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Today’s decision by the EU Court of First Instance rejecting Microsoft’s appeal of the European Commission’s antitrust ruling is another in a series of EU mercantilist actions designed to limit the competitive advantage of U.S. technology companies. Rather than compete in the marketplace, the EU has decided to use government to unfairly tilt the playing field in Europe’s direction.

Today’s ruling also sets a disturbing precedent as the Commission says it will consider the implications of the ruling for future antitrust enforcement, with prime targets likely to be other U.S. technology companies with global leadership positions. Equally worrisome is that the ruling may embolden other countries – including Korea – to take or expand similar mercantilist actions done under the guise of antitrust enforcement.

The EU’s and Court’s interpretation of the bundling issue is especially troubling. There seems to be no rationale for their particular focus on Media Player. What’s next: banning Microsoft from including a “calculator” or parental control functions in Vista, or for that matter any software that competitors decide threatens their business? Indeed, the ruling’s affirmation opens the door to a troubling precedent, particularly as the Commission believes it applies to any “software products otherwise available on a standalone basis.” Is the Commission really saying it wants to go back to the days when consumers had to purchase extra products like spell checkers?

The ruling also makes it easier for the Commission to continue to fine Microsoft for non-compliance, and to put the more than $1 billion already collected into the EU budget – essentially a tax in part on U.S. consumers that subsidizes European taxpayers.

While this ruling is obviously about anti-trust, it underscores just how much the EU mercantilist technology policies are focused on disadvantaging U.S. technology companies that compete in Europe.


Through its research, policies proposals, and commentary, The Information Technology and Innovation Foundation is working to advance and support public policies that boost innovation, e-transformation and productivity. For additional information, Web users may access ITIF at http://www.innovationpolicy.org or by contacting Dr. Atkinson at (202) 626-5732 or ratkinson@innovationpolicy.org

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