62008TJ0167_EN
Parties
Grounds
Operative part
Parties
In Case T-167/08,
Microsoft Corp., established in Redmond, Washington (United States), represented by J.-F. Bellis, lawyer, and I. Forrester QC,
applicant,
supported by
The Computing Technology Industry Association, Inc.,
established in Oakbrook Terrace, Illinois (United States), represented by G. van Gerven and T. Franchoo, lawyers,
and by
Association for Competitive Technology, Inc.,
established in Washington DC (United States), represented initially by D. Went and H. Pearson, Solicitors, and subsequently by H. Mercer QC,
v
European Commission,
represented by T. Christoforou, V. Di Bucci, F. Castillo de la Torre and N. Khan, acting as Agents,
defendant,
supported by
Free Software Foundation Europe eV,
established in Hamburg (Germany), and
Samba Team,
established in New York, New York (United States),
represented by C. Piana and T. Ballarino, lawyers,
by
Software & Information Industry Association,
established in Washington DC, represented by T. Vinje and D. Dakanalis, Solicitors, and A. Tomtsis, lawyer,
by
European Committee for Interoperable Systems (ECIS),
established in Brussels (Belgium), represented by T. Vinje, Solicitor, and M. Dolmans, N. Dodoo and A. Ferti, lawyers,
by
International Business Machines Corp.,
established in Armonk, New York (United States), represented by M. Dolmans and T. Graf, lawyers,
by
Red Hat Inc.,
established in Wilmington, Delaware (United States), represented by C.-D. Ehlermann and S. Völcker, lawyers, and C. O’Daly, Solicitor,
and by
Oracle Corp.,
established in Redwood Shores, California (United States), represented by T. Vinje, Solicitor, and D. Paemen, lawyer,
interveners,
APPLICATION for the annulment of Commission Decision C(2008) 764 final of 27 February 2008 fixing the definitive amount of the periodic penalty payment imposed on Microsoft Corp. by Decision C(2005) 4420 final (Case COMP/C-3/37.792 — Microsoft) and, in the alternative, the cancellation or reduction of the periodic penalty payment imposed on the applicant in that decision,
THE GENERAL COURT (Second Chamber),
composed of N.J. Forwood (Rapporteur), President, F. Dehousse and J. Schwarcz, Judges,
Registrar: N. Rosner, Administrator,
having regard to the written procedure and further to the hearing on 24 May 2011,
gives the following
Judgment
Grounds
Background to the dispute
1. Microsoft Corp., a company established in Redmond, Washington (United States), designs, develops and markets a wide variety of software products for different kinds of computing devices. Those software products include, in particular, operating systems for client personal computers (‘client PCs’) and operating systems for work group servers.
2. On 24 March 2004, the Commission adopted Decision 2007/53/EC relating to a proceeding pursuant to Article 82 [EC] and Article 54 of the EEA Agreement against Microsoft Corp. (Case COMP/C-3/37.792 — Microsoft) (OJ 2007 L 32, p. 23; ‘the 2004 decision’).
3. According to the 2004 decision, Microsoft infringed Article 82 EC and Article 54 of the EEA Agreement because of two abuses of a dominant position, the first of which — the only one relevant in the context of this case — consisted in Microsoft’s refusal to supply its competitors with ‘interoperability information’ and to authorise the use of that information for the purpose of developing and distributing products competing with Microsoft’s own products on the work group server operating systems market, between October 1998 and the date of notification of the 2004 decision (Article 2(a) of the 2004 decision).
4. For the purposes of the 2004 decision, ‘interoperability information’ is the ‘complete and accurate specifications for all the protocols implemented in Windows work group server operating systems and … used by Windows work group servers to deliver file and print services and group and user administration services, including the Windows domain controller services, Active Directory services and “Group Policy” services to Windows work group networks’ (Article 1(1) of the 2004 decision).
5. ‘Windows work group network’ is defined as ‘any group of Windows client PCs and Windows work group servers linked together via a computer network’ (Article 1(7) of the 2004 decision).
6. A ‘protocol’ is defined as ‘a set of rules of interconnection and interaction between various instances of Windows work group server operating systems and Windows client PC operating systems running on different computers in a Windows work group network’ (Article 1(2) of the 2004 decision).
7. In the 2004 decision, the Commission emphasised that the refusal in question does not relate to Microsoft’s ‘source code’, but only to specifications of the protocols concerned, that is to say, to a detailed description of what the software in question must achieve, in contrast to the implementations, consisting in the implementation of the code on the computer (recitals 24 and 569 to the 2004 decision). It states, in particular, that it ‘does not contemplate ordering Microsoft to allow copying of Windows by third parties’ (recital 572 to the 2004 decision).
8. In respect of the two abuses identified in the 2004 decision, a fine of EUR 497 196 304 was imposed (Article 3 of the 2004 decision).
9. By way of remedy for the abuse referred to in Article 2(a) of the 2004 decision, Article 5 of that decision provides as follows:
‘(a) Microsoft … shall, within 120 days of the date of notification of this decision, make the interoperability information available to any undertaking having an interest in developing and distributing work group server operating system products and shall, on reasonable and non-discriminatory terms, allow the use of the interoperability information by such undertakings for the purpose of developing and distributing work group server operating system products;
(b) Microsoft … shall ensure that the interoperability information made available is kept updated on an ongoing basis and in a timely manner;
(c) Microsoft … shall, within 120 days of the date of notification of this decision, set up an evaluation mechanism that will give interested undertakings a workable possibility of informing themselves about the scope and terms of use of the interoperability information; as regards this evaluation mechanism, Microsoft … may impose reasonable and non-discriminatory conditions to ensure that access to the interoperability information is granted for evaluation purposes only;
(d) Microsoft … shall, within 60 days of the date of notification of this decision, communicate to the Commission all the measures that it intends to take under points (a), (b) and (c); that communication shall be sufficiently detailed to enable the Commission to make a prelimina[ry] assessment as to whether the said measures will ensure effective compliance with the decision; in particular, Microsoft … shall outline in detail the terms under which it will allow the use of the interoperability information;
…’
10. Article 7 of the 2004 decision provides:
‘Within 30 days of the date of notification of this decision, Microsoft … shall submit a proposal to the Commission for the establishment of a suitable mechanism assisting the Commission in monitoring [Microsoft’s] compliance with this decision. That mechanism shall include a monitoring trustee who shall be independent from Microsoft …
In case the Commission considers [Microsoft’s] proposed monitoring mechanism not suitable it retains the right to impose such a mechanism by way of a decision.’
11. By application lodged at the Court Registry on 7 June 2004, Microsoft brought an action against the 2004 decision.
12. By separate document lodged at the Court Registry on 25 June 2004, Microsoft lodged an application under Article 242 EC for suspension of operation of Article 4, Article 5(a) to (c) and Article 6(a) of the 2004 decision.
13. By order of 22 December 2004 in Case T-201/04 R Microsoft
v Commission
[2004] ECR II-4463, the President of the Court dismissed that application.
14. By Decision C(2005) 2988 final, of 28 July 2005, relating to a proceeding under Article 82 [EC] (Case COMP/C-3/37.792 — Microsoft), the Commission imposed the mechanism provided for in Article 7 of the 2004 decision. On 4 October 2005 the Commission appointed an independent monitoring trustee (‘the monitoring trustee’).
15. By decision of 10 November 2005 (‘the 2005 decision’), which imposed a periodic penalty payment pursuant to Article 24(1) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1), the Commission held that the technical documentation prepared by Microsoft up to 20 October 2005 containing the interoperability information was neither accurate nor complete (recital 101 to the 2005 decision). The Commission also considered that the remuneration rates charged by Microsoft for granting access to, and authorising the use of, the interoperability information were unreasonable (recitals 161 and 193 to the 2005 decision). On those grounds, the Commission ordered Microsoft to comply with the obligations imposed by Article 5(a) and (c) of the 2004 decision within a period ending on 15 December 2005, failing which a periodic penalty payment of EUR 2 million per day would be imposed on it.
16. By decision of 12 July 2006 (‘the 2006 decision’) fixing the definitive amount of the periodic penalty payment imposed on Microsoft by Decision C(2005) 4420 final (Case COMP/C-3/37.792 — Microsoft) (OJ 2008 C 138, p. 10), the Commission held that the technical documentation prepared by Microsoft up to 20 June 2006 containing the interoperability information was neither accurate nor complete (recital 232 to the 2006 decision). The Commission therefore imposed a periodic penalty payment of EUR 280.5 million on Microsoft on the ground that it had not complied with Article 5(a) and (c) of the 2004 decision during the period from 16 December 2005 to 20 June 2006. Furthermore, it increased the periodic penalty payment which could be imposed pursuant to the 2005 decision to EUR 3 million per day from 31 July 2006.
17. By application lodged at the Court Registry on 2 October 2006, Microsoft challenged the 2006 decision.
18. By judgment of 17 September 2007 (Case T-201/04 Microsoft v Commission
[2007] ECR II-3601), the Court annulled Article 7 of the 2004 decision and dismissed the remainder of the application. Point 1 of the operative part of the judgment in Microsoft
v Commission
reads as follows:
‘[The Court:]
1. Annuls Article 7 of Commission Decision 2007/53/EC of 24 March 2004 relating to a proceeding pursuant to Article 82 [EC] and Article 54 of the EEA Agreement against Microsoft … (Case COMP/C-3/37.792 — Microsoft), in so far as:
– it orders Microsoft to submit a proposal for the establishment of a mechanism which is to include a monitoring trustee with the power to have access, independently of the Commission, to Microsoft’s assistance, information, documents, premises and employees and to the source code of the relevant Microsoft products;
– it requires that the proposal for the establishment of that mechanism provide that all the costs associated with the appointment of the monitoring trustee, including his remuneration, be borne by Microsoft; and
– it reserves to the Commission the right to impose by way of decision a mechanism such as that referred to in the first and second indents above’.
19. By letter lodged at the Court Registry on 24 October 2007, Microsoft discontinued the action it had brought against the 2006 decision (see paragraph 17 above).
Contested decision
20. By Decision C(2008) 764 final of 27 February 2008 fixing the definitive amount of the periodic penalty payment imposed on Microsoft … by Decision C(2005) 4420 final (Case COMP/C-3/37.792 — Microsoft) (OJ 2009 C 166, p. 20; ‘the contested decision’), the Commission imposed on Microsoft a periodic penalty payment of EUR 899 million on the ground that it had not complied with the obligations imposed by Article 5(a) of the 2004 decision during the period from 21 June 2006 to 21 October 2007.
21. It is apparent from recital 14 to the contested decision that the decision relates exclusively to the obligation imposed on Microsoft under Article 5(a) of the 2004 decision, according to which Microsoft is required to grant access to, and authorise the use of, the interoperability information on reasonable and non-discriminatory terms.
Work Group Server Protocol Program
22. It is apparent from recitals 21 to 23 to the contested decision that, by letter of 29 October 2004, Microsoft submitted to the Commission two draft agreements that it intended to offer to its competitors as part of a ‘Work Group Server Protocol Program’. These were the draft form of agreement for licensing the intellectual property rights in the protocols in question, and a draft form of agreement enabling prospective licensees to evaluate the protocols which would be licensed.
23. By letter of 20 May 2005, in the course of continuous exchanges with the Commission, Microsoft submitted five kinds of agreement (hereinafter, taken together, ‘the WSPP agreements’), namely:
– Microsoft Work Group Server Protocol Program License Agreement (All IP) for Development and Product Distribution (Work Group Server Operating System Software) (the ‘all IP agreement’);
– Microsoft Communications Protocol Program Agreement for Evaluation of Technical Documentation (3-Day);
– Microsoft Communications Protocol Program Agreement for Evaluation of Technical Documentation (30-Day);
– Microsoft Work Group Server Protocol Program License Agreement (No Patents) for Development and Product Distribution (Work Group Server Operating System Software) (the ‘No Patent agreement’);
– Microsoft Work Group Server Protocol Program Patent Only License Agreement for Development and Product Distribution (the ‘Patent Only agreement’) (recitals 32 and 33 to the contested decision).
24. It can be seen from recitals 33, 37, 39, 40, 44, 57, 59, 66, 92 and 103 to the contested decision that, in the course of the continued exchanges with the Commission, Microsoft submitted, between 20 May 2005 and 21 May 2007, 13 successive revised versions of the WSPP agreements containing remuneration schemes. One remuneration scheme, submitted on 22 October 2007, provides for the conclusion of a No Patent agreement under which access to and use of the technical documentation embodying the interoperability information is permitted for a one-time payment of EUR 10 000. Furthermore, a licensing agreement for the patented technologies is also available against remuneration calculated on the basis of the licensee’s net revenues (recital 102 to the contested decision).
25. According to recital 39 to the contested decision, the version of the WSPP agreements submitted by Microsoft to the Commission on 31 May 2005 also contained principles for pricing the interoperability information (‘the WSPP pricing principles’), which were drawn up following discussions between the two parties. The WSPP pricing principles were to guide the monitoring trustee not only when providing opinions, but also when called upon by a Microsoft licensee to decide whether or not the remuneration rate is reasonable, a decision that can ultimately be enforced in the High Court of Justice of England and Wales (recitals 47 and 113 to the contested decision).
Statement of objections
26. On 1 March 2007, the Commission sent a statement of objections to Microsoft (recital 73 to the contested decision).
27. By letter of 2 March 2007, Microsoft asked the Commission to specify the exact remuneration rates that Microsoft would have to set in order to comply with the obligations arising under the 2004 decision. By letter of 8 March 2007, the Commission replied that it was not for the Commission to prescribe the exact remuneration rates but to ensure that any remuneration rate set by Microsoft was reasonable and non-discriminatory in accordance with Article 5(a) of the 2004 decision (recital 75 to the contested decision).
28. By letter of 23 April 2007, Microsoft responded to the statement of objections. On 24 July 2007, the Commission sent a ‘letter of facts’ to Microsoft in order to give Microsoft the opportunity to comment on the evidence gathered after the adoption of the statement of objections. Microsoft submitted its observations on 31 August 2007 (recitals 82, 98 and 99 to the contested decision).
Assessment of compliance with the obligations imposed by Article 5(a) of the 2004 decision
Criteria for assessing the reasonableness of Microsoft’s remuneration rates
29. In recital 105 to the contested decision, the Commission recalled that, according to recital 1003 to the 2004 decision, any remuneration charged for access to, or use of, the interoperability information had to allow its users to compete viably with Microsoft’s work group server operating system. Moreover, according to recital 1008(ii) to the 2004 decision, such remuneration should not reflect the strategic value stemming from Microsoft’s market power in the client PC operating system market or in the work group server operating system market.
30. In those circumstances, the Commission considered that a condition imposed by Microsoft and having the potential effect of limiting access to, or use of, the interoperability information would be reasonable within the meaning of Article 5(a) of the 2004 decision only if it was necessary and proportionate to the legitimate interests of Microsoft which it was designed to protect. In order to be objectively justified, any remuneration charged by Microsoft should therefore reflect only the possible intrinsic value of the information in question, and exclude the strategic value stemming from the mere ability it affords to interoperate with Microsoft’s operating systems. It was for Microsoft to establish that this was the case (recitals 106 and 107 to the contested decision).
31. The Commission took the view that the WSPP pricing principles (see paragraph 25 above) were in accordance with the objectives expressed in recitals 1003 and 1008(ii) to the 2004 decision. Those principles provide that the remuneration scheme must enable the users of the interoperability information to compete viably with Microsoft. They also provide that, in order to assess whether the interoperability information reflects an intrinsic value, that is to say, that it does not consist in the strategic value described in paragraph 29 above, it is necessary (i) to examine whether the protocols concerned are Microsoft’s own creations, (ii) to examine whether those creations constitute innovation and (iii) to take into account a market valuation of comparable technologies, excluding the strategic value stemming from the dominant position of any such technologies (recitals 117 and 118 to the contested decision).
32. The Commission also stated, in recitals 119 and 158 to the contested decision, that it would apply the criteria set out in paragraph 31 above in order to assess whether the remuneration rates charged by Microsoft were reasonable.
33. Moreover, the Commission pointed out that its assessment would be made, for the period up to 21 October 2007, by reference to the version of the WSPP agreements submitted on 21 May 2007 (see paragraph 24 above). Since the remuneration scheme included in that version of the WSPP agreements provided for lower remuneration rates than those provided for in the previous versions, the Commission’s findings applied a fortiori to those previous versions, according to recital 103 to the contested decision.
34. With regard to the first criterion set out in paragraph 31 above, the Commission stated that it was not met if Microsoft used protocols which it takes from the public domain (recital 129 to the contested decision).
35. With regard to the second criterion set out in paragraph 31 above, the Commission pointed out that if the technologies in question were not novel, in the sense that they already formed part of the state of the art, or were obvious to persons skilled in the art, Microsoft was not entitled to remuneration. It took the view that the criteria of novelty and non-obviousness were appropriate, since they are settled concepts in the area of intellectual property (recitals 130 and 138 to the contested decision). In that context, it considered that minor incremental changes or minor improvements which would represent only a negligible value to the recipients of the interoperability information could not be regarded as innovative for the purposes of enforcing the 2004 decision (recital 144 to the contested decision).
36. The Commission added in that regard that, insofar as Microsoft put forward patents reading on protocol technologies disclosed with the technical documentation, the Commission assumed, provisionally and for the purposes of the contested decision, that those technologies were innovative (recital 132 to the contested decision).
37. With regard to the third criterion set out in paragraph 31 above, the Commission stated that it was designed to verify that Microsoft’s remuneration rates were in line with a market valuation of comparable technologies (recital 139 to the contested decision).
Assessment of the reasonableness of Microsoft’s remuneration rates
– General framework
38. In recitals 159 to 164 to the contested decision, the Commission summarised the general framework of the remuneration scheme proposed by Microsoft.
39. In that regard, the Commission stated that Microsoft was proposing various types of access to the interoperability information within the framework of the WSPP agreements. Within that framework, Microsoft offered access to protocols relating to 5 scenarios within the File/Print task, to 16 scenarios within the User and Group Administration task and to the ‘General Networking task’.
40. Four types of agreement gave access to interoperability information.
41. Firstly, the No Patent agreement allowed the recipients of interoperability information to develop and distribute work group server operating systems on the basis of the technical documentation.
42. Secondly, under the Patent Only agreement, Microsoft provided a licence to those patents which, according to Microsoft, read on the technology necessary to interoperate with Windows Client PCs and Windows work group server operating systems.
43. Thirdly, under the All IP agreement, Microsoft provided not only a licence to those patents which, according to Microsoft, read on the technology necessary to interoperate with Windows Client PCs and Windows work group server operating systems but also access to, and the right to use, the technical documentation.
44. Fourthly, under the ‘Interface Definition Language Only’ agreement, Microsoft provided access to, and the right to use, the technical documentation on these files.
45. It is also apparent from recital 160 to the contested decision that, for the majority of cases, Microsoft was charging remuneration rates based on the type of agreement chosen and applied a minimum and maximum amount for those rates. Remuneration rates were also provided for in respect of the scenarios as grouped in a task and in respect of the scenarios within the three tasks mentioned in paragraph 39 above as a whole. The remuneration to be paid was expressed either as a percentage of the licensee’s net revenue derived from the sale of products implementing the protocols in question, or as a fixed amount per server sold.
46. Finally, it is apparent from recitals 166, 167 and 297 to the contested decision that the Commission focused on the reasonableness of the remuneration rates charged by Microsoft for the non-patented technology included in the technical documentation and made available through the No Patent agreement.
– The innovative character of the protocols described in the technical documentation to which Microsoft provides access under the No Patent agreement
47. According to recital 169 to the contested decision, Microsoft claimed, in two reports submitted to the Commission on 31 July and 24 August 2006 respectively, that 173 protocols contained non-patented innovations.
48. To substantiate its appraisal, Microsoft (i) verified that the technology in question had been developed by or on behalf of Microsoft, (ii) described the problem resolved by that technology, (iii) described prior art technologies taken into account in order to determine that the protocol in question was innovative, and (iv) identified the location of those innovations in the revised technical documentation.
49. It is also clear from recitals 62, 69 and 171 to the contested decision that, at the Commission’s request, the monitoring trustee reviewed Microsoft’s claims concerning the non-patented technology following the methodology described in paragraph 48 above. The Commission made the same request to TAEUS, a specialist company, in respect of the scenarios ‘File Replication Service’, ‘Directory Replication Service’ and ‘Network Access Protection’. The reports of TAEUS and of the monitoring trustee were submitted to the Commission on 15 December 2006 and 27 February 2007 respectively.
50. The Commission stated that the monitoring trustee had reached the conclusion that little of the material provided by Microsoft in the technical documentation was innovative and therefore justified remuneration. Furthermore, TAEUS had concluded that none of the 21 technologies incorporated in the three scenarios which it examined was innovative (recitals 171 to 174 to the contested decision). According to footnote 197 to the contested decision, those conclusions had not been altered following Microsoft’s reply to the statement of objections, which had given rise to two reports by the monitoring trustee and one from TAEUS.
51. The Commission concluded, with regard to the 173 protocol technologies which Microsoft claimed were innovative, that for 166 technologies either there was prior art or they were obvious to persons skilled in the art, while 7 were innovative (recitals 175 and 219 to the contested decision).
52. The 173 technologies in question are set out in a table annexed to the contested decision, containing a summary description of each technology and, for most of the technologies, information regarding the date of their creation, the resulting benefits according to Microsoft, a reference to the file submitted by Microsoft, a summary assessment, a reference to prior art and a reference to the sources which, according to the Commission, substantiate the assessment made, and also information regarding prior art. The sources in question consist of two reports by the monitoring trustee dated 3 March and 8 July 2007 and observations made on 8 May 2007 by the European Committee for Interoperable Systems (‘ECIS’) on Microsoft’s reply to the statement of objections.
53. In recitals 187 to 218 to the contested decision, the Commission set out its analysis of the innovative character of 8 protocol technologies in the ‘Directory & Global Catalog Replication’ scenario, which forms part of the User and Group Administration task, and of 11 protocol technologies in the ‘File Replication Service’ scenario, which forms part of the File/Print task. With the exception of the arguments relating to the ‘File Staging’ technology, Microsoft’s claims concerning the innovative nature of those technologies were rejected by the Commission (recital 219 to the contested decision).
– Market valuation of comparable technologies
54. In recitals 220 to 279 to the contested decision, the Commission set out its assessment concerning a market valuation of technologies comparable to the non-patented technologies disclosed under the No Patent agreement. According to that assessment, comparable technologies were offered remuneration-free by Microsoft and by other undertakings, so that the market valuation showed that the remuneration rates charged by Microsoft were unreasonable.
Periodic penalty payment
55. The Commission stated, in recital 285 to the contested decision, that the decision related exclusively to the period from 21 June 2006 to 21 October 2007. In recital 298 to the contested decision, it specified that the scheme adopted by Microsoft on 22 October 2007 (see paragraph 24 above) did not give rise to objections as to the reasonableness of the remuneration rates which it contained. Accordingly, the Commission fixed the definitive amount of the periodic penalty payment at EUR 899 million for that period (recitals 299 and 300 to the contested decision).
Procedure and forms of order sought
56. By application lodged at the Court Registry on 9 May 2008, Microsoft brought the present action.
57. By document lodged at the Court Registry on 16 August 2008, Free Software Foundation Europe eV (‘FSFE’) and Samba Team sought leave to intervene in the present proceedings in support of the Commission.
58. By documents lodged at the Court Registry on 19 August 2008, the Software & Information Industry Association (‘SIIA’) and ECIS sought leave to intervene in the present proceedings in support of the Commission.
59. By documents lodged at the Court Registry on 25 August 2008, International Business Machines Corp. (‘IBM’) and Red Hat Inc. sought leave to intervene in the present proceedings in support of the Commission.
60. By document lodged at the Court Registry on 26 August 2008, Oracle Corp. sought leave to intervene in these proceedings in support of the Commission.
61. By documents lodged at the Court Registry on 25 and 26 August 2008 respectively, The Computing Technology Industry Association, Inc. (‘CompTIA’) and the Association for Competitive Technology, Inc. (‘ACT’) sought leave to intervene in the present proceedings in support of Microsoft.
62. By order of 20 November 2008, the President of the Seventh Chamber of the Court granted those applications.
63. The interveners lodged their statements in intervention and the other parties submitted their observations thereon within the prescribed periods.
64. The composition of the chambers of the Court having been modified, the Judge-Rapporteur was assigned to the Second Chamber, to which this case was therefore allocated.
65. Acting upon a report of the Judge-Rapporteur, the Court decided to open the oral procedure and, by way of measures of organisation of procedure, invited the parties to produce certain documents and other information.
66. Microsoft claims that the Court should:
– annul the contested decision;
– in the alternative, cancel or reduce the amount of the periodic penalty payment;
– order the Commission and the interveners supporting it to pay the costs.
67. The Commission contends that the Court should:
– dismiss the action;
– order Microsoft to pay the costs.
68. FSFE, Samba Team, SIIA, ECIS, IBM, Red Hat and Oracle contend that the Court should:
– dismiss the action;
– order Microsoft to pay the costs relating to their intervention.
69. CompTIA claims that the Court should:
– annul the contested decision;
– order the Commission to pay the costs relating to its intervention.
70. ACT claims that the Court should:
– annul the contested decision;
– in the alternative, cancel or reduce the amount of the periodic penalty payment imposed on Microsoft;
– order the Commission to pay the costs relating to its intervention.
Law
71. The pleas put forward by Microsoft allege, first, that it was unlawful to impose a periodic penalty payment before Microsoft’s obligations under Article 5 of the 2004 decision had been made sufficiently specific; second, that the Commission erred in concluding that the remuneration rates relating to the No Patent agreement were unreasonable; third, that the Commission made an error in relation to the criteria applied to assess the innovative character of the protocol technologies in the No Patent agreement; fourth, that reliance on the reports of the monitoring trustee was unlawful; fifth, that the rights of the defence were infringed and, sixth, that there is no legal basis for the imposition of a periodic penalty payment and that the amount thereof is excessive and disproportionate.
72. Moreover, in the first, second, third and sixth pleas, Microsoft claims that the contested decision is invalidated by a failure to state reasons.
First plea: it was unlawful to impose a periodic penalty payment before Microsoft’s obligations under Article 5(a) of the 2004 decision had been made specific
Arguments of the parties
73. In support of its first plea, Microsoft raises a set of four complaints.
74. First, the Commission infringed its obligation to specify positively what Microsoft had to do in order to comply with Article 5(a) of the 2004 decision. It is apparent from the Commission’s practice in previous decisions that it could have specified, in the 2004 decision, the remuneration rates to which Microsoft was entitled. The expression ‘reasonable rates’ includes rates of various levels. This view does not amount to a challenge of the legality of the 2004 decision, nor does it deny that it is possible to implement provisions which include imprecise legal concepts, but it does challenge the right to impose a periodic penalty payment for infringement of the aforementioned provision before the obligations arising under it had been made specific.
75. With a view to specifying those obligations before requiring Microsoft to comply with them, the Commission established the procedure laid down in Article 5(d) of the 2004 decision. However, as the Commission stated in the statements of objections sent to Microsoft in August 2000 and August 2003, and as is apparent from recital 995 to the 2004 decision, if the measures proposed by Microsoft were unsatisfactory, the Commission would impose the necessary measures by means of a decision. However, the Commission consistently refused to specify what it meant by ‘reasonable remuneration rates’, even though the responsibilities which it assumed under Article 5 of the 2004 decision required it to impose on Microsoft positively specified conditions by means of a decision. Since the WSPP pricing principles give only general guidelines which do not lead to an exact figure, they cannot be considered sufficient. Microsoft submits that the claims relating to the absence of intrinsic value and to the common practice of providing interoperability information free of charge have no factual basis and that their credibility is undermined by the conclusion of licensing agreements in accordance with Microsoft’s remuneration scheme.
76. Second, Microsoft claims that the Commission’s conduct amounts to an infringement of Article 24 of Regulation No 1/2003, since the imposition of a periodic penalty payment designed to compel a person to adopt a certain course of action presupposes that the obligations of the person in question have been specified exactly; otherwise, the imposition of the periodic penalty payment infringes fundamental rights. It argues that in the present case the Commission, which was not entitled to initiate the procedure under Article 24 of Regulation No 1/2003 if it did not know exactly what Microsoft had to do to comply with the 2004 decision, could have relied on the monitoring trustee to specify Microsoft’s obligations to the required degree.
77. Third, Microsoft, supported by CompTIA, states that, by imposing a periodic penalty payment before specifying Microsoft’s obligations to the required degree, the Commission infringed the principle of sound administration. In that regard, CompTIA maintains that the Commission’s action is characterised by a lack of transparency, objectivity and fairness, while the periodic penalty payment imposed is arbitrary and disproportionate in the light of the circumstances of the case. According to CompTIA, the Commission’s conduct is a source of risk and uncertainty which will discourage innovation to the detriment of the consumer.
78. Fourth and finally, Microsoft claims that, by refusing to adopt a decision which was open to judicial review and which specified the obligations arising under Article 5(a) of the 2004 decision in respect of remuneration rates, the Commission compelled Microsoft to comply with its requests to lower the remuneration rates for all the WSPP agreements, without, however, being able to bring proceedings concerning the legality of the requests in question. Thus, Microsoft has been deprived of its right to effective judicial protection against the assessments, always ‘preliminary’, made by the Commission. Furthermore, even if Microsoft had refused to review its proposals or had brought an action for damages or an action for failure to act, those actions would not have led to a Commission decision defining a reasonable remuneration rate.
79. Since Microsoft has repeatedly raised these arguments during the administrative proceedings without receiving any response, even in the contested decision, the latter is also invalidated by a failure to state reasons.
80. ACT maintains that Microsoft implemented the most appropriate methods to define its obligations under Article 5(a) of the 2004 decision, whereas the Commission merely rejected the corresponding research results without even giving the clarifications which Microsoft needed in order to comply with the obligations in question. Moreover, the Commission requested information only from the undertakings which supported its position.
81. The Commission and the interveners supporting it dispute the merits of this plea and add that Microsoft cannot, in the present action, plead an alleged lack of precision of the 2004 decision regarding the definition of its obligations.
Findings of the Court
82. The Court must reject at the outset the Commission’s argument that Microsoft is challenging the legality of the 2004 decision. In fact, as is apparent from Microsoft’s pleadings, its arguments are not based on the alleged illegality of Article 5(a) of the 2004 decision but on the fact that it is allegedly impossible for the Commission to impose a periodic penalty payment for infringement of the provision in question without first having determined, by means of a decision against which an action may be brought, the rate of remuneration that it considers reasonable. That issue clearly concerns the legality of the contested decision, under which the periodic penalty payment was imposed.
83. It should then be recalled that, as is clear from recital 280 to the contested decision, the periodic penalty payment in question was imposed on the ground that Microsoft did not allow access to, or use of, the interoperability information covered by the No Patent agreement on ‘reasonable terms’, in breach of the obligation laid down in Article 5(a) of the 2004 decision.
84. So far as the latter provision is concerned, 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, to that effect, Case C-303/05 Advocaten voor de Wereld
[2007] ECR I-3633, paragraph 50, and judgment of 22 May 2008 in Case C-266/06 P Evonik Degussa
v Commission, not published in the ECR, paragraph 39).
85. In that regard, in accordance with a settled line of authority (order in Case C-497/99 P Irish Sugar
v Commission [2001] ECR I-5333, paragraph 15; judgments in Case T-136/94 Eurofer
v Commission
[1999] ECR II-263, paragraph 271, and in Case T-271/03 Deutsche Telekom
v Commission
[2008] ECR II-477, paragraph 252), the operative part of the 2004 decision must be read and interpreted in the light of the grounds of that decision. It is clear from recital 1003 to the 2004 decision that its objective is to ensure that Microsoft’s competitors can develop, by implementing the specifications made available, products which interoperate with the Windows domain architecture natively supported in the dominant Windows client PC operating system and hence viably compete with Microsoft’s work group server operating system. Furthermore, in recital 1008(ii) to the 2004 decision, it is stated that any remuneration that Microsoft might ask in return for access to and use of interoperability information should not reflect the strategic value stemming from Microsoft’s market power in the client PC operating system market or in the work group server operating system market.
86. Against that background, following negotiation with the Commission (recitals 39, 111 and 113 to the contested decision), Microsoft, in May 2005, incorporated the WSPP pricing principles into the WSPP agreements. Thus, in Section 7.5 of the No Patent agreement (version of 21 May 2007), Microsoft declares that it has applied those pricing principles in establishing its remuneration table and indicates that, under Section 7.7(d) of that agreement, the monitoring trustee and the High Court of Justice are competent to impose obligations on Microsoft in the event of a breach of the pricing principles.
87. As regards the substance of the WSPP pricing principles, which are described in paragraph 31 above, the Court notes that they provide cumulative, sufficiently precise criteria that enable Microsoft to assess whether a given technology has an intrinsic value distinct from its strategic value, as described in both recital 1008(ii) to the 2004 decision and the WSPP pricing principles. Moreover, nothing permits the inference that those pricing principles, which are founded on Article 5 of the 2004 decision, are suitable for application by the monitoring trustee and the High Court of Justice but are not sufficient for Microsoft to adopt a course of conduct that complies with Article 5 or for the Commission to carry out its task of monitoring that conduct.
88. It follows that the Commission was entitled to impose a periodic penalty payment on Microsoft for failure to comply with its obligations under Article 5(a) of the 2004 decision, the latter provision meeting the conditions set out in paragraph 84 above.
89. It should be added that, in a letter dated 18 April 2005, the Commission explained to Microsoft that all remuneration should be by way of a one-time fee and should not be calculated as a percentage of revenue deriving from the sale of products sold by Microsoft’s competitors. Furthermore, as SIIA points out, on 1 March 2007, Mr B., Microsoft’s Senior Vice President, General Counsel and Corporate Secretary, stated at a press conference, the transcript of which appears on Microsoft’s website, that the WSPP pricing principles were ‘very clear’ despite being somewhat complicated.
90. Microsoft’s argument that the Commission should itself first have established, by means of a decision amenable to judicial review, the appropriate remuneration rate before it could impose a periodic penalty payment is also unfounded.
91. As is clear from paragraph 84 above, the use of imprecise legal concepts within a provision does not prevent liability being established as against a person who contravenes it. As the Commission points out, if it were otherwise, an infringement of Article 101 or 102 TFEU — which are themselves drawn up using imprecise legal concepts, such as distortion of competition or ‘abuse’ of a dominant position — could not give rise to a fine without the prior adoption of a decision establishing the infringement.
92. Contrary to Microsoft’s contention (see paragraph 75 above), Article 5(d) of the 2004 decision has the sole purpose of compelling Microsoft to adopt and disclose to the Commission the measures that it intends to take in order to comply with its obligations under points (a) to (c) of Article 5. That article thus lays down an obligation seeking, as it explains, to enable the Commission to assess, before expiry of the 120-day period laid down in point (a), the measures which Microsoft is proposing to take in order to bring the infringement to an end. It thus does not follow, either from Article 5(d) of the 2004 decision or, a fortiori, from recital 995 thereto, that the Commission, in any way whatsoever, undertook to define, by means of a decision, a reasonable remuneration rate before imposing a periodic penalty payment.
93. It should be added in that regard that the periodic penalty payment imposed pursuant to the contested decision covers the period from 21 June 2006 to 21 October 2007. As is apparent from recital 101 to the 2005 decision and from recital 232 to the 2006 decision (see paragraphs 15 and 16 above), Microsoft had not even provided, as at 20 June 2006, an accurate and complete version of the interoperability information; thus, even if the Commission had deemed it appropriate to establish reasonable remuneration rates, it would have been impossible for it to do so.
94. Furthermore, the distinction between a fine and a periodic penalty payment which Microsoft seeks to establish (see paragraph 76 above) is of no relevance to the question raised in the context of this plea. First, a fine imposed under Article 23 of Regulation No 1/2003 and a definitive periodic penalty payment, such as that at issue, imposed under Article 24(2) of that regulation, are consequent, respectively, upon (i) an infringement of Article 101 or 102 TFEU and (ii) a decision ordering that the infringement in question be brought to an end and, where appropriate, prescribing behavioural remedies. Second, 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.
95. Microsoft is, on the other hand, right to maintain that several rates may be covered by the notion of ‘reasonable remuneration rates’. Nevertheless, that finding confirms the merits of the Commission’s argument that it is not for it to choose a particular rate of remuneration from among what are reasonable rates for the purpose of the 2004 decision and impose that rate upon Microsoft. Indeed, although the Commission undoubtedly has the power to find that an infringement 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, such as the 2004 decision (see, to that effect, Case T-24/90 Automec v Commission
[1992] ECR II-2223, paragraph 52). 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. It is thus for Microsoft to grant rights of access to, and use of, the interoperability information at remuneration rates that are reasonable for the purpose of Article 5(a) of the 2004 decision and the Commission may not impose a periodic penalty payment on Microsoft should it take the view that the rates in question are reasonable but that other, possibly ‘even more reasonable’, rates should have been proposed.
96. In those circumstances, the Court must reject Microsoft’s argument alleging infringement of the principle of sound administration (see paragraph 77 above).
97. Finally, Microsoft’s argument alleging infringement of the right to effective judicial protection cannot succeed either. In that regard, it is sufficient to observe that, in these proceedings, Microsoft is challenging the Commission’s assessment of the innovative character of the technologies in question and, as a consequence, its assessment of the reasonableness of the rates of remuneration. Microsoft’s complaint thus amounts, in essence, to claiming that it would have been able to challenge that assessment sooner if the Commission had established, by means of a decision, the appropriate rate. If that had been what Microsoft wanted, it could — instead of entering into a long dialogue with the Commission and gradually reducing the rates charged — first of all, have made available at the earliest opportunity an accurate and complete version of the interoperability information and then have definitively adopted the remuneration rates that it considered appropriate. In such a situation, if the Commission were to consider the rates in question unreasonable, a decision such as the one challenged in the present case would have been adopted earlier. Microsoft’s right to effective judicial protection has thus not been affected in any way whatsoever.
98. The Court must also reject the part of this plea which alleges that the obligation to state reasons has been infringed as a result of the Commission’s failure to answer these arguments, which had also been put forward during the administrative proceedings.
99. It is settled case-law that the statement of reasons required under Article 253 EC must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted that measure, in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court to exercise its power of review. The requirement to state reasons must be evaluated according to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to the wording of the measure, but also to its context and to all the legal rules governing the matter in question (Case C-265/97 P VBA
v Florimex and Others [2000] ECR I-2061, paragraph 93).
100. As is clear from the foregoing analysis, the legal rules governing the area concerned do not prevent a periodic penalty payment being imposed without the prior specification of a rate of remuneration which, in the Commission’s view, would be reasonable for the purpose of Article 5(a) of the 2004 decision. That being so, the Commission fulfils its obligation to state reasons when it sets out clearly and unequivocally the reasons why the remuneration rates charged by Microsoft were unreasonable, there being no need for that purpose for reasoning dealing specifically with the possibility of the Commission imposing a periodic penalty payment without first specifying a reasonable rate.
101. Accordingly, the first plea must be rejected.
Second plea: the Commission erred in law by concluding that the remuneration rates relating to the ‘No Patent’ agreement were unreasonable
Arguments of the parties
102. Microsoft argues that, in view of the imprecise nature of the notion of reasonable remuneration and the Commission’s refusal to specify Microsoft’s obligations, it agreed to create a mechanism for negotiating remuneration rates with potential licensees and to submit to arbitration by the monitoring trustee. Furthermore, at the Commission’s request, Microsoft fixed remuneration rates at even lower levels than those suggested by PricewaterhouseCoopers, a world-renowned firm of experts, which were based on the evaluation of technologies reasonably considered to be comparable and in accordance with universally accepted methods. However, as is widely known, even those rates served merely as a starting point in negotiations with potential licensees, it being possible to refer the matter to the monitoring trustee in the event of disagreement, in order to define a reasonable rate pursuant to the WSPP pricing principles. Even if the Commission did not agree with the assessment of the external specialists appointed by Microsoft in good faith and with the aim of complying with the 2004 decision, it cannot be accepted that Microsoft applied unreasonable, let alone discriminatory, remuneration rates, since none of its licensees considered it appropriate to refer the matter to the monitoring trustee, even during the negotiations, although Microsoft’s position was weakened because of the threat of a very high periodic penalty payment. In any event, the implementation of that dispute resolution mechanism with Microsoft’s agreement ensured that any remuneration eventually paid would be reasonable because it would be in accordance with the WSPP pricing principles applied by the monitoring trustee.
103. In those circumstances, it must, in Microsoft’s submission, be concluded that the reason why certain undertakings did not even negotiate with Microsoft or refer the matter to the monitoring trustee was not that the remuneration rates proposed by Microsoft were unreasonable but rather that they did not believe that the protocols in question were not innovative.
104. Microsoft also rejects as materially inaccurate the arguments that the undertakings which concluded licensing agreements paid for the strategic value of the technologies in question and were not competitors of Microsoft.
105. The fact that the agreements concluded with Microsoft concern the All IP agreement is irrelevant, since it cannot be inferred from that that the remuneration rates proposed for the No Patent agreement were unreasonable and since the technical documentation was exactly the same in both cases.
106. Since Microsoft repeatedly raised these arguments during the administrative proceedings without receiving any response, including in the contested decision, the latter is also vitiated by a failure to state reasons.
107. Faced with the Commission’s refusal to specify the remuneration rates which it considered reasonable, Microsoft also undertook to apply retroactively to the date of adoption of the 2004 decision whatever rates would ultimately be defined as reasonable as a result of the exchanges with the Commission, so that potential licensees would be certain that in the end they would have to pay only a reasonable price. The Commission’s claim regarding the dissuasive effect of remuneration rates which are only proposed, and not ‘applied’ by Microsoft, is only a supposition which is unsupported by evidence.
108. Microsoft maintains that, if the Commission accorded so much importance to the opportunity for potential licensees to calculate the licence costs accurately, it should have adopted a decision specifying the reasonable maximum rate instead of imposing an arbitration mechanism.
109. Supported by CompTIA, Microsoft maintains that the product of arm’s length negotiations is the most reliable indicator of the reasonable character of a given remuneration rate. Four undertakings had already concluded, of their own free will, agreements for access to the interoperability information even at a price higher than that regarded by the Commission to be unreasonable, a fact which cannot be ignored in favour of theoretical and abstract arguments. Furthermore, according to CompTIA, it is impossible to know at the negotiation stage whether the undertakings in question intended to develop technologies to compete with those of Microsoft, this issue being in any event irrelevant to the purpose of the 2004 decision.
110. Microsoft adds that the 2004 decision does not preclude it from charging remuneration rates which are a proportion of the revenue of the licensees nor does it require Microsoft to adapt to the business model of each of its potential licensees.
111. Finally, the Commission ignored the fact that, in spite of its name, the No Patent agreement gave interested parties the right to use Microsoft’s patented innovations. If the Commission considers that Microsoft’s pledge not to assert rights under the corresponding patents does not have the desired effect, it should state so clearly in these proceedings.
112. The Commission and the interveners supporting it dispute the merits of this plea.
Findings of the Court
113. The Court must reject at the outset Microsoft’s argument that the remuneration rates charged during the period covered by the contested decision were merely proposals acting as a starting point for negotiations that would culminate in reasonable rates. In fact, the purpose of Article 5(a) of the 2004 decision is not only to oblige Microsoft to negotiate with any undertaking having an interest in developing and distributing work group server operating system products but also to compel it to make the interoperability information available to the undertaking and to allow the use of it for that purpose on reasonable and non-discriminatory terms.
114. It follows that Microsoft was obliged to propose such terms on its own initiative as soon as the period of 120 days accorded by Article 5(a) of the 2004 decision was over. As a corollary, the fact that the remuneration rates proposed by Microsoft during the period covered by the contested decision are lower than those proposed by PricewaterhouseCoopers in its report of 23 April 2007 is irrelevant, particularly since that report does not contain an analysis of whether the technologies in question were innovative. Concerning, moreover, the lack of a definition of reasonable remuneration and the Commission’s obligations in that regard, the Court recalls the considerations in paragraphs 84 to 95 above.
115. The Court cannot accept Microsoft’s argument that its agreement to create the independent monitoring trustee mechanism ensured that all remuneration eventually paid would be reasonable because it would be in accordance with the WSPP pricing principles applied by the monitoring trustee. As has been pointed out in paragraphs 113 and 114 above, Microsoft’s obligation under the 2004 decision was to make the interoperability information available on its own initiative and to authorise the use of it on reasonable and non-discriminatory terms. In those circumstances, the existence of an arbitration mechanism entrusted to an independent trustee is intended, at the very most, to attenuate the consequences should the dominant undertaking persist in the abuse, in order to settle possible disputes quickly and, above all, with the advantage of a particularly high level of relevant knowledge. However, the implementation of such a mechanism cannot restore the competitive situation as it would have been if Microsoft had, on its own initiative, offered access to the interoperability information on reasonable terms. That finding is particularly relevant in the context of markets which are evolving rapidly and in which the development of products such as those at issue is dependent on investments where the fixed cost is very high and must be calculable in advance by interested parties. In addition, as the Commission explained in response to a written question from the Court — without being contradicted by Microsoft — an accurate and complete version of the interoperability information could be considered to have been made available (in the sense that a software development project could be based on it) on 23 November 2006. It follows that the very basis of the monitoring trustee’s task as an arbiter of the reasonableness of the prices proposed by Microsoft was seriously compromised at least until that date. The fact that an arbitration mechanism was in place only following conclusion of a No Patent agreement thus cannot be regarded as a factor that could fully remedy the consequences of the failure to comply with the obligations imposed under Article 5(a) of the 2004 decision.
116. The same is true of the ‘fast-track dispute resolution procedure’ contained in the evaluation agreements of October 2005 and February 2006 (see paragraph 23 above), to which reference is made in footnote 136 to the contested decision. Indeed, as is clear from its wording (which, according to Microsoft, is in identical terms in the February 2007 versions), in the event of disagreement between Microsoft and a prospective licensee on whether the prices charged, or the categorisation of the technologies, were in accordance with the WSPP pricing principles, the licensee must notify Microsoft in writing of the reasons why it believes that Microsoft is failing to comply with its obligations. If the dispute is not settled within 15 working days, the potential licensee may refer the matter to the monitoring trustee, who is entitled to produce an opinion on the issue. In such a case, Microsoft is required to provide in writing the reasons that it claims support the pricing or terms concerned.
117. It is clear from the ‘fast track dispute resolution’ clause that the mechanism provided for does not give the monitoring trustee power to impose, following an ex ante review with a view to the future conclusion of a WSPP agreement, remuneration rates consistent with the WSPP pricing principles but solely power to give an opinion in that regard, since Microsoft is able to maintain its position, stating the reasons for its decision. Thus, even leaving aside the fact that Microsoft was required, under Article 5(a) of the 2004 decision, to propose reasonable and non-discriminatory terms on its own initiative, the fact remains that the mechanism in question was not appropriate for achieving a result equivalent to that sought by Article 5(a).
118. Furthermore, the fact that Microsoft undertook to apply retroactively the rates which the Commission accepted were reasonable does not affect the finding that, during the period covered by the contested decision (that is to say, well after expiry of the period laid down by Article 5(a) of the 2004 decision), those rates were not offered by Microsoft to undertakings having an interest in developing and distributing work group server operating system products.
119. Moreover, the fact that some undertakings concluded agreements with Microsoft on the rates asked by it without referring the matter to the monitoring trustee is not sufficient to undermine the reasons set out in recitals 165 to 219 to the contested decision concerning the innovative character of the technologies in question. Firstly, as Microsoft concedes, the agreements in question are All IP agreements, which means that they also concern Microsoft’s patented technologies, whose innovative character has not been called in question by the Commission. Thus, although the fact that the agreements concerned are All IP agreements does not establish that Microsoft’s remuneration rates under the No Patent agreement are unreasonable, it does not establish the contrary either. Secondly, assuming that the managers of those companies were convinced that the technologies concerned were innovative, the key question is whether the Commission’s analysis in this regard is objectively in compliance with the applicable rules in the area, a question which will be examined in the context of the third plea.
120. It is also important to make clear that, although the 2004 decision does not preclude Microsoft from charging remuneration rates which are a proportion of the revenue of the licensees, such rates may be sought only if they represent value other than the strategic value of the technologies in question (see recital 1008(ii) to the 2004 decision). The Commission’s assessment in the contested decision addresses precisely that aspect. Furthermore, it is to be noted that — subject to the obligation to provide interoperability information on non-discriminatory terms — the 2004 decision remains neutral as regards the possibility for each of Microsoft’s potential licensees to enter into an agreement with Microsoft adapted to its business model. That is a fortiori the case so far as the contested decision is concerned, inasmuch as Microsoft’s behaviour is analysed on the basis of whether the technologies concerned are innovative and not on the basis of whether it is possible for each of the potential licensees to conclude an agreement with Microsoft in the light of its business model. Microsoft’s arguments summarised in paragraph 110 above must thus be rejected as ineffective.
121. With regard to Microsoft’s argument that the No Patent agreement gives interested parties the right to use patented technologies, it is sufficient to observe that, according to Section 1.14 of that agreement, ‘Microsoft licensed intellectual property’ includes know-how, industrial secrets, trade secrets, confidential information and copyright with the explicit exclusion of any rights covered by a patent or a patent application. As to Microsoft’s unilateral pledge not to assert any patent rights, the Court notes, like the Commission, that it was made only on 24 October 2007, that is to say, after the end of the period covered by the contested decision. Moreover, as Microsoft acknowledges in its observations on the statements in intervention, that pledge covers only non-commercial distribution, excluding commercial distribution by ‘open source’ developers. Finally, the fact remains that the possible disclosure, under the No Patent agreement, of information relating to patented technologies (technologies other than those set out in the annex to the contested decision) does not entail any right for Microsoft’s licensees to implement those technologies in such a way as to infringe the patents concerned. As the Commission explains, that information is publicly available where a patent has been granted, but that does not mean that it is possible for a developer to make use of it. That being so and in view of the distinction between patented and non-patented interoperability information (see recitals 161 to 164 to the contested decision), it cannot be concluded that the No Patent agreement affords Microsoft’s licensees the right to implement patented technologies, which, in any event, they state they do not need in order to develop work group server operating system products.
122. As to Microsoft’s complaint alleging a failure to state reasons, the Commission, as demonstrated in recitals 122 to 127 and 273 to 278 to the contested decision, has responded to the arguments based on the fact that agreements had been concluded with some operators. Moreover, even if Microsoft stated during the administrative proceedings that it was still willing to negotiate the prices set out in its remuneration schemes, it is very clear from recital 116 to the contested decision that the WSPP pricing principles had to be respected with regard to all remuneration ‘proposed and/or established by Microsoft’. That means that the fact that remuneration consistent with the principles in question might possibly result from negotiations with Microsoft is, as is also clear from recital 116, irrelevant so far as compliance with the obligations imposed by Article 5(a) of the 2004 decision is concerned. Accordingly, this complaint must be rejected, as must the second plea in its entirety.
Third plea: the Commission erred in relation to the criteria applied to assess the innovative character of the technologies covered by the ‘No Patent’ agreement
Arguments of the parties
123. Microsoft reiterates that the Commission ignored the value of the patented innovations described in the No Patent agreement and adds that the application of a patentability standard for assessing the innovative character of non-patented technologies constitutes a manifest error of assessment. In addition, the contested decision is vitiated by a failure to state reasons.
124. This plea is not ‘ineffectual’, since Microsoft has not conceded that the Commission’s analysis of the third criterion of the WSPP pricing principles is correct. That analysis is based on an erroneous perception of the meaning of ‘innovation’, a fact which is bound to affect the choice of technologies regarded as comparable. CompTIA points out that the technologies chosen by the Commission as comparable are part of a different business model from that implemented by Microsoft, so the Commission’s market valuation is invalidated.
125. The view that Microsoft is entitled to receive remuneration only for novel and non-obvious technologies within the meaning of patent law finds no support in the 2004 decision or in the WSPP pricing principles or in the law in general. Microsoft has not conceded that the application of those criteria, by the Commission and by the monitoring trustee, was appropriate in this case. Supported by CompTIA and ACT, Microsoft points out that trade secrets may be of great value, owing mainly to the fixed development costs, irrespective of whether they are also patentable or already patented, since the undertaking concerned must be free to adopt a policy in that regard. Contrary to what IBM maintains, the functionality of the ‘File Replication Service’ protocol is of crucial importance, hence the fact that one of its aspects is patented in the United States. The Commission has not explained how the patentability standard it applied is designed specifically to exclude the strategic value of Microsoft’s technologies in accordance with recital 1008(ii) to the 2004 decision. According to ACT, only an assessment of the value of the interoperability information in the absence of any dominant operator would have made it possible to evaluate, in the light of the 2004 decision, the rates proposed by Microsoft.
126. Supported by ACT, Microsoft claims that the Commission applied the criteria of novelty and non-obviousness too restrictively and therefore in a manner contrary even to patent law. Thus, contrary to the rules of assessment established by the Commission in other areas, it is only truly pioneering inventions, totally different from prior art, which may be regarded as novel in the present context. However, the existence of prior art references relating to broadly similar concepts to those implemented by Microsoft does not mean that collectively the technologies covered by the contested decision are obvious — technologies which Microsoft’s competitors have, moreover, been unable to develop, as CompTIA and ACT confirm. According to CompTIA, it is the market and not the Commission which must determine the best technology. The Commission goes so far as to deny, in the defence, that the criterion of novelty as applied in intellectual property law is appropriate, so that it is not clear to Microsoft what criterion was finally implemented in the contested decision
127. Furthermore, the ‘granular’ approach adopted in the contested decision excludes from the concept of innovation any non-obvious combination of known elements. However, it is apparent from the case-law of the Boards of Appeal of the European Patent Office (EPO) that the relevant question is not whether a skilled person could have made such a combination but whether he actually would have done so in expectation of an improvement. Observing that the Commission has conceded that some of the technologies concerned by the contested decision are innovative, ACT maintains that the technology must be described as innovative as a whole, where it consists in a combination of novel and non-obvious elements and non-patentable elements. There is nothing to show that the Commission actually examined Microsoft’s technological combinations as such.
128. Microsoft submitted, during the administrative proceedings, several reports showing the truth of its claims relating to the novelty and non-obviousness of the non-patented inventions contained in the technical documentation, which the Commission rejected. There is therefore no need to increase the burden of documentation submitted to the Court, since the relevant issue is whether the Commission’s approach is consistent with the 2004 decision.
129. Microsoft also submits that the contested decision is vitiated by a failure to state reasons, since it contains no response to the analysis contained in a report drawn up by a professor and barrister, a former member of the Board of Appeal of the EPO, who set out in detail the errors made by the Commission in patent law, confirming the accuracy of Microsoft’s claims. It is also apparent from that report that the Commission and the monitoring trustee considered the patentability of the technologies taking account of the state of the art in 2007 and not at the time Microsoft would have applied for the grant of a patent, thus taking account of technologies which appeared after the first implementation of the crucial technologies by Microsoft. According to this logic, no undertaking could demonstrate that its technology is novel and non-obvious, while there is arbitrary discrimination between the various technologies depending on whether or not Microsoft has chosen to apply for a patent. Moreover, the contested decision contains only vague references with no specific comparisons between the claims of those technologies and those of the prior art technologies.
130. Microsoft argues that, irrespective of specific examples, the fundamental errors it has identified vitiate the Commission’s analysis in its entirety, so that the Court must find that the contested decision is unlawful, as part of the full review which it is called upon to make. In any event, the existence of innovation at a less ‘granular’ level is apparent from the fact that, in the contested decision, the Commission altered its view and considered that Microsoft was entitled to charge remuneration for licences granted under agreements other than the No Patent agreements. However, the technical documentation is exactly the same in all the WSPP agreements.
131. ACT adds that the Commission’s approach encourages the transfer of valuable technologies at abnormally low prices, prevents investment in research by horizontally devaluing intellectual property rights and disproportionately favours the ‘open source’ model to the detriment of innovative small and medium-sized enterprises.
132. Supported by SIIA and by Oracle, the Commission submits that this plea is ‘ineffectual’, since the operative part of the contested decision rests not only upon the assessment of the innovative character of the technologies in question but also upon the result of the market valuation for comparable technologies. Microsoft has not challenged the finding in paragraph 54 above, and merely to reject it at the stage of the reply does not satisfy the conditions of Article 44(1)(c) or of Article 48(2) of the Rules of Procedure of the Court. Furthermore, as is apparent from recitals 165, 220, 221 and 280 to the contested decision, the analysis of innovative character is separate from the analysis of the market valuation. For the sake of completeness, the Commission and the interveners supporting it contend that this plea is unfounded.
Findings of the Court
133. The Court must reject at the outset the Commission’s argument that this plea is ‘ineffectual’.
134. Although it is true that the three criteria forming part of the WSPP pricing principles must all be met, the second and third are conceptually linked in that, if the technologies in question are regarded as innovative, the requirement that the market valuation concern ‘comparable’ technologies is not satisfied merely because the latter technologies relate to interoperability.
135. In that regard, if the technologies comprising the interoperability information are found to be innovative, but a market valuation concerning non-innovative interoperability technologies shows that the latter are available free of charge, it will still be necessary — for the comparison to continue to be of use — to exclude the possibility that the technologies concerned are available free of charge because they are not innovative.
136. It follows that if the Commission’s findings as to the innovative character of the technologies covered by the No Patent agreement prove to be incorrect, that may affect the premisses on which the market valuation set out in recitals 222 to 237 to the contested decision is based, since it does not appear from those recitals that the analysis in question concerned innovative technologies.
137. That conclusion is not undermined by recital 237 to the contested decision, according to which the monitoring trustee, in his report submitted on 27 February 2007 (see paragraph 51 above), identified some technologies comparable to Microsoft’s innovative technologies. Unlike the reports of 3 March and 8 July 2007, on the basis of which the table annexed to the contested decision was drawn up, the relevant findings of that report do not form part of the statement of reasons in the contested decision. That being the case, should the Commission’s assessment prove incorrect, it will not be possible to verify whether the technologies considered by the monitoring trustee are also comparable to the technologies considered to be non-innovative by the Commission. The same is true of the references made in recitals 223 and 231 to the contested decision, according to which comparable technologies include ‘in some cases’ patented technologies. Such examples of protocol technologies are given in recitals 224 and 232 to the contested decision. However, it cannot be inferred from that brief presentation that those technologies are comparable from a functional point of view with all the technologies relating to the protocols concerned.
138. As to the merits of this plea, it should be made clear, as a preliminary point, that the distinction between the strategic value and the intrinsic value of the technologies covered by the contested decision is a basic premiss of the assessment of the reasonableness of any remuneration charged by Microsoft for allowing access to, and use of, the interoperability information.
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 (Case C-418/01 IMS Health
[2004] ECR I-5039, paragraph 38).
140. In this case, it has been found that, since the three cumulative conditions mentioned in paragraph 139 above were satisfied, Microsoft’s refusal to give access to the interoperability information and to authorise its use was abusive (see, to that effect, Microsoft
v Commission, paragraph 18 above, paragraphs 711 and 712).
141. In that context, any remedial measure intended to compel Microsoft to make the interoperability information available and to allow other operators to use it in order to develop and distribute work group server operating system products had to exclude the possibility for Microsoft to make earnings comparable to the benefits that it derived from abusing its dominant position on the market for client PC operating systems.
142. Moreover, allowing Microsoft to charge remuneration rates reflecting the value resulting from the mere ability to interoperate with Microsoft’s operating systems — in other words the strategic value stemming from Microsoft’s power in the client PC operating systems market or the work group server operating systems market — would in effect allow it to transform the benefits of the abuse into remuneration for the grant of licences. Recognition of such a right would by definition run counter to the objective stated in recital 1003 to the 2004 decision, which is to allow viable competition with Microsoft’s work group server operating system, since Microsoft would be in a position to charge all potential competitors prohibitive rates of remuneration. As is stated in recitals 106 and 107 to the contested decision, such rates thus could not be regarded as reasonable for the purposes of recital 1008(ii) and Article 5(a) of the 2004 decision.
143. Furthermore, as has been stated in recital 118 to the contested decision, application of the WSPP pricing principles (see paragraph 31 above), and in particular the criterion that the technologies concerned be innovative, gives an indication of whether Microsoft’s remuneration rates reflect the intrinsic value of a technology rather than its strategic value. The intrinsic value of products such as those at issue in fact lies in their innovative character. By contrast, the fact that those technologies were trade secrets by virtue of Microsoft’s policy is not an indicator of any value other than strategic value.
144. Moreover, whilst all strategic value of the technologies in question, as described in paragraph 142 above and in recitals 105 and 107 to the contested decision (see paragraphs 29 and 30 above), must be excluded, a market valuation of comparable technologies, as described in paragraphs 134 and 135 above, is also required, since it is necessary to rule out the possibility that commercial practice is to offer such technologies at substantially lower rates than those charged by Microsoft, or even free of charge. Such is the type of approach by which it is possible to assess the value which the interoperability information would have in the absence of any dominant operator, as claimed by ACT. On the other hand, in the absence of innovation, secrecy by itself represents only strategic value for a licensee, while fixed development costs are not, as PricewaterhouseCoopers (the expert appointed by Microsoft) itself states in a report of 24 August 2006, a correct basis for valuing intellectual property.
145. Accordingly, application of the WSPP pricing principles responds, in an objective way and regardless of any agreement between Microsoft and its potential licensees, to the need to assess whether Microsoft’s remuneration rates are reasonable for the purpose of recital 1008(ii) and Article 5(a) of the 2004 decision.
146. Microsoft’s argument that the WSPP pricing principles may be used only by the parties to a possible licence, the monitoring trustee and the High Court of Justice, and not by the Commission, cannot be accepted. Nothing prevents the Commission from applying the principles in question if they are appropriate for the purpose of implementing Article 5(a) of the 2004 decision.
147. However, that finding does not necessarily mean that those principles have been correctly applied, and indeed Microsoft also challenges the manner of their application. In that regard, it should be pointed out that Microsoft does not take issue with the Commission’s assessment of the innovative character of any of the 166 technologies held not to be innovative but challenges the definition of the tests used to consider generally whether there was innovation.
148. In that regard, the Court observes at the outset that, as is clear from recital 138 to the contested decision, the Commission, in order to ascertain whether the technologies at issue were innovative, used the notions of novelty and non-obviousness ‘as settled concepts in the area of intellectual property’. That reference shows that the Commission attributed to ‘novelty’ and ‘non-obviousness’ the meaning that they have in the field of intellectual property.
149. It should be observed, in that context, that, according to recital 138 to the contested decision, the Commission defined as novel a technology that did not form part of the state of the art and as non-obvious a technology which is not obvious to a person skilled in the art. Those definitions correspond to the definitions of ‘novelty’ and ‘inventive step’ in Article 54 and Article 56 respectively of the Convention on the Grant of European Patents of 5 October 1973, as amended. Since the legitimacy of the Commission’s approach of assessing the innovative character of Microsoft’s technologies has been accepted (see paragraphs 133 to 146 above), it cannot be denied that the Commission is entitled to assess their innovative character by reference to its constituent elements, namely novelty and non-obviousness, the latter belonging to the notion of ‘inventive step’. It should be added, in that regard, that in a letter dated 4 May 2006, Microsoft affirms that innovation is to be assessed by reference to the standards of novelty and inventive step, even though it takes the view that the innovation test should not supplant the law of trade secrets. In a letter of 31 July 2006 (see paragraph 47 above), Microsoft also recognised that the standard of innovation as a ‘filter for strategic value’ has the meaning attributed to it under patent law and submitted its reports on innovation with that meaning in mind.
150. Contrary to what has been argued by Microsoft, the effect, in the context of this case, of assessing the innovative character of the technologies covered by the contested decision 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 in general. In fact, as is clear from the foregoing considerations, the objective of such an assessment is to enable Article 5(a) of the 2004 decision to be enforced; that provision — read in the light of recitals 1003 and 1008(ii) to the 2004 decision — precludes, in the light of the specific abuse found, any remuneration charged by Microsoft from reflecting the strategic value of the technologies at issue. That objective is expressly stated in the WSPP pricing principles drawn up following negotiations between the Commission and Microsoft (see paragraphs 25, 31 and 87 above).
151. As Microsoft has not in any event put forward a more appropriate definition of the concepts of novelty and non-obviousness, which would also be capable of ensuring any strategic value of those technologies is excluded, it must be concluded that its arguments do not reveal any error affecting the legality of the contested decision in so far as the Commission stated that it had used the concepts of novelty and non-obviousness.
152. It should be added that although, in its application of the Convention on the Grant of European Patents, the EPO Enlarged Board of Appeal takes the view that assessment of non-obviousness is to be undertaken solely in relation to claims entailing computer-implemented programs having technical character (see, to that effect, Opinion G 3/08, OJ EPO 2011, 1, point 10.13 of the reasons), Microsoft has not argued that, in a context other than that of a patent grant, the non-obviousness of the technologies at issue cannot be assessed without a prior examination of their technical character. What is more, from a legal point of view, the examination of the technical character of claims entailing computer-implemented programs is a step specific to the procedure for granting a patent, given that computer programs ‘as such’ are not patentable (see, for example, Article 52(2) and (3) of the Convention on the Grant of European Patents).
153. Nor can Microsoft succeed in its arguments that the Commission applied the criteria of novelty and inventive step in an overly restrictive way and, consequently, in a manner contrary even to patent law, so that only ‘truly pioneering’ technologies ‘totally different from prior art’ may be regarded as innovative and the existence of prior art references relating to broadly similar concepts to those implemented by Microsoft entails the obviousness of the technologies covered by the contested decision (see paragraph 126 above). In fact, apart from general assertions, Microsoft has not advanced any argument which challenges the concrete findings made in respect of the innovative character of the technologies concerned and allows the Court to determine whether this contention is well founded.
154. Furthermore, given that all the technologies that Microsoft presented as innovative were examined one by one and that the Commission assessed the innovative character of each of them, Microsoft is not justified in claiming that the Commission rejected their innovative character en bloc because of an allegedly incorrect application of the novelty and inventive step tests.
155. The same is true of the assessment of the allegedly innovative combinations of technologies, each of which taken separately would not entail an inventive step. In that regard, according to recitals 146 to 156 to the contested decision, the combinations of technologies which Microsoft put forward were indeed examined as such and were found not to be innovative. That is confirmed by pages 1, 5, 8, 13, 21, 22, 29, 31, 34, 39, 61, 64 and 68 of the table annexed to the contested decision, from which it is apparent that the Commission examined the innovative character of 19 combinations of technologies one by one. According to the explanations on those pages of the table, read in conjunction with pages 4, 8, 14, 15, 16, 17, 18, 19, 28, 29, 39, 40, 41, 43, 58, 66, 70, 111, 120 and 129 of the monitoring trustee’s report of 8 July 2007 and pages 7, 73 and 78 of the trustee’s report of 3 March 2007 (see paragraph 52 above), for 18 of the 19 technology combinations in question, Microsoft did not produce, during the administrative proceedings, any details, evidence or justification supporting a conclusion that they were innovative. Moreover, it is also noted in those reports that there was prior art for the technologies forming the combinations in question. In those circumstances, it was for Microsoft to point out the specific reasons why a combination of non-innovative technologies was to be regarded as innovative, since the monitoring trustee and the Commission could not be required to speculate on the reasons underpinning Microsoft’s claim that there was innovation.
156. Furthermore, as can be seen from page 7 of the table annexed to the contested decision, the Commission confirmed the finding of the monitoring trustee set out on page 32 of his report of 8 July 2007 acknowledging the innovative character of the ‘Referral Management’ technology consisting in a new combination of different metrics within a complex algorithm.
157. In its action, Microsoft does not develop any argument to show that the Commission’s assessments of the innovative character of any of those combinations of technologies, which are based on the reports of the monitoring trustee, are vitiated by specific errors. In those circumstances, as has been stated in paragraph 153 above, general allegations that the Commission’s approach was ‘granular’ must be rejected in the absence of concrete examples substantiating those allegations.
158. With regard to the arguments put forward by Microsoft in its reply to a written question from the Court, according to which it stated during the administrative proceedings that the innovative character of technologies in the ‘File Replication Service’ and ‘Directory Replication Service’ protocols was to be assessed at ‘protocol level’, it is to be noted that — as is clear from pages 13, 21 and 22 of the table annexed to the contested decision — the Commission examined the innovative character of seven combinations of technologies within those protocols. Microsoft’s arguments do not explain in what way that examination did not address its innovation claims or specifically why a different examination was called for.
159. Therefore, contrary to what Microsoft has argued (see paragraph 130 above), the Commission did not make any ‘fundamental error’ which, irrespective of specific instances of assessments supposedly affected by such an error, invalidated its entire analysis.
160. Nor can the Court accept Microsoft’s argument that the fact that the Commission did not object to remuneration being charged for the licences granted under agreements other than the No Patent agreement means that there was innovation at a less ‘granular’ level, since the technical documentation is identical under all the WSPP agreements. In fact, it is apparent from recitals 132 and 162 to 164 to the contested decision that the Commission accepted that Microsoft was entitled to more than token remuneration for agreements other than the No Patent agreement, since the agreements in question resulted in the grant of licences concerning patents reading on technology forming part of the technical documentation, that being without prejudice to the validity of the patents in question. As has been noted in paragraph 121 above, the concept of ‘Microsoft licensed intellectual property’ includes, under the No Patent agreement, know-how, industrial secrets, trade secrets, confidential information and copyright with the explicit exclusion of any rights covered by a patent or a patent application.
161. It follows from the foregoing findings that Microsoft has not succeeded in calling into question the Commission’s conclusions concerning the lack of innovative character of the technologies and combinations of technologies. Moreover, the general reference to documents submitted during the administrative proceedings, which are said to reveal the Commission’s errors in that regard (see paragraph 128 above), is manifestly not sufficient for that purpose.
162. As regards Microsoft’s claim that the statement of reasons concerning the assessment of the innovative character of the technologies in question was inadequate (see paragraph 129 above), it is apparent from the case-law cited in paragraph 99 above that the Commission is obliged to explain clearly and intelligibly the reasons why it is of the view that each technology is or is not innovative. That requirement does not mean that the Commission has to set out — in addition to the matters on which its finding is based — the reasons why evidence or arguments put forward during the administrative proceedings do not undermine its conclusion. The question whether the Commission’s conclusions should, in the light of that evidence or those arguments, be held invalid falls to be considered in the examination of the merits of the contested decision, Microsoft being free to raise the evidence or arguments before the Court and to seek annulment of the contested decision on that basis.
163. As to Microsoft’s argument that the Commission and the monitoring trustee considered whether the technologies were innovative by reference to the state of the art in 2007 rather than to the time when it would have applied for a patent (see paragraph 129 above), it lacks any factual basis. Indeed, according to footnote 149 to the contested decision, both the Commission and the monitoring trustee took account of the date claimed by Microsoft. Microsoft puts forward nothing that might call that finding into question and does not cite any concrete cases in which the reference to the state of the art is later than the date claimed each time by Microsoft.
164. Accordingly, the third plea must be rejected.
Fourth plea: unlawful reliance on the monitoring trustee’s reports
Arguments of the parties
165. According to Microsoft, the annulment of Article 7 of the 2004 decision by the judgment in Microsoft
v Commission, paragraph 18 above, renders unlawful all the actions that the monitoring trustee has taken, such as requesting and receiving documents and other materials directly from Microsoft and preparing reports based on those documents and materials. In the present case, the Commission based the contested decision entirely on the reports drawn up by the monitoring trustee, who obtained evidence under an illegal delegation of powers. The Commission thus failed to take all the measures necessary to comply with the judgment in Microsoft
v Commission, paragraph 18 above.
166. Irrespective of whether the monitoring trustee made use of the powers which had been unlawfully delegated to him, the decision of 28 July 2005 (see paragraph 14 above) is without question based on the delegation censured by the Court, so that the Commission was not entitled to base the contested decision on those reports.
167. In those circumstances, the questions whether Microsoft was required to accede to the monitoring trustee’s requests and whether the Commission lawfully obtained access to the information at issue through the monitoring trustee or through Microsoft are irrelevant, since the monitoring trustee acted within the framework of the powers delegated to him by the Commission.
168. Finally, since, as is also apparent from the annex to the contested decision, TAEUS did not carry out the same tasks as the monitoring trustee, its intervention is irrelevant in this context.
169. The Commission and the interveners supporting it dispute the merits of this plea.
Findings of the Court
170. It must be borne in mind that Article 7 of the 2004 decision was annulled in so far as it orders Microsoft to submit a proposal for the establishment of a mechanism which is to include a monitoring trustee with the power to have access, independently of the Commission, to Microsoft’s assistance, information, documents, premises and employees and to the source code of the relevant Microsoft products (see paragraph 18 above).
171. Furthermore, it follows from paragraphs 1268 and 1271 of the judgment in Microsoft
v Commission, paragraph 18 above, that the rights conferred on the monitoring trustee, described in paragraph 170 above, go well beyond the situation in which the Commission retains its own expert, as Article 7 of the 2004 decision confers on the trustee powers which the Commission alone could exercise.
172. Contrary to what Microsoft has argued, it is irrelevant that recital 33 and Article 3.2 of the decision of 28 July 2005 (see paragraph 14 above) are based on the powers of the monitoring trustee in question, since, at the very most, that circumstance would affect the legality of that decision, which was addressed to Microsoft and against which Microsoft has not brought an action.
173. With regard to the question whether the monitoring trustee sent any requests to Microsoft under Article 3.2 of the decision of 28 July 2005, the Commission states that the trustee did not use that power; nor did he use the source code obtained from Microsoft when drawing up his reports. The Commission adds that all communications between Microsoft and the trustee were on a voluntary basis in accordance with Article 4.1 of the decision of 28 July 2005.
174. In that regard, it is to be noted that, under Article 3.2 of the decision of 28 July 2005, the monitoring trustee may, inter alia, request information from Microsoft. Moreover, pursuant to Article 4.1 of that decision, Microsoft is free to comply with requests made by the trustee, while the Commission reserves the right to exercise its powers under Regulation No 1/2003 should Microsoft fail to comply voluntarily.
175. Thus, Article 3.2 of the decision of 28 July 2005, read in conjunction with Article 4.1 thereof, is not affected by the partial annulment of Article 7 of the 2004 decision under the first indent of point 1 of the operative part of the judgment in Microsoft
v Commission, paragraph 18 above, since those provisions only afford the monitoring trustee the opportunity to enter into direct contact with Microsoft in order to carry out his task but do not confer on him the power to adopt a coercive measure, action of that type being expressly reserved to the Commission.
176. Furthermore, it is not disputed that, in the present case, the information obtained from Microsoft was used by the monitoring trustee for the purpose of drawing up reports on the basis of which the Commission made the assessments in the contested decision.
177. It should be added, moreover, that the Commission employed the only method that allowed the situation to be regularised in accordance with the judgment in Microsoft
v Commission, paragraph 18 above, under Article 233 EC, that is to say, it requested Microsoft, under Article 18(2) of Regulation No 1/2003, to provide the Commission with all the documents and other information to which the monitoring trustee had had access directly from Microsoft.
178. The fourth plea must therefore be rejected.
Fifth plea: infringement of the rights of the defence
Arguments of the parties
179. Microsoft claims that, because the statement of objections was sent on 1 March 2007, that is to say, seven months before the end of the period taken into account by the Commission for determining non-compliance with Article 5 of the 2004 decision (22 October 2007), Microsoft was prevented from expressing its views on all the matters raised against it. Both the statement of objections and the letter of facts contained only preliminary assessments under Article 5(d) of the 2004 decision and did not afford Microsoft the opportunity to comment on all the issues forming the basis of the imposition of the periodic penalty payment, the purpose of which is different from that of a fine. Accordingly, Microsoft was unable to comment on the limitation of the subject-matter of the contested decision, which focused on compliance with only Article 5(a) of the 2004 decision from the perspective of the No Patent agreement alone and which shows that the Commission acknowledged the innovative character of three additional technologies as compared with the view expressed in the statement of objections. These factors are crucial in the light of Article 24(2) of Regulation No 1/2003. Furthermore, Microsoft did not have the opportunity to make representations that its compliance with the obligations imposed by the 2005 decision should have led to a significant reduction in the amount of the periodic penalty payment, or to comment on the length of the period on which the Commission relied. Finally, Microsoft was denied the opportunity to point out certain factual errors made by the Commission, such as calculating the periodic penalty payment up to 22 October 2007, whilst Microsoft had submitted a proposal considered to be reasonable on 9 October 2007.
180. In this way, the Commission also undermined the role of the Advisory Committee on Restrictive Practices and Dominant Positions, which it is supposed to consult, pursuant to Article 14 of Regulation No 1/2003.
181. The Commission disputes the merits of this plea.
Findings of the Court
182. According to the case-law, 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. 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 (see Case T-15/02 BASF
v Commission
[2006] ECR II-497, paragraph 46 and the case-law cited).
183. 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 (see BASF
v Commission, paragraph 182 above, paragraph 47 and the case-law cited).
184. 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 (Joined Cases T-191/98, T-212/98 to T-214/98 Atlantic Container Line and Others
v Commission
[2003] ECR II-3275, paragraphs 114 and 115).
185. With regard to exercise of the rights of the defence in respect of the imposition of fines, it is settled case-law that, 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 ( BASF
v Commission, paragraph 182 above, paragraph 48 and the case-law cited).
186. 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 (see, to that effect, Joined Cases T-25/95, T-26/95, T-30/95 to T-32/95, T-34/95 to T-39/95, T-42/95 to T-46/95, T-48/95, T-50/95 to T-65/95, T-68/95 to T-71/95, T-87/95, T-88/95, T-103/95 and T-104/95 Cimenteries CBR and Others v Commission [2000] ECR II-491, paragraphs 575 and 576).
187. For the reasons set out in paragraph 94 above, the foregoing considerations are fully applicable in the context of periodic penalty payments imposed under Article 24 of Regulation No 1/2003. Furthermore, contrary to what has been argued by Microsoft, the statement of objections and the letter of facts are communications under Article 27(1) of Regulation No 1/2003 and not preliminary assessments under Article 5(d) of the 2004 decision (see paragraph 9 above).
188. In the present case, it is clear from points 267 and 276 of the statement of objections that the Commission took the view that, as at 1 March 2007, Microsoft’s conduct did not comply with the obligations imposed by Article 5(a) of the 2004 decision and that it was proposing to fix the definitive amount of the periodic penalty payment in respect of the period between 16 December 2005 and the date of adoption of the final decision.
189. It is also apparent from the third paragraph of the letter of facts and from point 54 of Annex I thereto that the Commission considered that its objections held good in relation to the remuneration scheme submitted on 21 May 2007 (see paragraphs 24 and 33 above).
190. The Court therefore finds that, since the conduct alleged against Microsoft under the contested decision is not different from the conduct described in the statement of objections and the letter of facts, Microsoft’s rights of defence have not been infringed in that regard.
191. As regards the fact that the Commission limited the scope of its investigation to the No Patent agreement and accepted, after the statement of objections, that seven technologies were innovative, suffice it to observe that communication to the parties concerned of further objections is necessary only where the result of the investigations leads the Commission to take new facts into account against the undertakings or to alter materially the evidence for the contested infringements and not where the Commission fulfils its obligation to abandon such objections as have, in the light of the replies to the statement of objections, been shown to be unfounded (see, to that effect, Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P Aalborg Portland and Others  v Commission
[2004] ECR I-123, paragraphs 67 and 192).
192. As regards the factual error which Microsoft claims it did not have the opportunity to point out to the Commission (see paragraph 179 in fine above), the Court finds that that error never materialised. Since Microsoft was obliged to propose reasonable rates of remuneration to its potential licensees (see paragraph 114 above), the infringement was brought to an end only when such rates were actually offered, as merely forwarding remuneration rates to the Commission for an assessment of their reasonableness did not fulfil the obligations in Article 5(a) of the 2004 decision.
193. Finally, it is clear from a letter dated 15 November 2007 that the Advisory Committee on Restrictive Practices and Dominant Positions was provided with the statement of objections, the letter of facts and Microsoft’s responses to those documents; it was therefore informed of the facts alleged against Microsoft.
194. The fifth plea must therefore be rejected.
Sixth plea: no legal basis for the imposition of a periodic penalty payment and the amount thereof is excessive and disproportionate
Arguments of the parties
195. Microsoft maintains, first, that the Commission was not entitled to impose a fine on it without having first defined precisely the conduct which Microsoft had to adopt in order to comply with the 2004 decision. Furthermore, Microsoft could not be required to comply with Article 5(a) of that decision before the procedure described in Article 5(d) had ended.
196. Second, in the contested decision the Commission’s complaint regarding Microsoft’s failure to comply concerned only the remuneration rates relating to the No Patent agreement which were proposed as starting points for negotiation. However, it is nonsensical to give priority to one WSPP agreement, when they were all regarded as covering information indispensable for Microsoft’s competitors.
197. Third, it is apparent from the 2006 decision that the Commission apportioned 75% of the maximum periodic penalty payment to Microsoft’s obligation to submit an accurate and complete version of the interoperability information and 25% to the obligation to propose reasonable and non-discriminatory remuneration rates. However, by imposing in the present case approximately 60% of the maximum periodic penalty payment for infringement of the first part of the second of the aforementioned obligations, the Commission inexplicably departed from its original weighting and thus infringed the principle of the protection of legitimate expectations. Furthermore, the Commission di d not explain the methodology for calculating the daily penalty or the principles according to which it calculated reductions; therefore the contested decision is vitiated by a failure to state reasons in that regard. It is also apparent that, in actual fact, the Commission did not apply a consistent weighting of the various forms of non-compliance according to their importance.
198. Fourth, Microsoft points out that, of the 488 days covered by the periodic penalty payment, 306 were devoted to the Commission’s assessment of Microsoft’s proposals, which casts doubt on its opinion that the measures which Microsoft had to take were obvious and shows that the periodic penalty payment imposed was unfair.
199. Fifth, supported by ACT, Microsoft reiterates that, in view of the Commission’s refusal to assist it substantially by indicating the appropriate level of the remuneration rates, it adopted all the measures available to it in order to comply with the 2004 decision.
200. Sixth, the periodic penalty payment is 40 times as much as the remuneration which Microsoft would have collected if all its competitors had concluded No Patent agreements at rates considered unreasonable by the Commission, and it far exceeds all the fines recently imposed for infringement of the competition rules.
201. Seventh, the Commission failed to take into account the fact that Microsoft finally complied with the 2004 decision and, on that ground, to reduce the amount of the periodic penalty payment, in accordance with Article 24(2) of Regulation No 1/2003.
202. Finally, eighth, Microsoft reiterates that the period of non-compliance ended on 9 October 2007 (see paragraph 179 above).
203. The Commission states that, for the 488 days covered by the contested decision, the periodic penalty payment could have amounted to EUR 1.423 billion. Given, first, that the scheme adopted by Microsoft on 22 October 2007 did not give rise to objections as to the reasonableness of the remuneration rates which it contains, second, that Microsoft applied substantially lower rates as of 21 May 2007 and, third, that the contested decision concerns only the No Patent agreement, the periodic penalty payment imposed amounted to approximately 63% of the maximum periodic penalty payment. However, the reduction also covers the period before 21 May 2007, but does not have to spread over the entire period concerned. The periodic penalty payment is calculated at EUR 2 million per day for the period between 21 June 2006 and 20 May 2007 and at EUR 1.5 million per day for the period between 21 May 2007 and 21 October 2007. According to settled case-law, Article 253 EC does not require the figures relating to the method of calculating a fine to be indicated in the Commission’s decision and the same rule applies in the case of periodic penalty payments. In those circumstances, recitals 281 to 299 to the contested decision provide adequate reasoning in that regard.
204. The Commission and the interveners supporting it contend that the rest of Microsoft’s arguments are unfounded.
Findings of the Court
205. The first of Microsoft’s arguments described in paragraph 195 above is indistinguishable from the first plea and must therefore be rejected for the reasons set out in paragraphs 82 to 97 above. With regard to Microsoft’s argument that it could not be required to comply with Article 5(a) of the 2004 decision before the procedure described in Article 5(d) of the decision had ended, suffice it to observe that that approach would give Microsoft a right of veto over enforcement of the 2004 decision. Indeed, it would be sufficient for Microsoft not to abide by its — clearly distinct — obligation under Article 5(d) of the 2004 decision for the provisions of Article 5(a) to be rendered unenforceable.
206. As to Microsoft’s arguments concerning the exercise of the Court’s unlimited jurisdiction, the Court finds as follows.
207. With regard to Microsoft’s argument set out in paragraph 196 above, the Court finds that the Commission took due account of the restriction of the scope of its investigation by fixing the amount of the periodic penalty payment at a markedly lower level than that laid down by the 2006 decision (see paragraph 203 above).
208. Moreover, as the Commission and SIIA have pointed out, given the importance of the No Patent agreement in cases where Microsoft’s potential licensees had no interest in obtaining patent licences, nothing prevents the definitive amount of the periodic penalty payment from being set at the level imposed under the contested decision.
209. In that regard and although Microsoft does not lay particular emphasis on this argument to support its application for a reduction in the amount of the periodic penalty payment, the Court rejects the claim that the Commission did not call into question Microsoft’s ability to offer the No Patent agreement solely to persons who already had a licence for certain patented technologies.
210. More specifically, as can be seen from points 28, 29 and 38 to 41 of a letter from the Commission dated 17 March 2005, the Commission indicated to Microsoft that a number of potential beneficiaries of the 2004 decision did not believe that they needed licences of Microsoft’s patented technologies in order to develop work group server operating systems compatible with Microsoft’s client PC operating system. The Commission thus rejected Microsoft’s proposal for an all-in-one licence offering both patented and non-patented technologies, since there was no objective justification for tying of that kind and since Microsoft was at all times able to bring proceedings before the competent national courts against licensees of non-patented technologies in the event of them implementing those technologies in such a way as to infringe Microsoft’s patents, for which they had not obtained a licence.
211. In the same context, by letter of 18 April 2005, the Commission put to Microsoft, inter alia, a draft No Patent agreement available without prior licensing of the patented technologies, with the express reservation of Microsoft’s rights under its patents as referred to above. Furthermore, in response to a letter from Microsoft dated 2 May 2005, the Commission again explained, by letter of 28 June 2005, that, in order to avoid ‘forced licensing’ of patented technologies of no interest to Microsoft’s competitors, Microsoft should make available an agreement covering non-patented technologies, without prejudice to Microsoft’s patent rights. In those circumstances, it would be for the persons concerned to choose the non-patented or patented technologies that they deemed necessary to develop their products. Thus, in that letter, the Commission rejected the version of Section 2.4(b) of the No Patent agreement of 7 June 2005 proposed by Microsoft, which provided that the said agreement would be available only to persons having a licence concerning patent claims ‘necessarily infringed’ by implementation of non-patented technologies forming part of the interoperability information.
212. By letter of 8 July 2005, Microsoft proposed, inter alia, that a sentence should be inserted into the No Patent agreement explaining that where there were no ‘necessary claims’ in any of the non-patented elements that the licensee wished to licence, the licensee would not be required to have taken a licence in respect of the patented elements. In the same letter, Microsoft stated that it hoped that that clarification would satisfactorily address the issue raised by the Commission.
213. By letter of 13 July 2005, the Commission replied to Microsoft that it welcomed the clarification, particularly in the light ‘of [Section] 11.4(a), which makes clear that, in case the Licensee contests the Necessary Claims, Microsoft cannot on this ground terminate the licence’.
214. Finally, as is shown by the minutes of a meeting that took place on 31 January and 1 February 2007 in London, it became apparent that at the meeting Microsoft was interpreting the clarification referred to in paragraph 212 above as meaning that, in the event of disagreement between it and a potential No Patent licensee on the existence of ‘necessary claims’, the licensee was still under an obligation to license the patents relating to those claims. In that regard, it can be seen from a letter from Microsoft dated 12 February 2007 that attention was drawn to that point by IBM in a document entitled ‘Comments’ dated 28 January 2007 and that Microsoft henceforth abandoned that interpretation.
215. The correspondence and minutes summarised in paragraphs 210 to 214 above show that, from the start, the Commission made it clear to Microsoft that the tying of licences for non-patented and patented technologies was contrary to Microsoft’s obligations under Article 5 of the 2004 decision in the absence of any objective justification for such tying. The Commission also made clear that, if a potential licensee did not believe that it was necessary to have a licence over Microsoft’s patented technologies in order to develop products that would interoperate with Microsoft’s client PC operating systems, that licensee had to be free not to take such a licence and run the risk of proceedings being taken against it before the national courts if it infringed those patents. In those circumstances, the agreement given by the Commission following Microsoft’s clarification (see paragraphs 212 and 213 above) expressed only the Commission’s interpretation, namely that the clarification in question allowed potential licensees the right to choose the elements in respect of which they wished to take a licence, while a refusal on their part to take a licence for the patented elements did not mean that Microsoft could refuse to grant a licence for the non-patented elements. Thus, the re-emergence of the issue in January 2007 is merely the consequence of Microsoft continuing to interpret its clarification in a way contrary to that intended by the Commission and potential licensees and not the consequence of any alleged agreement given by the Commission on 13 July 2005.
216. Furthermore, the Court cannot accept the justification advanced by Microsoft in its correspondence with the Commission, according to which the licensing of ‘necessary claims’ as a condition for the availability of a No Patent agreement would protect licensees from any actions brought by Microsoft before the national courts. Indeed, irrespective of the fact that licensees are in a better position than Microsoft to make the most appropriate choices for protecting their interests, it is for licensees to assume the risks related to their assessment of what are necessary patent claims in the context of the development of products that are interoperable with Microsoft products. As it is, the Commission clearly stated from the start that the grant of licences under the No Patent agreement was without prejudice to Microsoft’s patent rights under its patents (see paragraphs 210 and 211 above).
217. As regards Microsoft’s argument described in paragraph 197 above, suffice it to observe that, assuming that the Commission did in this case depart from the weighting that it used in the 2006 decision, nothing requires it to adhere to that weighting in all subsequent decisions. Indeed, if, at the start, Microsoft did not even make available a complete and accurate version of the interoperability information, it was, at that stage, quite logical to impose a periodic penalty payment that took account, in particular, of that aspect of the conduct rather than of the issue of the reasonable terms on which that information would be made available. So far as the method for calculating the periodic penalty payment is concerned, the Court’s exercise of its unlimited jurisdiction 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, to that effect, Case C-248/98 P KNP BT
v Commission
[2000] ECR I-9641, paragraph 40). Since the amount of the periodic penalty payment definitively set was less than the maximum amount laid down by the 2006 decision and since the information set out in paragraph 203 makes clear how that amount was calculated, Microsoft’s argument cannot succeed.
218. Furthermore, even though the reasons that led the Commission to fix the definitive amount of the periodic penalty payment for the period from 1 August 2006 to 20 May 2007 at a level equivalent to two thirds of the periodic penalty payment imposed by the 2006 decision are also valid for the purpose of calculating the final amount of the periodic penalty payment for the period between 21 June and 31 July 2006, it was appropriate to set for the latter period an amount of EUR 2 million, equivalent to the total of the daily penalty payment imposed by the 2005 decision. In fact, the nature of Microsoft’s behaviour was the same in both those periods, so that an identical daily penalty payment is justifiable.
219. As regards Microsoft’s argument set out in paragraph 198 above, it is sufficient to recall that, given Microsoft’s obligation to propose reasonable remuneration rates to its potential licensees (see paragraph 114 above), the fact that part of the periodic penalty payment relates to periods when Microsoft was waiting for the Commission’s assessment of new proposals it had submitted does not attenuate the effects of Microsoft’s failure to comply with the 2004 decision and thus does not amount to a mitigating circumstance. Nor — for the same reasons as those set out in paragraph 114 above — can Microsoft’s argument described in paragraph 199 above be accepted.
220. With regard to Microsoft’s arguments summarised in paragraphs 200 and 201 above, the Court notes, first, that Microsoft has not provided any evidence establishing that the periodic penalty payment imposed is 40 times as much as the remuneration that it would have collected if all its competitors had entered into No Patent agreements on the rates considered unreasonable by the Commission. Second, in any event, having regard to Microsoft’s size in terms of turnover, to its delay in providing a complete and accurate version of the interoperability information and to the further delay in it proposing a reasonable rate of remuneration, with all the benefits which those circumstances entailed in terms of market shares, the reduction in the amount of the periodic penalty payment which the Commission granted (see paragraph 203 above) duly reflects both the need for the amount of the payment to act as a deterrent and the fact that Microsoft finally complied with its obligations under Article 5(a) of the 2004 decision.
221. Furthermore, as has been stated in paragraph 192 above, the infringement was brought to an end only when reasonable rates of remuneration were actually offered, since merely forwarding remuneration rates to the Commission for an assessment of their reasonableness did not fulfil the obligations in Article 5(a) of the 2004 decision. It follows that the argument in paragraph 202 above must be rejected.
222. However, it is still necessary to take into account, in the exercise of the unlimited jurisdiction which the Court has under Article 31 of Regulation No 1/2003 and which may justify the production and taking into account of additional information which is not as such required to be set out in the decision ( KNP BT  v Commission, paragraph 217 above, paragraph 40), a letter dated 1 June 2005, sent to Microsoft by the Director General of the Directorate-General for Competition (‘DG Competition’). That letter, which was added to the Court’s file after the parties had been heard, concerns the question whether, in the context of the 2004 decision, Microsoft was entitled to prevent its competitors from distributing in source code form products that interoperated with Microsoft client PC operating systems which those competitors had developed in the meantime. In that regard, the Commission considered that Microsoft was obliged, under Article 5 of the 2004 decision, to permit distribution in source code form of software developed by competitors on the basis of Microsoft’s protocols, in so far as the Microsoft protocols implemented in such software were not innovative. However, the Commission also explained that, while Microsoft could prevent such distribution pending the delivery of judgment in Microsoft
v Commission, paragraph 18 above, it had in the meantime to take all necessary steps to ensure — should Microsoft’s action fail so far as Article 5 of the 2004 decision was concerned — immediate and full compliance with its obligation under that provision.
223. It follows that that letter was such as to lead Microsoft to believe that it could continue to restrict the distribution of products developed by its competitors on the basis of non-patented and non-inventive interoperability information until delivery of this Court’s judgment in Microsoft
v Commission, paragraph 18 above, that is to say, until 17 September 2007.
224. At the hearing the Commission explained in that regard, without being contradicted by Microsoft, that the letter in question represented, in essence, an attempt to reconcile, on the one hand, the fact that in reality it would take two to three years to develop a competing product on the basis of the interoperability information and, on the other, Microsoft’s legitimate interest in a return to the status quo ante in the event of Article 5 of the 2004 decision being annulled by this Court in Microsoft
v Commission, paragraph 18 above. Given that, according to information available at the time, the Court’s judgment would be delivered at around the end of the period necessary to develop a competing product on the basis of the interoperability information, the Commission took the view that it was in that way correctly weighing up the various interests involved in the case at the time.
225. It should be observed that the Commission’s letter of 1 June 2005 concerns an aspect of the enforcement of Article 5 of the 2004 decision, namely access to the interoperability information on non-discriminatory terms, which does not constitute the basis of the contested decision. Although the Commission referred during the administrative proceedings to the practice of excluding the ‘open source’ development model because of certain clauses included in the agreements proposed by Microsoft (see, for example, points 65 to 70 of the annex to the Commission’s letter of 17 March 2005), the contested decision is based on the unreasonable nature of the prices proposed by Microsoft in respect of the period from 21 June 2006 to 21 October 2007 (see paragraph 55 above).
226. However, if, in the light of a pending case, the Commission, taking into account the nature of the obligations imposed by Article 5 of the 2004 decision and the consequences which might flow from a possible annulment, permitted Microsoft to implement, for a period of time, a practice liable to have anti-competitive effects that the 2004 decision was intended to put a stop to, that fact may be taken into account in the determination of the periodic penalty payment.
227. Various factors must be taken into account in that determination. Firstly, despite the scope of the letter of 1 June 2005, which was confined to the distribution of products developed by Microsoft’s competitors, Microsoft in practice continued to refuse ‘open source’ developers all access to the interoperability information, which was not something that the letter recognised it could legitimately do. Indeed, following the spirit of the letter in question, Microsoft could at the very most restrict the ability of those developers to distribute their products until the Court delivered its judgment in Microsoft
v Commission, paragraph 18 above.
228. Secondly, as is mentioned in point 68 of the annex to the Commission’s letter of 17 March 2005 and as was reiterated at the hearing, ‘open source’ developers are among Microsoft’s main competitors.
229. Thirdly, Microsoft’s delay in making available a complete and accurate version of the interoperability information (see paragraph 115 above) made it a purely theoretical possibility that a rival product could be developed and distributed before delivery of the judgment in Microsoft
v Commission, paragraph 18 above, thus confirming the Commission’s appraisal set out in paragraph 224 above.
230. Fourthly, the practice applied by Microsoft in relation to the rates offered until 21 October 2007 sufficed in itself to render Article 5 of the 2004 decision ineffective with regard to ‘open source’ developers.
231. Fifthly, Microsoft has not produced anything to indicate to what extent the anti-competitive effects of the conduct censured by the contested decision would have been produced if Microsoft had acted as described in the letter of 1 June 2005 but had complied with its obligation to offer reasonable prices for non-patented and non-inventive technologies. Nothing indicates that the effects that would have thereby been produced would have been other than marginal, having regard to what has been stated in paragraphs 224 and 229 above.
232. In those circumstances, the amount of the periodic penalty payment imposed on Microsoft must be fixed at EUR 86 0 million.
Costs
233. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Under Article 87(3) of those rules, where each party succeeds on some and fails on other heads, or where the circumstances are exceptional, the Court may order that the costs be shared or that each party bear its own costs.
234. Since Microsoft has been unsuccessful in its first five pleas but a reduction in the amount of the periodic penalty payment has been granted under the sixth plea, it shall bear its own costs and pay 95% of the Commission’s costs, excluding the costs incurred by the Commission in connection with the intervention of CompTIA and ACT, and 80% of the costs incurred by FSFE and Samba Team, SIIA, ECIS, IBM, Red Hat and Oracle.
235. The Commission shall bear 5% of its own costs, excluding the costs it has incurred in connection with the intervention of CompTIA and ACT.
236. CompTIA and ACT shall each bear their own costs and those incurred by the Commission in connection with their intervention.
237. FSFE and Samba Team, SIIA, ECIS, IBM, Red Hat and Oracle shall bear 20% of their own costs.
Operative part
On those grounds,
THE GENERAL COURT (Second Chamber)
hereby:
1. Fixes the amount of the periodic penalty payment imposed on Microsoft Corp. in Article 1 of Commission Decision C(2008) 764 final of 27 February 2008 fixing the definitive amount of the periodic penalty payment imposed on Microsoft Corp. by Decision C(2005) 4420 final (Case COMP/C-3/37.792 — Microsoft) at EUR 860 million;
2. Orders Microsoft to bear its own costs and to pay 95% of the costs incurred by the European Commission, excluding the costs incurred by the Commission in connection with the intervention of The Computing Technology Industry Association, Inc. and the Association for Competitive Technology, Inc., and 80% of the costs incurred by the Free Software Foundation Europe eV and Samba Team, the Software & Information Industry Association, the European Committee for Interoperable Systems, International Business Machines Corp., Red Hat Inc. and Oracle Corp.;
3. Orders the Commission to bear 5% of its own costs, with the exception of the costs incurred in connection with the intervention of The Computing Technology Industry Association and the Association for Competitive Technology;
4. Orders The Computing Technology Industry Association and the Association for Competitive Technology each to bear their own costs including those incurred by the Commission in connection with their intervention;
5. Orders the Free Software Foundation Europe and Samba Team, the Software & Information Industry Association, the European Committee for Interoperable Systems, International Business Machines, Red Hat and Oracle to bear 20% of their own costs.