U.S. v. Microsoft, and European Commission v. Microsoft.

Read this second: The Globalization of Antitrust Law

Then U.S. v. Microsoft



Microsoft v. Commission of the European Community

 (competition law=Wettbewerbsrecht and Kartellrecht).

Unfair competition=Unlautere Wettbewerb
Antitrust (U.S.) = Competition law (U.K.) = Kartellrecht

We will see that the U.S. antitrust law preceded EU Competition law, that EU competition law and U.S. antitrust have tended to converge toward similar rules and outcomes even though the legislation is different. This is because of the power of U.S. judges to shape law.

Reading for the next session: focus on the cases we will do those during the lecture.

Then:antitrust reading 1

Then:
Antitrust Reading 2

Then
Antitrust reading 3: Read this last.
Vocabulary:
rule of reason
per se rule

1) Is it a vertical market?

2) Is it a horizontal market?
Then the restraint is likelier to be found per se illegal.

[I don’t think this distinction is so tenable: e.g., Ford Motor offers to loan you money to buy a car, and includes a (mandatory) after sales repair contract, (which must be fulfilled only at a Ford authorized repair shop) – Is this a horizontal or vertical case?]

a) Is it a per se violation?
[what is a per se violation..?]
{*per se violations are an abusive practice which takes advantage of monopoly power or is used to obtain monopoly power.
*abusive of consumers – per se
*abusive of other businesses – rule of reason}

Types of Restrictions: From the most per se to the least

production quota (quantitative restriction)
boycotts
price fixing

market division
-by market share
-by territory
-via exclusive dealers?
tying arrangements

US v MS occurs just prior to the tech crash and 9/11.
Antitrust as a corporate tactic
Unfair competition
-false advertising
-bait and switch
-trademark infringement
-copyright infringement
-crime
-adhesion contracts
*when is it unfair competition
*when is it consumer rights
*when is it antitrust
*what about labor unions?
*economic planning?
*industrial policy?

Three type of abuses:
Abuses which require monopoly power

Abuses to obtain monopoly power

Abuses which occur independent of monopoly power

tying?
exclusive dealership?

What were the practical consequences of MS Antitrust?
-Linux
-Firefox
-MacOSX
-Microsoft goes into charity
-Open office

What abusive acts had ms engaged in to attain monopoly power?
-Acquisition of public domain information and linking it to proprietary data
-Retaliatory pricing

ms lied during the trial.
the judge acted improperly during the trial.

The integrated browser allowed MS to automatically read clients data. Obviously national security wanted that.
Now you know why your laptop comes with a nice free camera and microphone.

Was antitrust here used as a pretext for trade conflict?
MS is U.S. based.
Should MS have had e.g. a nice large EU office as well? Just prior to EU 1992 a number of US companies established offices in Ireland to avoid the risk of being shut out of the common market.

Essential facilities doctrine
Interoperability
effective competition
browser
media player
“the cloud”