Orders nº T-167/08 of Court of First Instance of the European Communities, November 20, 2008

• Resolution Date: November 20, 2008
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-167/08

(Intervention)

In Case T-167/08,

Microsoft Corporation, represented by J.‑F. Bellis, lawyer, and I. Forrester QC,

applicant,

v

Commission of the European Communities, represented by T. Christoforou, V. Di Bucci and F. Castillo de la Torre, acting as Agents,

defendant,

APPLICATION for annulment of the decision of the Commission of 27 February 2008, fixing the definitive amount of the periodic penalty payment imposed on Microsoft Corporation by Decision C(2005) 4420 final of 10 November (Case COMP/C-3/37.792 – Microsoft),

THE PRESIDENT OF THE SEVENTH CHAMBER OF THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES,

makes the following

Order

Background

1 Microsoft Corp. (‘Microsoft’), established in Redmond, Washington (United States), develops and markets software products.

2 Microsoft’s products include client personal computer (‘PC’) operating systems, named Windows, and work group server operating systems, named Windows Server.

3 On 10 December 1998, Sun Microsystems, Inc., established in Palo Alto, California (United States), lodged a complaint with the Commission. This complaint was directed against Microsoft’s refusal to disclose information which Sun Microsystems deemed necessary to allow interoperability of its work group server operating systems with Windows.

4 In February 2000, the Commission launched a separate investigation against Microsoft. This investigation concerned the incorporation of Windows Media Player in Windows.

5 The proceedings initiated pursuant to Sun Microsystems’ complaint and to the Commission’s separate investigation were subsequently joined under Case COMP/C-3/37.792.

6 On 24 March 2004, the Commission adopted a decision C(2004) 900 final relating to a proceeding under Article 82 EC in Case COMP/C‑3/37.792 – Microsoft (the ‘2004 Decision’).

7 In assessing Microsoft’s behaviour in the 2004 Decision, the Commission first defined the relevant product markets including the market for client PC operating systems (recitals 324 to 342 of the 2004 Decision) and the market for work group server operating systems (recitals 343 to 401 of the 2004 Decision).

8 The Commission found that both of these relevant product markets were of worldwide dimension (recital 427 of the 2004 Decision). It further considered that Microsoft held a dominant position on both of these markets, namely that for client PC operating systems (recitals 429 to 472 of the 2004 Decision) and that for work group server operating systems (recitals 473 to 541 of the 2004 Decision).

9 The Commission took the view that Microsoft had violated Article 82 EC by committing two abuses of its dominant position on the market for PC operating systems, one of which is relevant to the present case. Microsoft was held to have abused its dominant position by refusing to supply competitors with certain interoperability information (‘Interoperability Information’) and to allow them to use it for the purpose of developing and distributing competing products on the market for work group server operating systems, from October 1998 onwards (recitals 546 to 791 and Article 2(a) of the 2004 Decision).

10 The Commission decided to require Microsoft to put an end to that abusive behaviour, to refrain from repeating it or from engaging in equivalent behaviour, and to comply with a set of remedies (recitals 994 to 1053 and Articles 4 to 8 of the 2004 Decision). In particular, Article 5 of the 2004 Decision orders Microsoft to supply that which it wrongfully refused to supply to, among others, Sun Microsystems.

11 Article 7 of the 2004 Decision provides that Microsoft should submit a proposal to the Commission for the establishment of a suitable mechanism assisting the Commission in monitoring Microsoft’s compliance with the 2004 Decision. It further stipulates that the said mechanism should include an independent monitoring trustee.

12 The Commission also imposed a fine of EUR 497 196 304 on Microsoft in respect of the two abuses it had found (recitals 1054 to 1080 and Article 3 of the 2004 Decision).

13 By application lodged at the Registry of the Court of First Instance on 7 June 2004, Microsoft brought an action for annulment of the 2004 Decision or, in the alternative, annulment or reduction of the fine (Case T‑201/04). By an order of the president of the fourth chamber of 9 March 2005, the Free Software Foundation Europe (‘FSFE’) and the Software & Information Industry Association (‘SIIA’) were admitted to intervene in that case in support of the Commission, while the Computing Technology Industry Association Inc. (‘CompTIA’) and the Association for Competitive Technology, Inc. (‘ACT’) were granted leave to intervene in support of the form of order sought by Microsoft. By a further order of the president of the fourth chamber of 28 April 2005, the European Committee for Interoperable Systems (‘ECIS’) was granted leave to intervene in the case in support of the form of order sought by the Commission.

14 On 28 July 2005, the Commission adopted a decision pursuant to Article 7(1) of Regulation (EC) No 1/2003 establishing the monitoring mechanism provided for in Article 7 of the 2004 Decision, in accordance with the substantive terms envisaged in previous correspondence between it and Microsoft. That decision provides, inter alia, for the appointment of a monitoring trustee. One of four suitable candidates proposed by Microsoft was later appointed to that post.

15 On 10 November 2005, the Commission adopted a decision C(2005) 4420 final imposing a periodic penalty payment pursuant to Article 24(1) of Regulation (EC) No 1/2003 on Microsoft (the ‘Article 24(1) Decision’). Article 1 of that Decision reads as follows:

‘Microsoft Corporation shall ensure that, by 15 December 2005, it fully complies with the obligations set out in Article 5(a) and (c) of Commission Decision (C(2004) 900) of 24 March 2004.

In the absence of such compliance, a periodic penalty payment of 2 million euro per day, calculated from that date, shall be imposed on Microsoft Corporation.’

16 On 12 July 2006, the Commission adopted a decision (the ‘2006 Decision’) fixing the definitive amount of the periodic penalty payment imposed on Microsoft Corporation by the Article 24(1) Decision, in respect of the period between 16 December 2005 and 20 June 2006 and amending that Decision as regards the amount of the periodic penalty payment applicable in respect of any future failure to comply with its obligations under the 2004 Decision.

17 By application lodged at the Registry of the Court of First Instance on 2 October 2006, Microsoft brought an action for annulment of the 2006 Decision or, in the alternative, annulment or reduction of the fine (Case T‑271/06). By an order of the President of the Second Chamber of 14 May 2007 (the ‘order of 14 May 2007’), International Business Machines Corporation (‘IBM’), SIIA, ECIS, Oracle Corporation and Red Hat Inc. were granted leave to intervene in Case T‑271/06 in support of the form of order sought by the Commission, while CompTIA and ACT were granted leave to intervene in support of the form of order sought by Microsoft.

18 On 1 March 2007, the Commission issued a Statement of Objections stating that it intended to adopt a decision pursuant to Article 24(2) of Regulation No 1/2003 fixing the definitive amount of the periodic penalty payment which was imposed on Microsoft by the Article 24(1) Decision, as amended by the 2006 Decision, for non-compliance with its obligation to charge a reasonable remuneration for access to or use of Interoperability Information pursuant to Article 5(a) of the 2007 Decision for the period between 16 December 2005 and the date to be specified in the decision pursuant to Article 24(2) of Regulation (EC) No 1/2003.

19 By judgment of 17 September 2007 in Case T‑201/04, the Court of First Instance (Grand Chamber) annulled Article 7 of the 2004 Decision in so far as it, firstly, ordered Microsoft to submit a proposal for the establishment of a mechanism which is to include a monitoring trustee with the power to have access, independently of the Commission, to Microsoft’s assistance, information, documents, premises and employees and to the source code of the relevant Microsoft products, secondly, required that the proposal for the establishment of that mechanism provide that all the costs associated with the appointment of the monitoring trustee, including his remuneration, be borne by Microsoft and, thirdly, reserved to the Commission the right to impose such a mechanism by way of decision. For the remainder, the Court dismissed Microsoft’s action.

20 By a letter lodged at the Registry of the Court of First Instance on 24 October 2007, Microsoft informed the Court, in accordance with Article 99 of the Rules of Procedure of the Court of First Instance, that it wished to discontinue proceedings in Case T‑271/06. Accordingly, by an order of 6 December 2007, Case T‑271/06 was removed from the register of the Court of First Instance.

21 On 27 February 2008 the Commission adopted a decision (the ‘Contested Decision’) fixing the definitive amount of the periodic penalty payment, imposed on Microsoft Corporation by the Article 24(1) Decision, as amended by Article 3 of the 2006 Decision, for failure to comply with its obligation to make Interoperability Information available to interested undertakings on reasonable and non-discriminatory terms, in respect of the period between 21 June 2006 and 21 October 2007.

Procedure

22 By application lodged at the Registry of the Court of First Instance on 9 May 2008, Microsoft brought the present action for annulment of the Contested Decision or, in the alternative, annulment or reduction of the periodic penalty payment.

23 By application lodged at the Registry of the Court of First Instance on 16 August 2008, FSFE, established in Düsseldorf (Germany), and Samba Team, based in New York (United States), represented by C. Piana and T. Ballarino, lawyers, requested...