The big fight continues…

By : |April 30, 2004 0

Peter Nielsen

BRUSSELS: Microsoft and the European Commission continued their long-running battle clashing over whether a ruling by the EU’s highest court backed the bloc’s decision against the software giant.

The EU executive, which has fined Microsoft almost 500 million euros ($591.2 million), said the ruling, involving a dispute between two U.S. drug research companies in Germany, strengthened its case against Microsoft.

But Microsoft immediately rebuked this view, saying the ruling dealt a “fatal blow” to the Commission’s case against it and would help in its appeal.

Microsoft has said it will appeal the Commission’s ruling from March 24, which included an order to strip media software from its Windows system and to reveal some of its software code for running business computer networks.

Following a review of the German case, the European Court of Justice set out guidelines under which a company could be said to be abusing a dominant position — the charge levied by the European Union executive against Microsoft.

The German case, involving the units of NDCHealth Corp and IMS Health Inc concerned the rights to a system of collecting drug sales data owned by IMS. The court ruled that an abuse of a dominant position could come when a refusal to share data with a rival reserved the market in question to the bigger firm and eliminated competition.

Such abuse could also happen when a company, in this case IMS, refused to share data with a company that was going to offer a new product or service to the market.

“What the court has done is to set out the exceptional circumstances where refusal to grant a licence by a company which has a dominant position might be construed as an abuse,” Commission spokeswoman Amelia Torres told a news conference.

“We believe that these exceptional circumstances, as set out by the court in the IMS case, have been met too in the Microsoft case,” she said.

A Microsoft spokesman denied this interpretation, saying the ruling does not apply to its case because the court ruled that a firm asking for a licence should offer new products or services not offered by the owner of the copyright.

“This test is not met in the Commission’s case as all the technologies that the Commission has ordered to be licensed to competitors are already integrated into Windows and therefore available to consumers,” the spokesman said.

“All of the competitors concerned have successful products on the market, so it is clear that Microsoft’s action has not prevented the launch of these products,” he said, adding:

“This decision is a fatal blow to the Commission’s compulsory licensing case against Microsoft and forms a very solid basis for part of our appeal.”


While setting out the guidelines for abuse, which the Commission is likely to draw upon in its battle with Microsoft, the court also left it up to German courts to rule on the particular fight between IMS and NDC.

“The Court stresses that it is for the national court to determine whether those conditions are fulfilled in the case before it,” it said.

The case between IMS and NDC came after IMS started doing business in Germany and sliced the country into 1,860 districts, each composed of several postal codes.

A group of pharmaceutical companies assisted in the effort, helping fine-tune the mapped districts to their needs.

IMS gathers information from pharmacies about the sales of drugs, blending the results to provide anonymity. Pharmaceutical companies purchase the data to find out which drugs sell best in which regions — crucial information for their marketing strategies.

NDC wanted to get in on the action, but IMS has refused to license the plan, arguing it held the copyright. IMS sued NDC, but the Frankfurt regional court asked the Luxembourg court to resolve some of the thorny EU legal issues.

Earlier, the Commission had ordered IMS Health to license its map structure to NDCHealth. But the Court of First Instance, a lower court, overturned that order.

The Commission eventually quietly dropped its case, but Competition Commissioner Mario Monti welcomed the ruling.

“We are satisfied that it confirms our decision on IMS,” Monti told reporters in Dublin.


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