The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Europe Assaults U.S. Businesses

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


As the global economy slows, every effort should be made to encourage businesses to invest, innovate, and market their products around the world.  Unfortunately for taxpayers and investors, European regulators are abusing their power in a manner that will adversely impact the ability of the world to avoid the worst results of the current slowdown.

The basis for this concern is the European Commission’s (EC) all-out assault on American business.  The most widely publicized case involves Microsoft.  The company was forced to hand over valuable intellectual property, unbundle its software, and pay a $612 million fine, the largest ever handed out by the EU at the time.  On February 21, Microsoft announced that it is going to reveal more of its trade secrets in order to make its Windows platform more compatible with different types of software.  Unfortunately, this is not likely to convince the EC give up its crusade.

A January 17 Wall Street Journal article noted that the EU, since September, has “dialed up a case against Qualcomm, continued processing claims against Intel, charged MasterCard with setting illegal fees, searched for reasons to block Google’s purchase of DoubleClick, and forced Apple to cut prices for digital songs (though the iPod maker was cleared of any wrongdoing).”

The EC has become the place to go if companies can’t win in the marketplace.  In considering the various cases against successful U.S. businesses, the EC may also be setting its sights on any European businesses that become market leaders.  After the French National Assembly adopted a copyright reform bill in March 2006 that would have outlawed closed digital rights management technologies such as Apple’s Fair Play, which runs the iPod, the French Senate subsequently approved legislation that would allow companies to keep their trade secrets secure.  One senator noted that such protection is not just for Apple, but also for start-ups in France.

In several prominent cases the EC has shown a complete disregard for intellectual property, antitrust laws, and court decisions in the U.S.  Attempting to pilfer Microsoft’s, Apple’s, or Intel’s intellectual property rights opens the door for other competitors who can’t succeed in the marketplace to tie up the courts and waste tax dollars bringing lawsuits against successful companies.  The stakes continue to be high, and the effect of the EC’s various fines and decisions on innovation will reverberate throughout the world.

As the EC continues its near-sighted attack on intellectual property and competition, companies will try and capture market share through litigation rather than innovation.  That will not help the world recover from the current global economic slowdown.

  -- with Matthew Elliott, British Taxpayers’ Alliance

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