Case T‑167/08

Microsoft Corp.

v

European Commission

(Competition — Abuse of dominant position — Client PC operating systems — Work group server operating systems — Refusal of the dominant undertaking to supply and authorise the use of interoperability information — Fulfilment of obligations under a decision finding an infringement and imposing behavioural measures — Periodic penalty payment)

Summary of the Judgment

1.      European Union law — General principles of law — Legal certainty — Principle that penalties must have a proper legal basis — Scope

2.      Competition — Infringement of the rules of the Treaty — Fine — Periodic penalty payment — Deterrent effect of the fine and periodic penalty payment aimed at preventing repetition or continuation of the infringement — Shared characteristics and objectives — Need to state with different degrees of precision what an undertaking must do to comply with the competition rules — Absence

(Arts 101 TFEU and 102 TFEU; Council Regulation No 1/2003, Arts 23 and 24(2))

3.      Competition — Administrative procedure — Bringing infringements to an end — Commission's powers — Injunctions to undertakings — Limits

(Arts 101 TFEU and 102 TFEU; Council Regulation No 1/2003, Art. 7(1))

4.      Acts of the institutions — Statement of reasons — Obligation — Scope — Decision imposing a periodic penalty payment on an undertaking

(Art. 253 EC)

5.      Competition — Dominant position — Abuse — Refusal to grant a licence for the use of a product covered by an intellectual property right — Compliance with obligations flowing from a decision finding an infringement and imposing behavioural remedies — Obligation to authorise the use concerned on reasonable and non-discriminatory terms — Reasonableness of remuneration charged — Criteria for assessment

(Art. 102 TFEU)

6.      Competition — Administrative procedure — Statement of objections — Necessary content — Observance of the rights of the defence — Scope

7.      Competition — Administrative procedure — Statement of objections — Provisional nature — Abandonment of objections proving to be unfounded — Obligation of the Commission to inform persons concerned thereof  — Not included

8.      Competition — Periodic penalty payment — Amount — Judicial review — Factors which may be taken into account by the European Union judicature — Information not contained in the decision imposing the periodic penalty payment and not required for its statement of reasons — Included

(Arts 229 EC and 253 EC; Council Regulation No 1/2003, Art. 31)

9.      Competition — Periodic penalty payment — Amount — Judicial review — Factors which may be taken into account by the European Union judicature — Permission from the Commission to implement, for a period of time, a practice liable to have anti-competitive effects — Included

(Art. 229 EC; Council Regulation No 1/2003, Art. 31)

1.      The use of imprecise legal concepts in making rules, breach of which entails the civil, administrative or even criminal liability of the person who contravenes them, does not mean that it is impossible to impose the remedial measures provided for by law, provided that the individual concerned is in a position, on the basis of the wording of the relevant provision and, if need be, with the help of the interpretation of it given by the courts, to know which acts or omissions will make him liable.

(see para. 84)

2.      Both a fine imposed under Article 23 of Regulation No 1/2003 and a definitive periodic penalty payment imposed under Article 24(2) of that regulation are consequent upon an infringement of Article 101 TFEU or 102 TFEU, respectively, and a decision ordering that the infringement in question be brought to an end and, where appropriate, prescribing behavioural remedies. Moreover, a fine and a periodic penalty payment both relate to the conduct of an undertaking as revealed in the past and both of them require a deterrent effect in order to prevent repetition or continuation of the infringement. In view of those shared characteristics and objectives, there is no reason to state with different degrees of precision what an undertaking must do or not do to comply with the competition rules before either a decision imposing a fine or a decision imposing a definitive periodic penalty payment is adopted in its regard.

(see para. 94)

3.      Although the Commission undoubtedly has the power to find that an infringement of Article 101 TFEU or 102 TFEU exists and to order the parties concerned to bring it to an end, it is not for the Commission to impose upon the parties its own choice from among all the various potential courses of action which are in conformity with the Treaty or with a decision imposing behavioural remedies. It follows that if the undertaking has chosen one of those potential courses of action, the Commission will not be in a position to make a finding of infringement or impose a periodic penalty payment on the ground that it prefers another of them.

(see para. 95)

4.      See the text of the decision.

(see paras 99, 100)

5.      The distinction between the strategic value and the intrinsic value of the technologies covered by a decision finding an infringement of competition law and imposing behavioural remedies constitutes a basic premiss of the assessment of the reasonableness of any remuneration charged by an undertaking dominant in the sector for client PC and work group server operating systems for providing access to information on interoperability and authorising the use of that information. The intrinsic value of that information lies in its innovative character. By contrast, the fact that those technologies were trade secrets by virtue of the policy of the dominant undertaking is not an indicator of any value other than strategic value, in other words the value resulting from the mere ability to interoperate with the operating systems produced by that undertaking. In the absence of innovation, secrecy by itself represents only strategic value for a licensee.

Where there is an obligation to provide technologies on reasonable and non-discriminatory conditions excluding any remuneration reflecting strategic value, the Commission is entitled to assess the innovative character of those technologies by reference to their constituent elements, namely novelty and non-obviousness, the latter belonging to the notion of inventive step. The effect of assessing the innovative character of those technologies by reference to novelty and inventive step is not to extinguish generally the value of intellectual property rights, trade secrets or other confidential information or, a fortiori, to make innovative character a precondition for a product or information to be covered by such a right or to constitute a trade secret.

(see paras 138, 142-144, 149, 150)

6.      For the purposes of applying the competition rules, the statement of objections must be couched in terms that, albeit succinct, are sufficiently clear to enable the parties concerned properly to identify the conduct complained of by the Commission. Indeed, it is only on that condition that the statement of objections can fulfil its function under the Community regulations of giving undertakings all the information necessary to enable them to defend themselves properly, before the Commission adopts a final decision. That requirement is satisfied if the decision does not allege that the persons concerned have committed infringements other than those referred to in the statement of objections and takes into consideration only facts on which they have had the opportunity of making known their views. Furthermore, the statement of objections is a procedural measure adopted preparatory to the decision which represents the culmination of the administrative procedure. Consequently, until a final decision has been adopted, the Commission may, in view, in particular, of the written or oral observations of the parties, abandon some or even all of the objections initially made against them and thus alter its position in their favour or, conversely, decide to add new complaints, provided that it affords the undertakings concerned the opportunity of making known their views in that respect.

With regard to exercise of the rights of the defence in respect of the imposition of fines, provided the Commission indicates expressly in the statement of objections that it will consider whether it is appropriate to impose fines on the undertakings concerned and sets out the principal elements of fact and of law that may give rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that it has been committed ‘intentionally or negligently’, it fulfils its obligation to respect the undertakings’ right to be heard. In doing so, it provides them with the necessary elements to defend themselves not only against a finding of infringement but also against the fact of being fined.

Finally, where the Commission indicates in the statement of objections, or in any subsequent document whose purpose is to enable the undertakings in question properly to identify the conduct complained of, that the infringement has not yet ended, it is able to take into account, for the purposes of calculating the fine, the time that has elapsed between the statement of objections and adoption of the decision bringing the administrative proceedings to an end, provided that it takes into consideration only facts on which the persons concerned have had the opportunity of making known their views.

It follows that, taking account of the shared characteristics and objectives of fines and periodic penalty payments, the foregoing considerations are fully applicable in the context of periodic penalty payments imposed under Article 24 of Regulation No 1/2003.

(see paras 182-187)

7.      See the text of the decision.

(see paras 184, 191)

8.      As regards the method for calculating a periodic penalty payment, the exercise of the unlimited jurisdiction conferred on the European Union judicature by Article 229 EC and Article 31 of Regulation No 1/2003 may justify the production and taking into account of additional information which is not as such required, by virtue of the duty to state reasons under Article 253 EC, to be set out in the decision.

(see paras 217, 222)

9.      If, in the light of a pending case, the Commission, taking into account (i) the nature of the obligations imposed by a decision finding an infringement of competition law and prescribing behavioural measures and (ii) the consequences which might flow from a possible annulment, permitted the undertaking concerned to implement, for a period of time, a practice liable to have anti-competitive effects which that decision was intended to put a stop to, that fact may be taken into account by the European Union judicature when it determines the amount of the periodic penalty payment in the exercise of the unlimited jurisdiction conferred on it by Article 31 of Regulation No 1/2003.

(see para. 226)