Volume 27 (2004)

Volume 27 (2004) / Issue 2

Maurits Dolmans, Thomas Graf, 'Analysis of Tying Under Article 82 EC: The European Commission's Microsoft Decision in Perspective' (2004) 27 World Competition, Issue 2, pp. 225–244

Abstract

The European Commission's investigation of Microsoft's tying of Windows Media Player has generated new interest in the application of EC law to tying abuses. In the context of this case, some commentators have suggested that EC competition law is too rigid when dealing with tying practices by dominant companies. This article discusses the conditions that the Commission and the Court of Justice have applied for findings of abuse under Article 82 EC in tying cases.

An analysis of the case law of the Commission and the Court of Justice shows that a five pronged test applies to the assessment of tying abuses under EC law. To establish an infringement of Article 82 EC to following elements need to be met:

(i) dominance of the seller in the market for the ``tying product'';

(ii) existence of a ``tied product'' that is separate from the ``tying product'';

(iii) coercion, i.e. conduct forcing customers to buy the tied product together with the tying product;

(iv) a restrictive effect on competition for the ``tied product''; and

(v) absence of an objective and proportionate justification for the coercion.

The five-pronged test represents a well-balanced approach to identify those tying practices that warrant intervention under Article 82 EC. The different elements necessary for a finding of abuse all serve to distinguish harmful from innocuous practices. Applied properly, the five-pronged-test will lead to much more refined and economically reasonable results than any per se rule – be it per se illegality or per se legality – could hope to achieve. This approach is also consistent with the assessment of tying abuses under US law. The Commission's Microsoft decision is a good example for a thorough and comprehensive investigation of an abusive tying practice that has far reaching implications for competition and innovation.

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ISSN: 1011-4548
ID: WOCO2004014