(Washington, D.C.) – Citizens Against Government Waste (CAGW) today cited the decision by the European Commission (EC) to delay sanctions imposed against Microsoft until an appeal is addressed as the first correct action taken in the case by the EC.  In March, the EC handed down a draconian punishment against Microsoft for violating European antitrust laws.  The decision required Microsoft to hand over valuable intellectual property to its competitors, unbundle its software, and pay a $612 million fine.

“The decision by the EC, while only temporary and a mere formality, is appropriate and necessary.  It will likely take years for the appeals court to make a ruling, when it will likely overturn the EC’s overreaching penalties,” CAGW President Tom Schatz said.  “In most international antitrust cases, courts rely on precedent if a decision has been made in another jurisdiction to ensure stability in the global marketplace.  Microsoft has already reached a fair agreement in U.S. courts that provides a good basis for the EC’s ruling to be overturned.”

The European Commission began antitrust investigations against Microsoft in 1999.  It contended that by including its Windows Media Player with its operating system, Microsoft had an advantage over other manufacturers of media players.  The Commission also claimed Microsoft did not disclose enough technical data about its operating systems that would allow competitors to manufacture compatible programs.  Settlement talks broke down when the EC insisted that it be able to regulate any future additions to the Windows operating system.

“The EC is ill-equipped to make decisions that are best left to the marketplace,” Schatz continued.  “Much will change in the world of technology before a decision on the appeal is reached.  Letting the market run its course in the meantime will help to cultivate further industry innovation.  By the time a ruling is made, it should be quite clear to Europeans that the original penalties were far too stiff and the U.S. consent decree is an appropriate remedy that should be respected.

“The EC’s decision forcing Microsoft to give up many of its rights to its intellectual property is a dangerous setback to global economic growth.  Companies will have no motivation for designing new products if they have to share their information with competitors or face strict penalties from the EC.  This decision affects Europe and other countries, because 95 percent of the world’s computers use Microsoft’s Windows operating systems.  If this decision forces Microsoft and other American companies to alter their products depending on where they are sold in the world or the whims of unelected bureaucrats, international business and transactions could be severely hampered.”

CAGW tracked the antitrust case in the United States and monitored the $35 million cost to taxpayers.  It works closely with taxpayer groups in Europe such as Contribuables Associés in France and The Taxpayer Alliance in England.

“As the rest of the world continues to grow technologically, Europe will lag behind if it does not change its mindset,” Schatz concluded.  “The European Commission should not have issued a decision that defies precedent and will have such a negative impact on the global economy in the first place.  It is imperative that the United States government continue to weigh in on behalf of American consumers and taxpayers.”

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.