Strong Reaction From Politicos On EU-Microsoft Decision

Critics claim the EU's decision could stifle innovation and hurt consumers. Supporters believe it is a significant step toward protecting competition.

InformationWeek Staff, Contributor

March 25, 2004

2 Min Read

In the wake of the European Union's sweeping decision against Microsoft, the ruling produced sharp reactions from U.S. political leaders, some hailing the decision, others attacking it.

In the U. S. Senate, Majority Leader Bill Frist criticized the decision, while Senator Herb Kohl praised it. A group of Congressmen criticized the ruling.

In Massachusetts, Attorney General Tom Reilly, who is pursuing the only state antitrust charges against Microsoft, supported the decision. "The EU's ruling," said Reilly in a statement, "underscores what we've known all along, that the remedies Massachusetts is seeking in its case against Microsoft are both practical and possible. The EU's decision, unlike the settlement reached between Microsoft and the Justice Department, addresses the company's past, present, and future conduct."

In the crazy-quilt world of antitrust, the Department of Justice, which resolved its antitrust case against the software giant several months ago, is criticizing the EU decision, claiming it could stifle innovation and hurt consumers.

Hewitt Pate, assistant attorney general for the antitrust division, said the 2002 settlement between the DOJ and Microsoft delivers "clear and effective protection" for consumers and competitors. He added that the $603 million fine leveled against Microsoft--in "the most ambiguous and controversial area of antitrust enforcement"--calls into question lesser fines imposed on price-fixing cartels and other business arrangements.

Senator Frist, a Republican, took a shot at EU policy, observing that business regulation in Europe had contributed to Europe's economic stagnation. He added: "Now the European Commission has taken aim at Microsoft, a company whose products and technology have been engines of global economic growth."

Democratic Senator Kohl praised the ruling, saying it represents "significant steps to protect competition in this vitally important industry." Kohl is the ranking Democrat on the Senate antitrust subcommittee.

A group of 10 members of Congress--five Republicans and five Democrats--sent EU Competition Commissioner Mario Monti "an open letter" invoking the 1991 "comity agreement," which called for antitrust officials on both continents to work together and, according to the letter, "generally says that the United States should take the lead in overseeing American companies."

The Congressmen took note of the earlier antitrust agreement hammered out between Microsoft and the DOJ and added "that this case involves a U. S. company, that the complaining parties in the EU were primarily U.S. companies, and that all of the relevant design decisions occurred in the United States." Among the Congressmen signing the letter--none of the 10 is from Microsoft's home state of Washington--were Robert Wexler, (D.-Fla.) and Peter King (R.-NY.)

Microsoft has said it will appeal the EU decision. Its lawyers have said they expect the tough sanctions imposed by the EU will be stayed while the decision is appealed, although the EU has indicated it wants the sanctions carried out within three months.

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