Chillin'Competition

I was about to fall asleep reading the Microsoft judgment of last week (T-167/08), when I stumbled into paragraph 139.

This paragraph implicitly reverses the CFI’s Microsoft I ruling on the legal standard of abusive refusal to supply (CFI, Case T-201/04, Microsoft Corp. v Commission, ECR [2007] II-3601).

Remember, in this judgment the CFI had departed from the IMS Health and Magill “new product” condition.

It had held that:

“§647. the circumstance relating to the appearance of a new product, as envisaged in Magill and IMS Health . . . cannot be the only parameter which determines whether a refusal to license an intellectual property right is capable of causing prejudice to consumers within the meaning of [Article 102(b) TFEU]”.

The CFI further added that it was sufficient for the Commission to prove that the refusal to supply interoperability information gave rise to a “limitation […] of technical development”.

This new concept was (and still is) rightly criticized by scholars and practitioners as a loose, elusive and murky legal standard. Many expressed regrets over the disappearance of the simple three-pronged  Magill-IMS Health test. Others argued that the CFI’s “technical development” standard was wholly inapplicable, and advised to rely on the Magill and IMS Health judgments of the upper ECJ. Finally, some practitioners (amongst others, D. Waelbroeck) talked of a lex specialis Microsoft.

Interestingly, the latest Microsoft judgment no longer talks of the “limitation of technical development“.

Rather, in what reads like an obiter dictum, the GC explicitly refers to the “new product” condition, and quotes IMS Health as the sole source of precedent on refusals to supply involving IPRs.

“§139. In that regard, it should be recalled that, in order for the refusal by an undertaking which owns a copyright to give access to a product or service indispensable for carrying on a particular business to be regarded as abuse, it is sufficient that three cumulative conditions be satisfied, namely that that refusal is preventing the emergence of a new product for which there is a potential consumer demand, that it is unjustified and that it is such as to exclude any competition on a secondary market“

Of course, the Court would not acknowledge that it applied a wrong legal standard in 2007.

It thus goes on to state at §140 that those three conditions were met in the Microsoft I case (they were not).

That said, paragraph 139 marks a welcome evolution of the case-law on abuse.