Apple's iPad to face Belgian antitrust probe

Apple’s iPad was touted as one of the most significant innovations on the consumer electronics market in 2010, in spite of moderate launch sales. Some argued that tablets would even partly replace personal computers eventually.

Vincent Van Quickenborne, the Belgian economy minister, urged Belgian antitrust authorities on 17 January to investigate possible abuses of its dominant position by IT giant Apple with its iPad tablet.

The concerns come just  day before Apple posted financial results cover the fiscal first quarter of 2011 which ended on December 25th last year. Revenue was at an all time high with Apple’s highly popular devices and associated App Stores making up the bulk of the $26.74 billion generated. Net quarterly profit was $6 billion.

The Belgian minister voiced suspicions that Apple is abusing its dominant position on the tablet computer market by selling exclusive newspaper subscriptions from its online shop iTunes.

"If newspapers will no longer be able to sell their subscriptions with their own channels, but only by using iTunes, this will look like an abuse of a dominant position," Van Quickenborne said.

The Belgian ministry for economic affairs said in a note that "the case could also be transferred to the European Commission," which is in charge of competition at EU level.

However, Apple may face more trouble in Europe than due to possible abuses of its dominant position in the online newspaper market.

The lack of compatibility of the iPad with competitors' products may also represent a new battlefront for the US giant, especially if the device ends up strengthening its position as a privileged platform to access the Internet, and not to just to read newspapers or e-books.

Brussels is famous for having waged one of its toughest ever antitrust campaigns against IT giant Microsoft for tying its dominant Windows operating system to its Internet Explorer browser, undermining competitors such as Mozilla's Firefox or Apple's Safari.

Microsoft did allow other browsers to operate through Windows, but the fact that it offered immediate access to Internet Explorer on the computer's desktop was deemed by Brussels to be a breach of competition rules.

The iPad and other Apple products went far beyond the limits crossed by Microsoft. The iPad, in fact, does not allow any browser other than Apple's Safari to run on its platform. So while Microsoft only favoured Internet Explorer over competing browsers, Apple does not give competitors a chance.

What's more, many other competing applications do not work with the iPad, including Flash (online images).

Amelia Torres, spokesperson for EU Competition Commissioner Joaquin Almunia, preferred not to comment on the matter. However, in a recent speech on competition in digital media, Almunia did underline his full support for interoperable systems.

"The task of competition authorities will remain to ensure that no market is foreclosed to competitors better able to serve their final users," he warned.

In spring 2010, the Commission attacked Apple for limiting the development of applications for its iPhone operating system. The case was later closed following Apple's compliance with Brussels' requests.