Microsoft's Difficulties Provide Timely Lesson To Others

The US Justice Department has taken action to impose a fine of $1 million (£650,000) a day on Microsoft for the alleged violation of a 1995 court order barring Microsoft from anti-competitive licensing practices. The US Justice Department has objected to Microsoft 'tying' the licensing of its Windows 95 operating system to the licensing of its Internet Explorer browser program. Condemning such a practice as anti-competitive and an abuse of its dominant position as market leaders of operating systems, the US Justice Department is seeking an injunction to force Microsoft to stop the alleged violation and to inform Windows 95 consumers that they can use any compatible browser. Such direct action provides a salutary lesson to both suppliers and purchasers of software in the USA, and also Europe where 'tying' of software licences may fall foul of Article 86 of the Treaty of Rome which prohibits the abuse of a dominant market position. Software suppliers should therefore give very careful consideration to the bundling of software where there is no clear technical reason to do so. Consumers should take note, and where a supplier is refusing to license a product unless 'tied' with another product, they may wish to consider whether such action is in breach of any national and European anti-competitive laws. These laws are for the consumer's benefit to ensure choice in the market place. For further information on any of the above topics please contact Samantha Smith in the first instance on 44 171 415 6000 or by e-mail to samantha.smith@twobirds.com
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