http://frwebgate4.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=68287617823+1+0+0&WAISaction=retrieve [Congressional Record: March 24, 2004 (Senate)] [Page S3092] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr24mr04-172] EUROPEAN UNION TRADE DECISION RE: MICROSOFT Mr. FRIST. Mr. President, for some time now, the U.S. Congress has expressed its frustration over the European Union's intransigence on international trade issues that are vitally important to the U.S. economy. From overreaching attempts to regulate e-commerce, to trade barriers against American beef and other agricultural products, the EU has relentlessly pursued protectionist policies that disproportionately harm American businesses and workers. I now fear that the United States and EU are heading toward a new trade war--and that the Commission's ruling against Microsoft is the first shot. For the most part, economic growth across the European Union has been meager during this decade. No doubt this is a by-product of the global economic slow down that began in the last year of the Clinton Presidency. But as the U.S. economy achieves record-setting levels of economic growth, Europe remains stagnant. Why? Because European economies are buried by public sector debt; European economies are drained of their vitality by excessive taxation; and European economies are strangled by excessive regulation from bureaucrats sitting in Brussels. Now, as if destroying Europe's economy were not enough, the European Commission has taken aim at Microsoft, a company whose products and technology have been engines of global economic growth. The Commission's ruling imposes the largest fine ever levied by the Commission against a company--over $610 million. This fine was imposed despite the Commission's tacit admission that European law in this area is unclear, and even though Microsoft is already subject to legal obligations, under the U.S. settlement, for essentially the same conduct that was at issue in the EU proceedings. As a result, money that rightfully belongs to Microsoft shareholders will instead be filling the coffers administered by Commission bureaucrats. The Commission's ruling also requires Microsoft to sell a version of Windows without multimedia functionality--i.e., one that cannot play audio or video. Thus, the ruling forces Microsoft to spend its energies not on developing new, innovative products, but on designing a degraded version of Windows--in short, a product that no one wants or needs. This preposterous demand, by a foreign government, will hurt one of America's most successful companies and harm the hundreds of American IT companies that rely on the multimedia functionality in Windows to offer their own innovative products and services--companies that are responsible for thousands of high-paying American jobs. As the New York Times noted in an editorial last Saturday (March 20), the Commission's demands ``would threaten Microsoft's business model and, more important, harm consumers. The very definition of a computer operating system would essentially be frozen where it is today.'' In imposing this anti-consumer, anti-innovation penalty, the Commission has blatantly undercut the settlement that was so carefully and painstakingly crafted with Microsoft by the U.S. Department of Justice and several State antitrust authorities. There can be no question that the U.S. Government was entitled to take the lead in this matter--Microsoft is a U.S. company, many if not all of the complaining companies in the EU case are American, and all of the relevant design decisions took place here. Had the Commission been cognizant of America's legitimate interests in this matter, it would have acted in a manner that complemented the U.S. settlement. Needless to say, the Commission instead selected a path that places its resolution of this case in direct conflict with ours--and threatens the vitality of America's IT industry in the process. The Commission's complete indifference to the negative impact of its ruling on American jobs, American consumers, and the U.S. economy--and its total disregard of the Department of Justice--are intolerable. The European Commission has, of course, on many occasions paid lip service to the importance of international coordination in the area of competition, and on the need for other countries to be sensitive to extraterritorial effects of their antitrust rulings. But actions speak louder than words, and with the Microsoft ruling the Commission appears intent on saying that it considers the Department of Justice, the U.S. courts, and principles of open and fair international trade largely irrelevant. It is critical that the Departments of State and Justice stand up not only for an important American company, but also for U.S. industry, U.S. shareholders, and American workers. If the U.S. Government does not make a clear and strong statement objecting to the EU actions, we will lose influence and credibility for years to come to the detriment of the U.S. economy and U.S. consumers. ____________________ http://frwebgate4.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=68287617823+0+0+0&WAISaction=retrieve [Congressional Record: March 23, 2004 (Senate)] [Page S2992-S2993] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr23mr04-144] THE EUROPEAN COMMISSION AND MICROSOFT Mr. ALLEN. Mr. President, I rise to address the European Commission's antitrust action against Microsoft. It is my understanding that antitrust authorities for the European Union member nations have given European Competition Commissioner Mario Monti their unanimous backing for a formal commission finding that Microsoft abused its market share of its Windows operating system for personal computers to leverage its way into related markets for networking and multimedia software. It is expected that the European Commission will hand down a formal decision finding that Microsoft is in violation of European Union antitrust laws. By imposing harsh, unprecedented penalties upon Microsoft, the Commission has extended its view of competition and regulation beyond Europe and onto the United States--to the detriment of U.S. laws, industry and consumers. For many years, the European Union and its member states have criticized the United States for adopting laws and regulations that, in the view of European policymakers, have had an extraterritorial reach. The European Commission in particular has consistently urged the United States to ensure that its legal determinations do not intrude into European affairs. We now have a clear example of the European Union not practicing what they preach. If the Commission rules that Microsoft is in violation of European Union antitrust laws, it will undercut the settlement that was so carefully and painstakingly crafted with Microsoft by the U.S. Department of Justice and several state antitrust authorities. There can be no question that the U.S. Government was entitled to take the lead in this matter--Microsoft is a U.S. company, many if not all of the complaining companies in the EU case are American, and all of the relevant design decisions took place here. I would hope that if the Commission were cognizant of America's legitimate interests in this matter, it would act in a manner that complemented the U.S. settlement. I fear the Commission has selected a path that places its resolution of this case in direct conflict with ours. This is not the only example of the Commission's overreaching in this case. In recent negotiations with Microsoft, the European Commission demanded that Microsoft agree to ensure that computer manufacturers who sell pre-installed versions of Windows also install three competing media players--an obligation that the Commission insisted on imposing not just within the EU, but globally. In spite of its objections to these requirements, Microsoft agreed to the Commission's approach in order to reach a settlement. I understand the Commission proposes to impose a fine of over $610 million on Microsoft--higher than any fine in the Commission's history. It has been suggested that the amount of this fine was based not only on Microsoft's conduct in the EU, but in the United States and elsewhere as well. One can only conclude that the Commission was not satisfied with how U.S. antitrust authorities and courts resolved the case against Microsoft, and therefore decided to act as a kind of supra-national competition authority by fining Microsoft for its conduct worldwide. The Commission's proposed ruling, as well as its negotiation tactics, is unprecedented in its scope. By proposing [[Page S2993]] to fine Microsoft for purported anticompetitive conduct and injuries in the United States, the European Commission is directly challenging the adequacy of the United States' own antitrust laws, including the settlement that Microsoft and U.S. authorities reached in the U.S. proceedings. In fact, the obligations proposed to be imposed on Microsoft by the Commission are precisely the type that the U.S. District Court and the U.S. Department of Justice rejected as undermining consumer welfare. It is incumbent on the Departments of State and Justice to stand up not only for an important American company but more importantly for legitimate U.S. jurisdiction over alleged anticompetitive behavior in the United States. The U.S. and the EU are signatories to a 1991 comity agreement on antitrust issues which requires that one government defer to the other if the principal issues being investigated involve companies of one of the parties. Here, the EU is investigating a U.S. company based on complaints from other U.S. companies. If the U.S. Government does not make a clear and strong statement objecting to the EU's extraterritorial approach, we will lose influence and credibility for years to come to the detriment of all U.S. industry, as well as to U.S. consumers. ____________________ _______________________________________________ Politech mailing list Archived at http://www.politechbot.com/ Moderated by Declan McCullagh (http://www.mccullagh.org/)
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