Microsoft Corp., a U.S. company, designs, develops, and markets software products, including operating systems for client personal computers (client PCs), operating systems for work group servers, and streaming media players. Sun Microsystems, Inc., another U.S. company, lodged a complaint with the European Commission alleging that Microsoft had refused to give Sun the information necessary to allow Sun’s work group server operating systems to interoperate with the Windows client PC operating system. In 2000, the Commission launched an investigation of Microsoft’s Windows 2000 generation of client PC and work group server operating systems and Microsoft’s integration of its Windows Media Player into the PC operating system. In March 2004, the Commission entered a decision finding Microsoft guilty of two abuses of dominant market position, violating Articles 82 and 54. The Commission ordered Microsoft to (1) make its operating system more accessible to competitors, (2) offer client PC systems that did not bundle the Windows Media Player, and (3) set up and pay for an independent monitoring trustee to ensure Microsoft did not violate the order. Microsoft was ruled to have had a dominant position in the client PC operating systems market and in the work group server operating systems market. In the PC operating system market, this was because the Commission found that Microsoft’s market share was consistently over 90 percent, there were significant barriers to market entry because users like platforms on which they can use a large number of applications, and software designers write applications for the most popular client PC operating systems. In the work group server operating systems market, this was because Microsoft’s market share was at least 60 percent, no other competitor in the work group market had a share greater than 25 percent, and there were close commercial and technological links between the PC and work group markets. The Commission found that, in light of Microsoft’s dominant position, it was abusive for Microsoft to (1) refuse to share interoperability information and (2) make the availability of the Windows client PC operating system conditional on the simultaneous acquisition of the Windows Media Player software. The Commission thus imposed a fine and a number of remedies on Microsoft. Microsoft appealed the decision to the Court of First Instance. Because of its importance, the matter was ultimately referred to the Grand Chamber of that Court. PRESIDENT VESTERDORF AND JUDGES JAEGER, PIRRUNG, GARCÍA-VALDECASAS, TIILI, AZIZI, COOKE, MEIJ, FORWOOD, MARTINS RIBEIRO, WISZNIEWSKABIALECKA, VADAPALAS AND I. LABUCKA THE CRITERIA ON WHICH AN UNDERTAKING IN A DOMINANT POSITION MAY BE COMPELLED TO GRANT A LICENCE, AS DEFINED BY THE COMMUNITY JUDICATURE, ARE NOT SATISFIED IN THE PRESENT CASE It follows from [the facts presented to the Court] that … Windows work group networks rely on an ‘architecture’ of both client/server and server/server interconnections and interactions and that that ‘architecture’—which the Commission characterises as ‘Windows domain architecture’—ensures ‘transparent access’ to the main services provided by work group servers. Those various factors also show that … those interconnections and interactions are closely Required: 1. Would Microsoft have been ordered to provide the interconnection instructions if it had controlled only a 40 percent market share in operating systems? 2. If Apple were to obtain a larger market share in the future, would there be a basis for relieving Microsoft from this judgment? 3. This order prohibits Microsoft from giving a program away when the computer is purchased. Why?
> During a time of political controversy in the United States over immigration policy and enforcement, the State of Arizona enacted a statute to deal with the large number of unlawful aliens in the state. Section 3 made it a misdemeanor under Arizona law f
> Star-Kist Foods, a U.S. producer of canned tuna, instituted a lawsuit to protest the assessment of duties made by the collector of customs on imported canned tuna. Duty was assessed on the canned tuna at the rate of 12.5 percent pursuant to a trade agree
> This action was brought by a U.S. senator against the president to enjoin him from returning the Hungarian coronation regalia to the People’s Republic of Hungary. The Holy Crown of St. Stephen had been held by the Hungarian people as a treasured symbol o
> In the early 1950s, the United States was at war in Korea as part of a United Nations “police action.” American steelworkers were threatening to strike over wages and collective bargaining disagreements with steel companies. The president made every atte
> Westinghouse contracted with Panalpina, a freight forwarder, to arrange for the transportation of an electric transformer from Italy to Iowa. Panalpina stated to Westinghouse, “[R]est assured your shipment will receive door to door our close care and sup
> In 1988, Semetex entered into an agreement with the Al-Mansour Factory in Baghdad, Iraq, an enterprise owned and operated by the government of Iraq, in which Semetex agreed to provide Al-Mansour with an “ion implanter” used to mark circuitry pathways on
> The plaintiff contracted to purchase hog bristles from Transea Traders in India. The defendant bank issued an irrevocable letter of credit to Transea covering a shipment of hog bristles and payable upon presentation of the proper documents. Transea fille
> The defendant bank issued an irrevocable letter of credit on behalf of its customer, Adastra Knitting Mills. It promised to honor sixty-day time drafts of Courtaulds for up to $135,000 covering shipments of “100% Acrylic Yarn.” Courtaulds presented its d
> There are many U.S. government programs to aid American firms in boosting exports. The International Trade Administration and its U.S. Commercial Service, as well as the Small Business Administration administer several of these programs. Undertake an Int
> National Park Bank issued a letter of credit addressed to Ronconi & Millar, beneficiary, at the request of its account party, Sun Herald, “covering the shipment of 1,322 tons of newsprint paper in 72½-inch and 36½-inch rolls to test 11-12, 32 lbs. at 8½
> The plaintiff, Z.K. Marine, is an importer of yachts for sale in the United States. In 1987, five yachts were shipped from Taiwan to the United States aboard the MV Archigetis. Each yacht was shipped under a clean negotiable bill of lading. Each of the f
> S.S. Sabine Howaldt, a small cargo vessel, was chartered for a voyage from Antwerp, Belgium, to Wilmington, Delaware. The ship was carrying steel products consigned to the plaintiff. The cargo was in good condition when loaded at Antwerp. On arrival at t
> Dr. Abid Hanson was traveling with his wife and family aboard an Olympic Airways flight from Athens to New York. He suffered from asthma and was affected by secondhand smoke. They were seated in a nonsmoking section, three rows from the smoking section.
> Tseng purchased a ticket on an El Al flight from New York to Tel Aviv. Prior to boarding, an El Al security guard questioned her about her travel plans. The guard considered her response “illogical” and ranked her as a security risk. Tseng was taken to a
> Kumar sold 700 television sets to one of its largest customers, Nava, in Venezuela. The contract was on CIF terms, Maracaibo. However, they agreed that Nava would not pay Kumar until Nava actually sold the merchandise. Kumar obtained the televisions from
> In May 2005, Cedar Petrochemicals, Inc., a New Yorkbased petrochemicals trader, entered into a contract with Dongbu Hannong Chemical Co., Ltd., a South Korean corporation, whereby the latter agreed to deliver a certain quantity of liquid phenol to a ship
> The plaintiff had purchased ore from Oppenheimer. The plaintiff requested that the defendant bank negotiate documents on its behalf from Oppenheimer covering a shipment of “cobalt ore analysis not less than 5 per cent peroxide.” The plaintiff specified t
> The defendant entered into a contract to sell hops to the plaintiff in London, as follows: . . . one hundred bales, equal to or better than choice brewing Pacific Coast hops of each of the crops of the years 1905 to 1912 Inclusive. The said hops to be sh
> Ample Bright Development Ltd. is a Chinese trading company that receives inquiries from overseas companies regarding handbag accessories and finds suitable Chinese factories to produce those accessories. Ample Bright received a series of purchase orders
> Successful international managers agree that success in entering a foreign market comes from planning and commitment. What does this mean? What kind of commitment do you think they are referring to? It is also often said that exporting is not an “elixir”
> Banque de Depots, a Swiss bank, brought an action against Bozel, a Brazilian exporter, seeking a money judgment because Bozel had allegedly misapplied the bank’s funds. The bank obtained an order seizing 1,300 metric tons of calcium silicon located in a
> Juliette Shulof Furs (JSF) is a New York corporation that has been in the fur-dealing business for fifteen years. George Shulof, an officer of JSF, attended two auctions conducted by Finnish Fur Sales (FFS) in Finland in 1987. He purchased more than $1.2
> Friedrich Nottebohm was born in Germany in 1881. He moved to Guatemala for business reasons in 1905 and lived there until 1943, except for business trips and visits to his brother in Liechtenstein. He remained a German citizen during that time. One month
> Plaintiff Tandrin Aviation Holdings Ltd. (Tandrin) agreed to sell a Bombardier executive jet aircraft to Aero Toy Store, L.L.C. (ATS) for U.S. $31.75 million. ATS paid a U.S. $3 million deposit to an escrow agent. Both the deposit and the balance of the
> Chicago Prime Packers, Inc., was a Colorado corporation with its principal place of business in Avon, Colorado. Northam Food Trading Company was a Canadian corporation with its principal place of business in Montreal, Quebec, Canada. Chicago Prime and No
> Solae, a U.S. limited liability company with its principal place of business in St. Louis, Missouri, had sold soy lecithin to Hershey Canada, Inc., a Canadian corporation with its primary place of business in Mississauga, Ontario (Canada), since 2003. Th
> Plaintiff It’s Intoxicating Inc. is a Pennsylvania corporation that manufactures and distributes cosmetic products to various retailers. Defendant Maritim Hotelgesellschaft is a German company which owns hotels throughout Germany. Zimmer is an individual
> Plaintiffs Bruce and Renee Fallhowe (the Fallhowes) are residents of Colorado. Hilton Worldwide, Inc. (Hilton) is a Virginia corporation that owns the Hilton Los Cabos in Cabo San Lucas, Mexico. The Fallhowes were guests at the Hilton Los Cabos in Novemb
> Plaintiffs Ayah and Rania Elayyan (the Elayyans) are residents of Indiana. Defendant Sol Melia is a Spanish corporation with its principal place of business in Palma de Mallorca, Spain. Sol Melia manages hotels under a variety of brands, all of which are
> Asahi Metal Industry, a Japanese corporation, manufactured valve assemblies in Japan and sold them to tire manufacturers including Cheng Shin (a Taiwanese corporation) from 1978 to 1982. Cheng Shin sold tires all over the world, including in California.
> Ernesto Ortiz, famed American corporate raider, initiates a hostile takeover of Bundesbank Freidumia (BF), the largest commercial bank in Freidumia. In purchasing 70 percent of BF’s shares, Ortiz pays a substantial premium for control. After he concludes
> Alberto-Culver Co., a Delaware corporation with its principal office in Illinois, manufactured toiletries and hair products in the United States and abroad. In February 1969, Alberto-Culver signed a contract in Austria to purchase three businesses of Fri
> This case illustrates a classic case of the conflict between Islamic law and modern business. In 1991, the Federal Shariah Court of Pakistan declared the payment of interest (riba) by banks on loans and deposits to be contrary to Islamic law. During the
> Campbell, an Australian citizen, was employed in the construction of health care facilities and schools in Afghanistan. The projects were funded by a U.S. government agency that extends financial and technical assistance to foreign countries to support U
> Alvarez, a Mexican physician, was wanted by the U.S. Drug Enforcement Agency for the torture and murder of one of its agents in Mexico in 1985. When Mexico would not extradite Alvarez, the agency employed Sosa to kidnap Alvarez from his home and fly him
> During the Spanish-American War, the United States Navy seized two commercial fishing ships sailing from Havana. The unarmed ships were owned by a Spanish citizen living in Cuba and sailed under Spanish flags. The owners were unaware of the hostilities b
> Japan Airlines (JAL) is a Japanese air carrier based in Tokyo, with offices in California and Hawaii. The plaintiffs were employed by a Hawaiian company that contracted to perform services for JAL flights. They alleged that JAL had required a seriously i
> The plaintiff, a U.S. citizen, entered into an employment contract with the German firm of Stumm Handel, the defendant. The contract was written entirely in German. Without being able to speak or read German, the plaintiff signed the contract. He never r
> The United States contracted with Transatlantic Financing, the operator of a cargo ship, to transport wheat from Texas to Iran in 1956. The parties never agreed on the route the ship would take. Six days after the ship left Texas, the government of Egypt
> Dayan received an exclusive franchise to operate McDonald’s restaurants in Paris, France. The franchise agreement required that the franchise meet all quality, service, and cleanliness (QSC) standards set by McDonald’s. The agreement stated that the rati
> The Kiobel suit was filed in 2002 by Nigerian citizens from the Ogoni region of Nigeria against Dutch and British holding companies that were operating in the region through their Nigerian subsidiary. The petitioners alleged that the respondents aided an
> Name four types of adjustments to regulations that are often addressed in the context of privatizations. Explain how they may be addressed.
> Wood pulp is the principal raw material used in production of paper and paperboard. In 1988, the EU member states produced only a small fraction of their requirements for wood pulp. Virtually all of the product purchased in the Union originated from prod
> The plaintiffs are domestic purchasers of “magnesite.” The plaintiffs allege, on behalf of a putative class, that the defendants—Chinese producers and exporters of magnesite—engaged in a conspiracy since at least April 2000 to fix the price of magnesite
> Nineteen states and numerous private parties brought antitrust suits against U.S. insurers, U.S. and foreign reinsurers based in London, and insurance brokers. The insurers, reinsurers, and brokers were alleged to have agreed to boycott commercial genera
> In 1931, a group of aluminum producers—one French, two German, one Swiss, one British, and one Canadian— formed a Swiss corporation named “Alliance.” Each of the producers was a shareholder of Alliance. In 1936, the shareholders instituted a system of r
> Tetra Laval, a Swedish company that is the world’s largest carton-packaging manufacturer, decided to expand into the field of plastic bottle plugs. It sought to buy the French company Sidel, which makes the equipment that blows plastic plugs into milk an
> Schneider Electric SA (Schneider), a company incorporated under French law, is the parent company of a group engaged in the manufacture and sale of products and systems in the electrical distribution, industrial control, and automation sectors. Incorpora
> A U.K.-based travel company, Airtours (now MyTravel), sought to purchase a travel agency known as First Choice. It announced its planned merger to EC authorities in early 1999. Later that year, the Merger Task Force blocked the proposed merger, asserting
> Economic development in the Republic of Costa Azul is perceived to be hindered by the ownership of all farmland by a few families and a few firms, some of which are U.S.-owned. A new government is democratically elected on a platform of land redistributi
> The Kingdom of Carolinium has a strong commitment to the preservation of wild horse herds. The neighboring Republic of Giles Run is a major dog food manufacturer and regularly uses wild horse meat in its products. These products are exported to and marke
> Briefly describe the concession model of privatization. How long should the term of the concession be?
> Despite the Montreal Protocol, the nation of Livy continues to produce CFC-emitting refrigerators and to export them to nations throughout the world. A number of governments object to Livy’s practices and ban its exports pursuant to the protocol. Livy br
> Assume that a democratically elected government, after a favorable vote in a popular referendum, launches a program to clear 150,000 acres of tropical rain forest in order to promote economic development. To carry out the will of the people, the governme
> If a U.S. company is presented with the opportunity to build a plant in a former communist country with less stringent laws on carbon dioxide emissions, what factors should it take into consideration before proceeding with the project? To what extent sho
> How would an Austrian judgment for money damages against the Czechoslovak government be enforced? What type of injunctive relief would be possible?
> In the Judgment of February 23, 1988, what would the Austrian Supreme Court have done if a private cause of action had been available in Czechoslovakia? How do you think the court would handle complaints about a nuclear accident such as Chernobyl?
> Pursuant to Bulgaria’s new joint venture program, Zasada, Inc., a U.S. firm, constructs a football helmet manufacturing facility in Sofia to produce helmets for export to the United States. Four years later, a change in the Russian Parliament leads to do
> What are the implications for an American who purchases shares in a German company on the basis of inside information?
> If a U.S. company establishes a 100 percent subsidiary in another country, what three general aspects of U.S. income tax law should the company be sure it has addressed?
> What financing alternatives would be available to a U.S. firm that was interested in investing in a proposed manufacturing plant in a small country that recently left the communist bloc and did not wish to invest many of its own resources?
> Susan Currie is a U.S. manufacturer of tear gas, which she sells to various governments for crowd control. To reduce transportation costs to the interested governments, Ms. Currie is considering building a new plant in Germany. The plant will employ 2,50
> List three reasons why giving employees equity shares in the new private entity makes sense. Give a reason that is principally applicable in Eastern Europe. What are two disadvantages associated with transferring shares to employees? What are two types o
> Would a U.S. court override an employer’s contractual rights (as the Supreme Court of Japan did) because of a countervailing “socially accepted view”? What if the employment contract was between a drug lord and his “trigger man”? Do you think that the re
> Assume the same facts as in Question 1, except that the joint venture is to build and operate a computer microcircuit manufacturing plant. What different considerations come into play in government review? What is the likely outcome?
> Keefe Energy, Inc., a U.S. firm, enters into a joint venture with Energia Guerra, S.A., a Mexican firm, to build and operate a coal-fired electric-power-generating plant with an estimated useful life of 35 years. The building and land will be owned by G/
> Plaintiff, a Swiss corporation, entered into contracts to purchase chicken from B.N.S. International Sales Corporation. Defendant was a New York corporation. The English language contracts called for the delivery of “chicken” of various weights. When the
> Pro Golf, a U.S. company, manufactured and sold golf equipment under the brand name “First Flight,” which had been registered in the United States and certain other foreign countries. Pro Golf negotiated with Wynn to act as its foreign sales representati
> International business managers try to build trust with their foreign counterparts, whether it is a customer, supplier, or partner. How would you suggest they do this? Why is trust important to the long-term relationship, and what might it mean to managi
> How does international business differ from domestic business? Explain how those differences affect the risk of doing business internationally. What factors influence that risk?
> Students often confuse the International Court of Justice with the International Criminal Court. What is the difference between them? Although not covered in this chapter, what is the European Court of Justice and what is its jurisdiction?
> Describe the five theories of international criminal jurisdiction. How have these been made applicable to international terrorism? What types of crimes are covered under the principle of universality? From an international law perspective, do you think t
> What are the different forms of criminality that are of concern to international businesses? Explain why international solutions are important. Give some examples
> Briefly describe the trade sale model of privatization. What is the distinguishing feature of the trade sale? How is privatization achieved through management contracts?
> Describe the different functions of the ITA and the ITC in regulating import competition. Why do you think that Congress split their respective functions into two separate agencies?
> Discuss the social responsibility of a Canadian or U.S. manager working in Mexico. If a certain course of action is illegal in the manager’s own country but lawful and accepted in Mexico, which standard should the manager follow? Describe the social resp
> What is a rule of origin? Why is it important to the operation of a free trade area?
> Geyer Schokolade, A.G. makes the bonbon of choice for the German yuppie. Its product’s cachet permits Geyer to charge a hefty premium at home. Geyer expands into the U.S. market, where no one has heard of its bonbons, and charges a more reasonable price
> Laffite Enterprises, Inc., a U.S. firm, has purchased the right to use the trademark of Wellington Imperial, Ltd., in the United States for a high-quality line of Napoleonic War reproductions. Wellington has a cheap line of Napoleonic trinkets that it se
> Analyze the same issues raised in Question 4, but assume Mr. Wise is considering entry into a “prior-approval” country.
> Mr. Wise’s marketing experts advise him that the Japanese market is hungry for his shoes. Focusing on technology transfer issues, discuss whether he should seek a Japanese joint venture partner or enter through a wholly owned subsidiary.
> David Wise, a U.S. inventor, has developed and patented a revolutionary new running shoe that increases one’s speed significantly. His invention has achieved considerable success in the Midwestern region of the United States. Two European companies have
> Assuming the facts from Question 1, what would be the advantages and disadvantages of a joint venture with a major foreign company abroad compared to the alternatives discussed in Question 1? Data from Question 1: Hirt Systems Company is a U.S. company
> Hirt Systems Company is a U.S. company that has a strong market in the United States for securing computer terminals. It envelops such terminals with lead to prevent them from emitting microwaves that can be picked up by “spy receivers.” The key to Hirt’
> Briefly describe the partial sale model of privatization. What is the predominant characteristic of the partial sale? How can a minority private investor try to protect itself from abuse by the majority government owner?
> Assume that Joseph retained Srta. Casañas but failed to obtain the contract. To Joseph’s chagrin, it subsequently learns that Srta. Casañas y Diaz used part of her fee to make a $10,000 payment to a government official. If Joseph has total assets of $5 b
> Using the facts in Question 5, assume that a reference check has uncovered rumors that Srta. Casañas y Diaz has had an intimate relationship with Platano’s assistant secretary for government procurement, although they have no plans for a more permanent r
> Joseph Supersonic Company, a U.S. jet fighter manufacturer, is eager to sell its aircraft to the state-owned airline of the Republic of Platano and wishes to retain a local representative to assist it. Maria de la Concepcion Casañas y Diaz is reputed to
> Borges Meat Marketing, Inc., a Nebraska corporation, wishes to establish a network of gourmet butcher shops in India. It has a well-developed introductory advertising campaign that it has employed in establishing similar butcher shops in the United State
> Jordan Motors, Inc., opens a dealership in Frankfurt, West Germany, selling American cars. In its advertising campaign, Jordan claims that for the next two weeks only, it will beat the price on any comparable German car by 1,000 euros. Faced with this th
> After conducting a market survey, Penton Intergalactic, Ltd., a manufacturer of plows, believes that there is pent-up demand for its product in the expanding agricultural economy of Paraguay. Penton retains Saul Ortiz, a Paraguayan who operates a substan
> Suppose that Roger Sobodka, a U.S. executive stationed in Paris, wishes to build a support office for his firm’s technicians in the Parisian suburb of Asnieres. He enters into an agreement with Francois Demblans, a homebuilder, to do the work for $100,00
> How do a directive, a regulation, and a recommendation differ? Why would the EU choose one over the other? Give examples. What impact does this decision have on businesses?
> The EU sought a declaration that, because of the way in which long-standing Italian law permitted extrajudicial debt recovery by creditors against entities established in other member states, Italy had failed to fulfill its treaty obligations. The EU had
> Following the discovery of a probable link between a variant of Creutzfeldt–Jakob disease, a disease affecting human beings, and bovine spongiform encephalopathy (BSE), which was widespread in the United Kingdom in the mid-1990s, the Commission adopted D
> Is privatization a recent phenomenon? Why has it become more prominent in recent years? What triggered the move to more privatization in Latin American countries? What triggered increased privatization in former communist nations?
> What is the present status of Brexit? What effect has Brexit had on the United Kingdom and the EU? Are there other member states considering departing from the EU? What states and what reasons have been given for taking such action?
> Deutsche Parkinson Vereinigung (DPV) is a German organization devoted to improving the lives of those afflicted with Parkinson’s disease. DPV entered into a relationship with DocMorris, a mail order pharmacy located in the Netherlands, whereby DPV member
> Italy required chocolate products manufactured in other member states that contained vegetable fats other than cocoa butter to be sold in Italy as “chocolate substitutes.” The Commission claimed that Italy had failed to fulfill its obligation under Artic
> Rewe, a limited liability company with an office in Germany, imported goods from the EU countries. In 1976, Rewe applied to a German agency for permission to import Cassis de Dijon. The agency responded that spirits needed to contain 32 percent alcohol t
