

[31] Sealink/ B&I Holyhead: Interim Measures [1992] 5 CMLR 255

[32] Sealink/ B&I Holyhead: Interim Measures [1992] 5 CMLR 255 [41]

[33] Sufrin (2008) p.540, Sealink/ B&I Holyhead: Interim Measures [1992] 5 CMLR 255 [41]

 

[34] Sufrin (2008) p.537 “It is sometimes called a bottleneck monopoly”

[35] Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112 Opinion of A.G. Jacobs, May 28, 1998, at. [58]

[36] Work of  P. Areeda, ‘Essential facilities: An Epithet inNeed of Limiting Principles’ cited from Sufrin (2008) pp.544-545

[37] Whish (2003) p.668

[38] Ibid. p.668

[39] See Joined Cases 6/73 and 7/73, Istituto Chemioterapico Italiano Spa and Commercial Solvents Corp. v. Commission, [1974] E.C.R. 223

[40] Ibid. at.[47]

[41] Case 311/84, Centre Belge d’Etudes du Marche-Telemarketing (CBEM) v CLT SA [1985] E.C.R. 3261.

[42] Ibid.

[43] Ibid. at. [25]-[26]

[44] Whish (2003) p.668

[45] Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112

[46] Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112 Opinion of A.G. Jacobs, May 28, 1998 at. [58]

[47] Ibid. at. [57]

[48] Ibid. at. [57]

[49]Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112 at. [41]

[50] See also Whish (2003) p.668

[51] Ibid. at. [41]

[52] See also Sufrin (2008) p.537

[53] Sufrin (2008), p.571

[54] Régibeau P. & R. Katharine, The Relationship Between Intellectual Property Law and Competition Law: An Economic Approach, University of Essex and CEPR Revised, June 2004 [online], available: http://www.essex.ac.uk/economics/discussion-papers/papers-text/dp581.pdf [accessed 10 May 2008]. P.3

[55]Ritter (2005) p. 291, See also Case 238/87, Volvo AB v. Erik Veng Ltd, [1988] E.C.R. 6211. [at] 8

[56] Case 238/87, Volvo AB v. Erik Veng Ltd, [1988] E.C.R. 6211. [at] 8

[57] Ibid. at.[8]

[58] Ibid. at.[8]

[59] Ibid. at. [9] (i) the arbitrary refusal to supply replacement parts to independent repairers; (ii) the fixing of prices for replacement parts at an unfair level, or (iii) a decision to cease production of replacement parts for a particular model when many cars of that model are still circulating

[60] Cases 241/242/91P, RTE and ITP, [1995] 4 CMLR 718

[61] Ibid. at. [53] [54]

[62] Ibid. at.[50]

[63] Ibid. at. [54]

[64] Ibid. At.[46] “It is to be remembered that at the outset that mere ownership of an intellectual property right cannot confer such a position.”

[65] Monti (2007) p.229

[66] Case T-504/93, Tiercé Ladbroke SA v. Commission, [1997] E.C.R., II-923

[67] Ibid. at. [131]

[68] Ibid. at. [131]

[69] Case C-7/97, Oscar Bronner GmbH & Co v. Mediaprint [1998] ECR I-7791; [1999] 4 CMLR 112 at. [40]

[70] Case C-418/01 IMS Health GmbH & Co OHG v. NDC Health GmbH& Co KG [2004] ECR I-5039 4 CMLR 1543

 

[71] IMS Brick structure system defined as a de facto industry standard which pharmaceutical companies depends this format as for receipt of regional sales data services. See NDC Health/IMS; Interim Measures [2002] OJ L59/18, [2002] 4 CMLR 111 at.[185]

[72] See NDC Health/IMS; Interim Measures [2002] OJ L59/18, [2002] 4 CMLR 111 at.[180]

[73] However in the para. 38 of IMS, Court held that “it is sufficient that three cumulative conditions be satisfied.” This raises the question about whether these conditions are exhaustive or new product criteria are one of the exceptional circumstance. See also Ritter (2005) p. 9

[74] Case C-418/01 IMS Health GmbH & Co OHG v. NDC Health GmbH& Co KG [2004] ECR I-5039 4 CMLR 1543 at.[38]

[75] Ibid. at.[43]-[44]

[76] See James Killick, IMS and Microsoft Judged in the Cold Light of IMS, December 2004 [online], available: http://www.whitecase.com/files/Publication/52195d09-658c-45e7-a0d9-6b9d480e2fbc/Presentation/PublicationAttachment/d49ad7c5-3a2a-4324-aa65-74df0ecc39fc/00688ny_killick_article_byline_02.pdf  [accessed 10 May 2008].

“If the Court accepts a hypothetical market for the intellectual property itself, then the criterion of a secondary market would become meaningless, as it would be met in all or almost all cases. The secondary market would simply be the hypothetical one for the licensing of the intellectual property right that is the subject of the compulsory licence.”

[77] Microsoft Corp v Commission of the European Communities (T-201/04) [2007] 5 C.M.L.R.

[78] D. Howarth, K. McMahon (2008) p.120

[79] Microsoft Corp v Commission of the European Communities (T-201/04) [2007] 5 C.M.L.R.at [422]

[80] James Killick (2004) pp.13-14

[81] Microsoft Corp v Commission of the European Communities (T-201/04) [2007] 5 C.M.L.R.at.[632]

[82] D. Howarth, K. McMahon (2008) p.123

[83]  See Dercayle Estelle, 2003. Abuses of dominant position and intellectual property rights: a suggestion to reconcile the community courts case law. World Competition, 26(4), p.21

[84]  See Ritter (2005) p.291

[85] Dercayle (2003) pp.17-19

[86] Monti (2007) 239

[87] Monti (2007) 229

[88] See Ritter (2005) p.291, Contrary Dercayle argues that exclusivity of the IP right extends to the derivative markets as well. See Dercayle (2003) p. 19

 

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