Alan Reynolds

The European Union is a relative novice in using threats of antitrust enforcement to collect cash and dispense favors. But inexperience is no excuse for running amok.

 Fred McChesney of Northwestern University, writing in Regulation magazine, noted that "EU antitrust enforcement includes a permanent bureaucracy, largely unreachable by individual national authority, applying and enforcing its own dictates." This must be great fun for power-mad bureaucrats, and quite lucrative.

 The EU blocked a U.S.-approved merger between Boeing and McDonnell Douglas to the advantage of their European rival, Airbus. The EU blocked potentially useful mergers between GE and Honeywell, and between Sprint and MCI, to protect favored competitors -- not competition. Larry Lindsey, former director of the National Economic Council, has warned of "the use of EU's antitrust policies against challenging American firms."

 In March 2004, EU pen-pushers fined Microsoft $620 million. Now, they are threatening to levy more fines, as much as $2.4 million a day. Why? Because they can.

 This is starting to look like a discriminatory, extra-territorial tax. Imagine if the shoe were on the other foot. Suppose the United States concocted some antitrust complaint with a European firm like Airbus and claimed the authority to extract hundreds of millions of dollars in tribute. Would Europeans put up with that?

  The latest of the EU's ever-changing complaints has something to do with Microsoft not making it sufficiently cheap and easy for those who sell Linux servers to examine (and perhaps clone) the inner workings of Windows. Who owns Windows, anyway? But these complaints come and go. The only constant is that somebody always expects Microsoft stockholders to write another big check.

 As if to distract attention from the initial $620 million extortion, the EU also forced Microsoft to offer Windows without Media Player, which nobody wanted or bought. Everyone who buys an iPod gets Apple's QuickTime player, so Media Player has ample competition. "Don't like Windows Media Player?" asks PC Magazine columnist Michael Miller. "Run iTunes, Musicmatch, Napster, RealJukebox or Winamp. ... Don't like Internet Explorer? Run Firefox, Netscape or Opera."


Alan Reynolds

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