By the decision of 1 December 201028, the European Commission rejected a complaint by Omnis against Microsoft. Omnis claimed that Microsoft abused its dominant position on the market for the provision of Enterprise Resource Planning (‘ERP’) or Enterprise Application Software (‘EAS’). Omnis alleged that Microsoft concluded anti-competitive agreements with the Romanian government and made use of interposed companies to exclude Omnis from the Romanian market. Both claims were ultimately rejected by the European Commission due to the limited likelihood of establishing a violation of competition law by Microsoft.
On 23 December 2009, Omnis lodged a complaint with the Commission alleging anti-competitive behaviour on the market for the provision of ERP or EAS by Microsoft in violation of Articles 101 and 102 TFEU. In later submissions to the Commission, Omnis requested the Commission to also open an investigation under Article 106 TFEU. In particular, Omnis alleged that Microsoft had abused its dominant position by engaging in various anti-competitive practices, including the refusal to deal with Omnis, the refusal to supply information to Omnis, discriminating against Omnis and illegal tying. Secondly, Omnis claimed that Microsoft had used interposed companies with a view of foreclosing the market for the provision of ERP or EAS in general and to eliminate competition by Omnis in particular. Lastly, Omnis alleged that Microsoft entered into an illegal strategic partnership with the Romanian government which conferred an illegal monopoly to Microsoft in contravention of Articles 101 and 106 TFEU.
On 13 July 2010, the Commission informed Omnis that after careful examination of the factual and legal elements, it was of the opinion that there was no sufficient degree of interest of the EU in conducting a further investigation. On 1 December 2010, the Commission confirmed this preliminary view and rejected the complaint of Omnis due to the limited likelihood of establishing a violation of competition law by Microsoft.
The rejection decision merits further discussion as the Commission confirmed the limited procedural rights which Regulation 773/200429 confers on complainants. The Commission reminded that the right to request an oral hearing is limited to those parties to whom the Commission has addressed a statement of objections. The Commission continued by stating that Article 6(2) of Regulation 773/2004 provides the opportunity for the Commission to afford to the complainants the possibility to make their views known at the oral hearing of the parties to which a statement of objections is addressed. However, as no statement of objections was issued in the present case, Omnis’s request for an oral hearing was rejected. The Commission referred to EMC Naloo30 where the Court of First Instance ruled that the procedure commenced by the Commission to ensure the observance of competition rules does not constitute adversarial proceedings between the complainant and the undertaking that is the object of the procedure. Both undertakings are in a different procedural situation which justifies that the complainant cannot invoke the same rights to a fair hearing as those conferred to the undertaking that is the object of the procedure. However, the Commission confirmed that, after informing the complainant of its intention to reject the complaint, the complainant can, on the basis of Article 8(1) of Regulation 773/2004, demand access to those documents on which the provisional assessment of the Commission was based. This, indeed, is a procedural right enabling the complainant to make known its views in writing on the provisional assessment.
As to the substance of the case, the Commission started off by repeating that the Commission is not obliged to conduct an investigation into each complaint it receives and that it is recognised by the EU Courts that the Commission has discretion in its treatment of complaints and may refer to the interest of the EU in order to determine the degree of priority to be applied to the complaints. The Commission continued that in assessing the EU’s interest in continuing an investigation, the Commission may balance (i) the significance of the alleged infringement in view of the functioning of the internal market, (ii) the probability of establishing an infringement, and (iii) the scope of the investigation that would be required. Based on these criteria, the Commission decided to reject the complaint as the impact of the alleged conduct on the functioning of the internal market is limited, and because the likelihood of establishing an infringement of Articles 101, 102, or 106 TFEU is also limited.
In short, the Commission, referring to Oracle/Peoplesoft31 and SAP/Business Objects32, left open whether the conduct of Microsoft takes place in the market for EAS or the submarket for ERP as this will not change the assessment of the case. Based on different market reports the Commission found that Microsoft’s market share on the relevant market (ERP or EAS) was below 5%. Furthermore, the Commission noted that those market reports confirmed that there is vigorous competition on the ERP and EAS markets with about 150 to 200 companies active on the worldwide market. Finally, the Commission remarked that the high number of companies and the low market shares of those companies support the finding that the barriers to entry are low. Consequently, as Microsoft is not dominant on the relevant market, no abuse can be established.
As to allegations concerning the infringement of Articles 101 and 106 TFEU, the Commission found no information in allowing it to such findings.
First, Omnis alleged that Microsoft used its distribution partners and interposed companies to exclude Omnis from the market in Romania. Omnis, however, did not provide any information demonstrating the likely existence of any anti-competitive agreement.
Second, according to Omnis, Microsoft entered into a strategic partnership with the Romanian Government which conferred an illegal monopoly on Microsoft and which is at the same time a cartel. The Commission rejected these allegations on the basis that the information provided by Omnis only dealt with publications in the Romanian Official Journal of the procurement contracts. The Commission continued that the question whether the procurement process was lawful is not the subject matter of the decision, and emphasised that on the basis of this information, the establishment of an infringement of Articles 101 and 106 TFEU is highly unlikely.
Omnis has already filed an appeal against this rejection decision33.