In April this year, a Chinese court began hearing a case of anti-competitive practices in the software market which bears striking resemblances to the European Commission’s case against Microsoft a decade ago.
The issue in both cases is the “bundling” of software: a company with a dominant market position in respect of one software product trying to extend its dominance by requiring purchasers of the product also to have some of its other software products – a practice known as “bundling” or “tying”.
In the Microsoft case, the European Commission formally decided, in March 2004, that Microsoft had infringed the EU law prohibition on abuse of a dominant position by supplying all purchasers of its Windows operating system with its “Windows Media Player” embedded in it. Microsoft at the time had an overwhelmingly dominant position in the supply of operating systems software for personal computers, and the Commission considered that bundling Windows Media Player with the operating system was an abuse of that dominant position, enabling Microsoft to extend its dominance to the market for media players, at the expense of competitors in the media player market such as QuickTime. The European Commission ordered Microsoft to start producing a version of the Windows operating system without the Windows Media Player. The Commission’s decision was upheld by the EU General Court on appeal.
Now, in China, it is reported that the Guangdong Higher People’s Court has commenced a trial in which it is alleged that Tencent, China’s largest instant messaging software provider, has abused its dominant position through bundling practices designed to extend its dominance into the antivirus software market – by bundling its own antivirus software with its instant messaging software, and by forcing its customers to uninstal the antivirus software of its main competitor.
The outcome of the case will shed light on the approach which will be taken under China’s new Antimonopoly Law to bundling practices in the software sector.