A Tale of Two Continents | Citizens Against Government Waste

A Tale of Two Continents

The WasteWatcher

America and Europe have two different visions of how to succeed in business. Europe does it without really trying, and America does it the old-fashioned way, by working hard and making higher quality and more desired products. This is particularly true in technology, which is one explanation for the European Commission’s (EC) ongoing crusade against Microsoft.

Since Europeans can’t create a company that can provide sufficient competition to the world’s largest software company, the EC manufactured a case in order to “compete.” The latest phase of the lawsuit, which was initiated in 1998, ended Friday, April 28, with a decision by the Court of First Instance expected sometime in the next six months to one year. While the case is at rest, consumers, taxpayers, and the world economy are anything but relaxed awaiting the outcome. The stakes are high, and the effect of the decision on innovation will reverberate throughout the world.

The EC seems to think that government-designed software is best for consumers and taxpayers. The regulatory body is already raising questions about the interoperability and design of Microsoft’s new Vista Windows operating system. The cost of continued litigation and the creation and maintenance of a small army of EU bureaucrats monitoring every decision made by Microsoft will reverberate throughout the “new” Europe and the rest of the global economy. Government intervention in the laboratory has “Brave New World” implications for any company in any industry that obtains a substantial market share.

The recent action by France that could force Apple to develop a new iPod for the French market is evidence of this trend in Europe. The failure of technology by government design is best illustrated by the dismal sales figures of the non-Media Player operating system (XP-N) mandated by the EC’s decision. Total sales of XP-N were about 1,700 last year; no original equipment manufacturers ordered a single copy. Sales of the full Windows operating system in Europe were approximately 30 million. Market penetration of the EC-ordered XP-N version: .0057 percent. When governments decide what people should buy, the products don’t sell.

Citizens Against Government Waste estimated that the federal and state governments spent $35 million on the Microsoft case in the U.S. The Justice Department continues to monitor compliance with the consent decree. Since that case was settled in 2003, technology is rapidly advancing on many fronts. The iPod has erupted in popularity, the Mozilla Firefox browser continues to eat into the market share of Internet Explorer, and Google is viewed by many as Microsoft’s new competitive threat. The only certainty in technology is progress, which can only occur without government intervention in the marketplace. The U.S. government and the nature of our economy impose far fewer restraints on innovation than the European Union. The EU makes it difficult to do business, while failing to respect antitrust decisions in other nations.

Microsoft’s competitors think they found the friendly forum they need to try to win the market share they can’t obtain through true competition. The best message the Court of First Instance could send to them along with consumers and taxpayers in Europe and the rest of the world would be to reverse the EC’s overly burdensome and troublesome decision.

Sign Up For Email Updates

Optional Member Code