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The Year in Review: #9. EU Muscle

While U.S. courts took significant steps to relax domestic antitrust policy in 2007, European competition regulators stepped into the gap and emerged as the world's most aggressive antitrust watchdogs.

The hallmark of the EU Competition Commission's hard-line approach is the nearly $700 million fine it imposed against Microsoft in 2004 for the bundling of its Windows Media Player with its operating system, and its failure to share server interoperability information with competitors.

For three years Microsoft waged a well-publicized battle to avoid paying the fine, appealing the decision to the Court of First Instance in Brussels. But after the court dismissed the bulk of the appeal in September, Microsoft admitted defeat. It decided not to appeal to the European Court of Justice and agreed to license its server technology to competitors for a low, one-time royalty payment.

"The decision is not what we hoped for," says Microsoft General Counsel Brad Smith. "[B]ut it does provide some clarity, on which I hope we can start to build a new and stronger relationship with the European Commission."

But while Microsoft is looking to put the case in the past, European regulators are just warming up. The Commission already has turned its attention to new targets, charging Qualcomm with misuse of its position in the market for cell phone chips and investigating Apple's practices in the digital music marketplace.

Adele Nicholas

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