Brussels regulators sharpened their teeth on Microsoft

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If Apple is looking for advice on how to deal with regulators worried about “inter-operability” it need look no further than its old rival from Redmond in Washington state. Microsoft has been battling antitrust officials on both sides of the Atlantic for many years.

The software group’s troubles culminated in March 2004, when the European Commission slapped a record €497m fine on Microsoft for violating European Union competition rules. Brussels found, among other abuses, that the group had failed to provide rival software developers with sufficient technical information to allow them to create inter-operable products.

Could Apple face similar pressure from the Commission in the future? Both groups have a strong grip on their respective markets. Apple’s iTunes accounts for as much as 80 per cent of downloads in some EU markets, while Microsoft’s Windows operating system boasts a market share of more than 90 per cent worldwide.

Moreover, while Microsoft at least claims that it is serious about inter-operability, Apple has unashamedly built its success on the concept of a “walled garden” - a closed world of proprietary technology.

Some experts point out, a key difference: few companies in the information technology sector can operate successfully without some form of interaction with Windows. And Micrssoft’s strong position in a range of related markets from servers to media players gives it additional clout.

Music, by contrast, will continue to be distributed through various channels, the experts say. “If you want to do anything with a computer, you must have Microsoft Windows. The iPod and iTunes are not must-haves,” says one Brussels-based competition lawyer.

For the time being, the Commission has not set its sight on Apple. But Ian Forrester QC, a partner at White & Case, the UK law firm that represents Microsoft, says the Commission’s line on inter-operability leaves room for uncertainty. “I think it is difficult to find a consistent line in the Commission’s cases regarding the duties on a manufacturer of a successful product and to what degree he can allow or prohibit interaction with a rival’s product.”

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