In the case of Microsoft v Commission, the Court of First instance clarified how the exceptional circumstances, as identified in Magill and IMS, should be approached. Microsoft held over 90 per cent of the personal computer operating systems market. The personal computer operating system used by clients had to be compatible with the workgroup server operating system, in order for them to function in a network. However, Microsoft was refusing to supply its competitors with interoperability information and to authorise that information to be used in the development of work group server operating systems, that was in competition with Microsoft. As a result, other workgroup server operating systems could not remain in competition with Microsoft's one. The Court referred to the previous cases of Magill, Bronner and IMS when approaching the issue. It held that refusal to license by a dominant undertaking does not in itself constitute as an abuse of dominant position under Article 102, unless it falls within the exceptional circumstances. The Court agreed with the Commission that, the clients' computers operating with the Microsoft Operating system, had to be compatible with non-Microsoft group workgroup server operating systems, for them to stay viable on the market. This meant that the interoperability information of the Personal Computers, was necessary for the exercise of a particular activity on the secondary market of workgroup servers' operating systems, and thus indispensable for the maintenance of effective competition. Microsoft then tried to argue that the refusal would not exclude all competition from a secondary market. However, the Court clarified that, it is not necessary to show that all competition is to be eliminated. It is only necessary to show that the refusal is liable, or likely to eliminate all effective competition on the market. This was likely to occur as organisations were not keen on moving away from Microsoft's Operating System. Additionally, Microsoft tried to argue that the refusal did not prevent any new product from entering the market, for which, an unsatisfied consumer demand existed. The competitors only wanted to copy Microsoft's product. The Court noted that, this should be considered in the context of Article 102(2)(b). The provision states that a prejudice of consumers may arise, when there is limitation of technical development, and not only when there is limitation of market or production. Microsoft's refusal resulted to consumers being forced, in a way, to use Microsoft's workgroup server. Finally, Microsoft's justification that it had made significant investments for that technology and granting the licence would eliminate future incentives to invest in the development of intellectual property, was found unjustifiable.
