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Renata Hesse, Oct 03, 2007
As someone who has spent a considerable portion of the last five years working on issues involving Microsoft’s conduct and the competition laws, I read with interest the commentary that followed the issuance of the Court of First Instance’s decision on September 17. Much of the focus of the commentary was on the significance of the decision with respect to the state of “convergence” of U.S. and European Community (“Community”) competition law relating to unilateral conduct of “dominant” firms. While convergence, or the lack thereof, is obviously a major issue, the decision is also important because of what it reflects about regulatory and judicial views in Europe and the United States on issues at the intersection of intellectual property and competition law. These issues have broader implications than just the Microsoft case.
But first a small point; the standard of review applied by the CFI may have been a significant driver of the outcome. In paragraph 87 of the decision, the CFI states that its review of the “complex economic appraisals” is “necessarily limited to checking whether the relevant rules on procedure and on stating reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or a misuse of powers.” Similarly, in paragraph 88 of the decision, the CFI notes that “complex technical appraisals – are in principle subject to only limited review by the Court, which means that the Community Courts cannot substitute their own assessment of matters of fact for the Commission’s.” The CFI thus rejected Microsoft’s invitation to perform a “searching inquiry into the soundness of the Commission’s decision” (paragraph 86), opting instead to apply a standard of review akin to an “abuse of discretion” standard in the United States. Regardless of what one thinks of the merits of Microsoft’s appeal to the CFI, application of this standard perhaps doomed it from the start.