EU regulators could target Apple

With Microsoft's anti-trust appeal now decided, the next US technology company to get a place on the European Union (EU)'s regulatory hot seat may be Apple, an anti-trust expert has said.

"The decision by the Court of First Instance is a clear signal to the European [Competition] Commission that it has the leeway to go ahead," said Herbert Hovenkamp, a professor at the University of Iowa College of Law and a noted antitrust scholar. "[The commission] now has a license to go ahead, and they have a pretty aggressive posture. I think this bodes ill for some companies."

Among those already facing investigations or accusations from the EU antitrust agency, which is led by Neelie Kroes of the Netherlands, are chip makers Rambus and Intel; Qualcomm, a wireless technology vendor; and Apple.

Apple, in fact, will face two days of hearings before the commission starting Wednesday to answer charges that it and its four music label partners are violating EU laws with the pricing structure and purchase restrictions of the iTunes music store. In early April, the commission confirmed that it had sent a Statement of Objections (SO) - the agency's term for an official complaint - to Apple and partners EMI, Sony, Warner Music Group and Universal Music.

The SO claimed consumers are restricted in their choice of where to buy music - because each country's version of iTunes only accepts orders from customers who live in that country - and at what price. iTunes tracks sales for varying amounts, depending on the country.

But the commission steered clear of calling Apple another Microsoft in April. "The Statement of Objections does not allege that Apple is in a dominant market position," the group said in a statement at the time.

Yesterday, Kroes downplayed any link between the court's rejection of Microsoft's appeal and possible action against other US technology companies. "You may hear scare stories about the supposed negative consequences of this ruling for other companies," she said during a news conference early this week. "Let me be clear. There is one company that will have to change its illegal behaviour as a result of this ruling: Microsoft."

Hovenkamp was confident that yesterday's decision would embolden the commission. "This was a landmark decision, and a landmark case," he said. "It stands for a couple of important things. First, it's a declaration of independence, a statement that their anti-competitive policy is not going to be dictated by US policy. Second, it clears the way for the commission to pursue new cases.

"You're going to see a more aggressive commission that will go after high technology companies, especially those that are involved with networks or standard setting," Hovenkamp said.

"Rambus and Qualcomm, certainly," he said, are among the companies at risk from a combative commission. "Intel? Perhaps. As for Apple, there are some undeveloped issues there."