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EU "Competition" Commissioner

Well, with the EU's stance on Microsoft, it looks like Europe has given up on doing any type of innovation on their own and have decided that the only way they can compete economically is to tax successful American companies who do business there.  I'm not sure if that will be a sustainable business model long term.

Why is all of Europe seemingly sliding back into the morass of socialism while traditionally socialist countries like China embrace capitalism? 

EU Schmemoo
Thursday, March 18, 2004

The EU competition commissioners have done more than anybody to force governments to cut hidden and not-so-hidden subisidies to nationalized and/pr government controlled industries.

The reason that the EU can pass decisions against private monopolies who blatantly break competition law in order to leverage unfair advantage is that they are not directly dependient on a particular politician or political party, unlike in certain banana republids not a long way away from Mexico, where corrupt monopolies can bribe incumbent presidents to neuter any fom of judicial enquiry.

Stephen Jones
Thursday, March 18, 2004

Stephen, what are you saying ?  :)

Love it or leave it, Pinko-Commie
Thursday, March 18, 2004

Stephen, I hope that post was intended as a cynical joke. The EU has been examplar in protecting monopolies in the tech sector and is actively striving to create new ones. Take a look at the set-top-box market, where they are trying as hard as they can to force mandatory standardization on EU company supported technologies.
What they do not like is strong players from outside of the EU borders. That is a big difference.
In the specific MS case there are the added bonusses of pillaging that shiny cash pile and conveniently scoring some pr coups in riding a general anti-american sentiment.

Just me (Sir to you)
Thursday, March 18, 2004

I am being perfectly serious. I was referring to the question of competition within the EU, where the member governments have been forced by the commission to give up favourable treatment of their nationals and companies.

The cash pile that the EU is "plundering" was made as a result of breaking EU laws anyway. As for pandering to anti-Amerian sentiment that is a straw man that isn't even worth knocking down. Most of the fines that the EU has given have been to European companies.

And of course one of the reasons for anti-US sentiment in the rest of the world is the attitude of the US government, and many companies and as your posts to this forum make clear individuals, that they are above the law and can do what the hell they like.

Stephen Jones
Thursday, March 18, 2004

Yes, it's all a big conspiracy against America.  That Mario Monti really hates freedom.

Or could it be that American media only covers the cases involving American companies, so those are the only ones the American  public is typically aware of?

Bonus question: was it the EU or the USA which was recently found to be illegally subsidising domestic industries by the WTO?

JP
Thursday, March 18, 2004

The EU bureaucracy does not mind EU monopolies, in fact it actively encourages them and extracts copious bribes from them in order to continue. The EU hates and punishes all non-EU monopolies especially American ones which have legal restraints in US law on bribery, even overseas.

Not that MS doesn't deserve some containment. The past two US administrations wouldn't lay a hand on them. So if bribes cannot be extracted, punitive taxes will accomplish the same thing, i.e. transfer of excessive profits from the US back to the EU economy.

It's far easier than creating your own profitable technology businesses. Plus software development in Europe is being driven by the same socialist philosophy as the bureaucracy. It manifests itself in the open source movement. Even though OSS seems to have American proponents at it's highest levels, most of the contributors are European and it is getting deeper penetration there than in the US.

old_timer
Thursday, March 18, 2004

Stephen: 100 Euro fine for feeding the trolls.

The European Union
Thursday, March 18, 2004

> It's far easier than creating your own profitable technology businesses

Oh yes massa, we jus' a bunch o' dumb savages over heuh.

Just don't tell the people at SAP, for example.


Thursday, March 18, 2004

I'm no great lover of the EU but I find it a bit difficult to see this as a EU vs US thing. 

A quick bit of research shows them in recent months giving a kicking to Greek, British  &  Irish airlines, a Finnish lift (elevator) maker, a French power company, two German & one Finnish copper producers and five producers of graphite products whose nationality I neither know nor care about.  All this in about 5 minutes before my eyes glazed over with the sheer tedium of it all.

There probably is some political pressure to nail the gentlemen from Redmond - but I suspect it's due to anti-MS not anti-US feeling.  The fact that MS stood up in court this week and said sorry for anticompetitive practices is unlikely to help their case.

a cynic writes...
Thursday, March 18, 2004

What the EU has done to break down monopolies inside Europe is beyond your wildest dreams. Claiming that commission is only hunting American firms is really incredible. Only in this week's newspapers 5 cases where mentioned where the EU hunted European firms. It is probably much much more. It mentioned one American case. I am sure that the website of the commissioner contains a list with all cases, so find out yourself.

Painting the commission as a burocracy is another pertinent lie. The number of civil servants in Brussel is a fraction of the number of civil servants in London, Paris or any other major capitol. Oh yes, this includes the interpreters and translators.

These are all simple facts that can be found on the net from reliable sources.

Is the commission socialist? That is funny, many people over here in Europe claim the exact opposite. Looking at their palmares, there is hardly any support for the claim that they are socialist.

BTW, what is wrong with being socialist if you at least life in a working democracy, that respects human rights and free entrepreneurship? Ok, that is a bit over the top. Europe does need a kick under the a**, but not in Brussel, only in some member states.

Real proud European entrepreneur
Thursday, March 18, 2004

Excuse me if I don't cry Microsoft a river.

Mike
Thursday, March 18, 2004

"BTW, what is wrong with being socialist if you at least life in a working democracy, that respects human rights and free entrepreneurship? "

Because in order for a socialist government to continue to function, it has to raise an ever larger amount of revenue to continue to it's socialistic programs. More socialistic programs; more bureaucracy to run them; more taxes required to feed the machine.

This revenue normally comes in the form of heavier and heavier taxation which has has a very chilling effect on entreprenuers. Why work harder than the next guy? Why risk your money, health and sanity when a large chunk of your work will be taxed away to give to those who wouldn't think of working harder than you?

Huh?
Thursday, March 18, 2004

"Because in order for a socialist government to continue to function, it has to raise an ever larger amount of revenue to continue to it's socialistic programs. More socialistic programs; more bureaucracy to run them; more taxes required to feed the machine."

I think you've adequately described both European and American government. Unless I *totally* misremember my high school civics lessons, we have a remarkable number of socialist programs here in the US (Social Security, Medicare, Medicaid, unemployment insurance, Welfare, farm subsidies, education scholarships, and a host of other programs).

So don't try to play the superior form of government card here.

My understanding of the chief difference between American and (most) European governments is their focus. By and large, European governments focus on the people governed: endeavouring to secure a better standard of living for every citizen often at the expense of large corporations and the most wealthy citizens. While American government is ostensibly concerned with protecting the rights of all citizens, it is very clearly more concerned with protecting the rights and privileges of corporations and the wealthy campaign contributors who dictate the policies and procedures of ALL elected officials.

In this case, Microsoft was found to be an abusive monopolist in the US but our government didn't have the will to protect consumers and competition. On the other hand, the European Commission clearly has a greater focus on what is good for society as a whole.

Don't be distracted by the fact that the fines will be extracted from an American company. That money was illegally extracted from the European Union and should be returned to its citizens.

I just wish our own government had the balls to stand up to the most egregious corporate villains.

Jeff Watkins
Thursday, March 18, 2004

Huh?

You do realise that you've just used almost exactly the same argument Karl Marx did for the inevitable collapse of capitalism and the onset of revolution? ;-)

Of course his version had the fruits of the labour of the urban proletariat taken by the evil owners and managers of the means of production but the same argument none the less.  Utter cobblers as it turned out. 

You haven't convinced me either.

a cynic writes...
Thursday, March 18, 2004

So which part of my argument is flawed?

1. That socialistic programs require taxation to support them?

2. That heavy taxation has a chilling effect on entrepreneurs?

I know it's good sport and in vogue to throw down words like "evil corporations" and all that, but the fact of the matter is that it is *small business* that is the lifeblood of an economy.

It ain't companies like MS that run our economy. It's Joe Schmoe down the street who quits MS to go start his own small business. And if Joe Schmoe is penalized for his success by paying  more and more taxes  then Joe Schmoe just says "To hell with it all".

This is the reason that China is begin to embrace some forms of capitalism and private ownership. They realize that the only incentive to work harder (short of violence) is by assuring the person that will receive an economic reward. Give someone an opportunity to make a better life for themselves, and they will work harder and be more productive. Penalize them by taxing them for the purpose of wealth distribution and you've just removed the incentive to work harder.

Huh?
Thursday, March 18, 2004

EU Schmemoo, one stage in your argument was a little too concisely expressed for me to follow it. Could you explain how you got from (1) the EU is slapping Microsoft down hard for monopolistic practices, to (2) "Europe has given up on doing any type of innovation on their own and have decided that the only way they can compete economically is to tax successful American companies who do business there"?

I see that the EU has decided to tax (well, actually, penalize for breaking the law, but never mind that) one successful US company, but what I'm missing is how you worked out (a) that "Europe has given up on doing any type of innovation on their own" and (b) that the EU's decided that this is "the only way they can compete economically"?

I'm sure there's some ingenious reasoning behind those assertions, and I'm looking forward to finding out what it is. Thanks in advance!

Gareth McCaughan
Thursday, March 18, 2004

Huh? Well I could think of a number of flaws  - but start with this one - over my life I suspect I'll be a net contributer to the government,  given that I earn well above average.  However, at times I haven't been - and it's possible that on my way home tonight I'll fall under a bus and never be able to work again.  The taxes of the rest become my safety net.  The same safety net that's there to catch everyone.  The fact that in many cases people are too thick or too limited in their horizons to climb off the damn thing irritates me too.  But I'd prefer it's there.

It's also possible to look those social programmes as a way of buying off revolution.  The fabian socialists who brought them in during the early part of last century certainly thought so.  And Marx's vision of revolution in the developed west didn't take place.

Finally, you make the assumption that the people who own and run a small business create the wealth.  A hardline socialist would suggest that the employees who do the work create the wealth and the owner appropriates it.  It's a fundamental difference in outlook between left & right which I suspect has more to do with self-interest than some penetrating insight.

a cynic writes...
Thursday, March 18, 2004

It is ridiculous to label anything anti-business as
"Socialist". It is also not the job of the "Free Market"
types to be "pro-business" or "pro-market". They are
supposed to be "pro-enterprise". Mass concentrations
of market power are "anti-enterprise", which is why
agencies like the EU attack monopolies, after the
example of Mr Trust-Buster himself, Theodore Roosevelt.
I want to see you "EU are pinkos" trolls calling Teddy R.
"Socialist", just for the comic effect of such stupidity.

A
Thursday, March 18, 2004

"It's Joe Schmoe down the street who quits MS to go start his own small business."

Shouldn't that be "Joel Schmoe"?

:)

Jim Rankin
Thursday, March 18, 2004

Children, children...

All this squabbling is most unbecoming. There is no 'right answer' with respect to whether US- or EU-style market economies are better, because there is no absolute standard for 'better', so which is better is entirely subjective and liable to change over time.

For example, take a look at the UK. Through the 60's and early 70's the political climate was quite far to the left; massive nationalisation of the means of production and distribution, a strong emphasis on state support and redistribution of wealth, high taxation. This did indeed lead to a substantial diminution in innovation and investment. Whether this was 'bad' for the nation as a whole is impossible to say; some people were very much better off than they would otherwise have been, some were undoubtedly not as rich as they might otherwise have been. What is certain is that by the late 70's the situation was unsustainable.

Enter Thatcher in the 80's (well 1979, actually) and the pendulum swings, first rather slowly and then (thanks to the Falklands War and subsequent electoral success) rather more quickly to the right. Massive return of state run enterprises to the private sector. Huge restructuring of industry, vast unemployment for the unlucky, much richer pickings for those in employment. All this accompanied by a singular inability to reshape the principal functions of state - health, education, social welfare - and a totally inept attempt to reduce the cost of the state institutions not by simplifying what they do, but by starving them of cash. Result, a complete cockup with respect to the railways. Most people get richer, but the rich get much, much richer. Sleaze, lack of innovation in public policy, position unsustainable.

Meanwhile the left reinvented itself. No more ideas of the state running the mines and the steel industry and the aircraft industry and the oil industry and the... Out with all the socialist concepts and in with what is broadly a Christian-Democratic ideology. Enter 1997, right wing wipe out, centre left landslide.

Present circumstances? Traditionally conservative institutions (Tory party, House of Lords) fighting *for* previously left wing concepts like human rights *against* a left of centre government whose Home Secretary is somewhere to the right of Gengis Khan and a Prime Minister who is on better terms with the Republicans in America than much of his own cabinet. Damn, isn't this confusing!

So what's the moral of all this? Simply that the meta-model of liberal democracy works. At least over my lifetime it has self corrected, switching from one tack to the other whilst maintaining a peaceful society (when measured against, say, the Soviet Union, China or parts of Africa) and damping the effect of extremes (totalitarianism, communism, nationalism, racism) by providing enough slack to allow their expression without real chance of their implementation. Sometimes one political philosophy is in the ascendent, sometimes another, but all the philosophies that actually gain power are within a couple of standard deviations from the mean and broad enough to encompass a majority of the electorate.

Now, I haven't enough first hand experience of American politics to know whether the US political climate has changed polarity as radically and as swiftly over the last 40 years as in the UK. From the outside we see major shifts in Presidential style (from a peanut farmer to a B-movie actor), but whether this fundamentally changes American policies is another matter. What is clear, however, is that the liberal democratic system works just as well in America as Europe. No wars, no revolutions, no insurrections, no tanks on the streets, no secret police (well, not too many and not overtly political) and just the odd riot on both sides of the Atlantic.

Overall, I rather think we have more in common than in separation.

Gaius
Thursday, March 18, 2004

"The taxes of the rest become my safety net."

Kind of like how paying all those Social Security taxes garuntee you a safety net when you retire, which the government will never tap into for other programs, which will pay you as much or more if you had been able to invest those tax monies yourself, and which is not going to go bankrupt before you can collect any of it?

Kind of like that?

Jim Rankin
Thursday, March 18, 2004

I love political discussions.  Have you ever noticed that some people, perhaps myself for all I know, get on forums and talk about the programming world; and they occasionally get something so incredibly miserably wrong?  A horrible oversimplification that just makes you wonder what world this person's from?

Well, the world political stage dwarfs the computer world.

Tayssir John Gabbour
Thursday, March 18, 2004

Incidentally, I'm not saying anyone's post led me to think this.  It's just there are so many details that require personal experience... complexity that dwarfs the codebases we struggle with.  I guess I'm just depressed at all these details and premises that I could never verify.

Tayssir John Gabbour
Thursday, March 18, 2004

Gartner:

http://www3.gartner.com/DisplayDocument?doc_cd=120139

"Gartner believes a settlement in this case before the 24 March deadline is still possible, although the EC will likely be reluctant to make a deal. In our view, the EC's primary motivation for continuing this action is the need to maintain credibility and “declare victory.” "

Joe Wilcox (Jupiter Research)

http://www.microsoftmonitor.com/archives/002519.html

"Before joining Jupiter Research, I posted on my personal Weblog a long treatise warning that the United States’ invasion of Iraq could hurt Microsoft in Europe (that observation is not a commentary on whether or not I support the war). As a symbol of American capitalism, Microsoft is an easy target in Europe, where anti-American sentiment has increased following the war. "

Just me (Sir to you)
Friday, March 19, 2004

"Before joining Jupiter Research, I posted on my personal Weblog a long treatise warning that the United States’ invasion of Iraq could hurt Microsoft in Europe (that observation is not a commentary on whether or not I support the war). As a symbol of American capitalism, Microsoft is an easy target in Europe, where anti-American sentiment has increased following the war. "

That's a bunch of bullshit - the case against Microsoft started out way before the last Iraq war. In fact, it started out even before Bush was elected president.

What I'm still missing is someone to stand up for Microsofts fair competitive business practices. Anyone from the Anti-EU league mind to fill in...?

whatever
Friday, March 19, 2004

Are you suggesting that you believe Microsoft has used "fair competitive business practices"? If so, have you simply been ignoring every shred of evidence presented in every court case against Microsoft in the last decade?

Facts are facts: Microsoft *is* an abusive monopolist. The only real question now is what should be done about it.

The US government chose to do nothing about it (after wasting a tremendous amount of tax money prosecuting the case); but it looks like the EC will not back down.

Jeff Watkins
Friday, March 19, 2004

"the case against Microsoft started out way before the last Iraq war"

Are you suggesting the outcome was decided at the start?

BTW: The rest of the industry seems to believe that a media player is part of an OS distribution, since they are all bundeling one.
Hell, I wouldn't even mind if for once the competition just tried to compete by making offering a better technology. Now I am sure that sounds a bit radical for the "why innovate when you can litigate" crowd, but hey.

I'm sure we are all just dying to have the likes of Realplayer and Quicktime installed out of the box. Right.

Just me (Sir to you)
Friday, March 19, 2004

2004's decisions as of today: http://europa.eu.int/comm/competition/antitrust/cases/index/by_event_2004.html

Only one American company on the list to I guess the EU must be being _really_ sneaky about their anti-Americanism.

Or is there another interpretation?
Friday, March 19, 2004

"The rest of the industry seems to believe that a media player is part of an OS distribution, since they are all bundeling one."

Which "rest of the industry" are you talking about? Microsoft holds a monopoly on the PC desktop operating system market. That means there are no competitors to speak of. Yes, Apple bundles QuickTime with Macintosh; but as everyone likes to point out when they aren't trying to invent "competitors" for Windows, Apple enjoys a miniscule fraction of the market (2 to 3% last time I checked). In addition, there is Linux which also doesn't command a large desktop market share and doesn't included a bundled media player (although many distributions include bundled MP3 players).

Under US law (and I should imagine EU law), monopolists are required to adhere to a different standard of behaviour. Actions which might be simply aggressive for any other company are frequently forbidden to monopolists. During the Microsoft Antitrust trial here in the US, it was conclusively shown that Microsoft abused its monopoly in the PC desktop operating system market. This was the basis for numerous state and class action lawsuits which have been recovering revenue Microsoft acquired through abusing its monopoly.

"Hell, I wouldn't even mind if for once the competition just tried to compete by making offering a better technology."

I assume you must be talking about competitors to Microsoft's media player, because Microsoft holds a monopoly in the PC desktop operating system market and therefore has no competitors in that market. I believe that Apple and Real (and other competitors) are genuinely trying to compete on the merits of their products; however, Microsoft has once again leveraged its desktop operating system monopoly to unbalance the competitive field.

The point of Antitrust legislation in the US (and presumably in the EU) is to prevent companies which enjoy a monopoly position in one market from leveraging that monopoly position into dominance in another market.

During the US antitrust litigation, Microsoft was conclusively shown to have engaged in just such monopoly leverage in the web browser market. Presumably, the EC has sufficient evidence to assert that Microsoft has also tried to leverage its monopoly on PC desktop operating systems into dominance in the media player market. Therefore, the law is entirely appropriate in placing constraints on Microsoft's behaviour and exacting punishment for violating the law.

That the US government chose not to constrain Microsoft's behaviour beyond a gentle slap on the wrists is not relevant to the EC actions.

Jeff Watkins
Friday, March 19, 2004

Jeff,

the crux of the matter is that there is no such thing as an isolated PC desktop operating systems market. Instead there is an epic  battle for the same solution space from PC's, thin clients, Game consoles, PDA's, phones, settop boxes ...

In sectors such as oil, that stay basically constant for centuries without any major innovation the "monopoly" rules might apply. In bleeding edge innovation markets, where landslide market disturbance through new technological advances are an everyday occurence, it makes absolutely no sense.

Sure a watchdog is needed, and MS do seem to have stepped over the line in some cases, but unfortunately, the watchdogs also have been led astray in other cases.

If euro governments were truly concerned about competition, they would be arguing for interoperability through open data standards in official usage. Instead of this we see an argumentation for particular implementations coupled with particular business models.

Just me (Sir to you)
Friday, March 19, 2004

> BTW: The rest of the industry seems to
> believe that a media player is part of an
> OS distribution, since they are all
> bundeling one.

Not quite.

The MP is bundled with the OS; that doesn't make it part of the OS, any more than Notepad.

I'm not against MS bundling their MP with their OS. I just find it ridiculous that they claim they can't remove the MP because it's *part of* the OS.

I see this demand from the UE - remove WMP - as a way of levelling the field (there is no default MP, so people must go get their own OR the OEM gets to bundle another MP). Will it have any effect? Probably not, but at least someone is trying.

Paulo Caetano
Friday, March 19, 2004

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