[Politech] Senate Maj. Leader Frist condemns EU "intolerable" Microsoft decision

From: Declan McCullagh (declan@private)
Date: Tue Mar 30 2004 - 21:50:42 PST

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    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.
    
                               ____________________
    
    
    
    
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