Refusal to supply IP in the EU after Microsoft

1
Refusal to supply (IP) in the EU after Microsoft
ABA Fall Meeting Brussels, September 26th 2008

• Nicholas Banasevic
• DG Competition, European Commission
• (speaking in a personal capacity - the views
  expressed are not necessarily those of the
  European Commission)

2
The aims of antitrust and IP law

• There is no intrinsic conflict
• Both antitrust and IP law have the same general
  aims
• Promoting innovation
• Driving economic growth
• For the benefit of consumers
• Refusal by a dominant firm to license IP is not
  in itself an abuse
• (IP does not in itself mean market power)

3
Exceptional circumstances

• Refusal can be an abuse only in exceptional
  circumstances
• Magill, IMS, Microsoft
• Cases are very rare
• Microsoft was very fact-intensive
• Contained a great deal of analysis of market
  conditions, effects on consumers, incentives to
  innovate etc.

4
Indispensability

• No viable alternatives to the information/input
• To compete in a neighbouring market
• Extent of dominance important
• E.g. if your product needs to connect to a
  monopoly product, information about that
  connection more likely to be indispensable

5
Elimination of competition

• In a neighbouring product market
• Elimination of effective competition
• Elimination does not have to be immediate
• Close link with indispensability
• i.e. if information is indispensable, without it,
  elimination of competition in the neighbouring
  market is likely

6
New product

• Refusal prevents emergence of a new product
• New means not a copy of the dominant firms
  product
• Microsoft had a detailed analysis of impact on
  consumer
• Lock-in, elimination of competition, denial of
  choice
• New, innovative products in the neighbouring
  market were prevented from emerging
• Competition occurs on the basis of parameters
  other than interoperability
• Innovative features of other products

7
Objective justification

• Intellectual property in itself cannot be a
  justification
• This would be a contradiction
• Analysis will be fact-specific
• In Microsoft
• Rivals couldnt copy/clone Microsofts products
• Aim of Decision is interoperability
• Analysis would be different if the information
  allowed a product to be copied

8
Could other exceptional circumstances be relevant?

• Cutting of previous supply?
• Importance of interoperability?
• In Microsoft, CFI did not go into these questions
• To a degree, the relevant issues might fit in the
  traditional criteria

9
Conclusion

• Microsoft confirms previous principles
• But cases will be decided on the basis of
  rigorous assessment of specific facts
• Misleading to claim that the floodgates will
  open after Microsoft
• Competition will always be assessed on the merits
  of the products
• Consumer choice and innovation are key

10
Refusal to supply in the EU after Microsoft
ABA Fall Meeting Brussels, September 26th 2008

• Nicholas Banasevic
• DG Competition, European Commission
• (speaking in a personal capacity - the views
  expressed are not necessarily those of the
  European Commission)