I am addressing a subject which has become quite the hot topic this week, and that subject is the European Union’s stance towards antitrust, and the big tech firms it goes after for ‘breaching’ it. This isn’t the first post I’ve written on the subject this week, but after several heated conversations with my friends in the tech industry, I thought I would clarify my position a bit.
Disregarding my entire philosophy on competition, free market and survival of the fittest, I believe I can make a strong case for the EU taking steps to prevent monopolistic activities within its borders while keeping itself from appearing like an empire on the make.
So here it is Neelie Kroes, the top four things you can do to keep the European Union from looking like a global bully.
1. Stop making decisions that affect technology products
If you read my previous article chronicling Microsoft’s battle with the EU, you’ll see the European Union has certainly not been shy in telling companies what they may and may not do with their own products. The reality is the EU doesn’t actually have any business making technology product decisions for any business. Microsoft is a software company and Windows is an Operating System. When you realize that every other OS available includes an internet browser, why should the EU have the right to bully Microsoft into shipping without one? This isn’t anti-competitive legislation, it’s simply crippling a company to allow other, smaller firms to benefit from governmental knee-capping of a larger company’s product.
2. Levy your penalties through legitimate means
The very fact the billions in fines the EU has been collecting goes directly to its tax budget, where it’s used for agriculture, infrastructure and internal expenses doesn’t even pretend to be ethical. It’s not new either.
If you look back at the European Union’s history, import restrictions have occurred in markets other than the technology industry too. When the EU was unhappy with the quality of beef it was getting from Brazil and Argentina, Brazil, the world’s #1 beef exporter was hit with a month long import ban. Now, I know beef isn’t software or CPUs, but the penalty to the offender was clear enough. A month of lost sales to the entire EU is a huge hit. Of course, it may have had a negative impact to companies within the EU which needed the beef (or hardware and software), but that negative business relationship, as well as the increased opportunity for the competition, are just a few effects companies like Microsoft and Intel would be bending over backwards to avoid.
3. Stop filing lawsuits on behalf of other companies
Novell isn’t exactly a pauper. Neither is AMD, or the plethora of other companies which have lodged complaints leading to lawsuits against US technology companies. AMD claims it has been damaged by Intel’s ‘unethical’ practices, a line swallowed by many in the media, including the INQUIRER’s Sylvie Barak. But I say, let AMD and Intel fight it out in a US court.
I am of course biased in this opinion, but Microsoft appears to have become a punching bag and anyone who thinks their product is superior (and, lets face it, who doesn’t?) yet is still failing, is now able to blame Microsoft for its woes, turning my company into nothing but an open purse to pull money from.
That’s not to say the EU shouldn’t police firms with unethical business practices, but if the commission wanted to make the point AMD was being damaged by Intel, it should have handed over any fines incurred to AMD, instead of channeling it all back into its own treasure chest.
4. Make the laws written and consistent
Who decides who is and isn’t a monopoly? What is and is not an ethical business practice? All companies, regardless of their revenue and market share, should know that the moment they start operating businesses within the EU’s borders, there are certain clear cut rules to abide by. I hate the idea of a magical market share gauge which determines the side of the line you sit on and therefore also sees fit to decide what that status does and does not allow you to do.
A significant problem arises when one tries to define the term monopoly and quantify it. The EU has considered firms with as little as 39.7% market share “dominant” and has gone after them with vigor. The obvious solution is to write laws preventing predatory pricing, tying, product bundling*, limiting supply, price discrimination and exclusive dealing practices. One law to rule them all, so to speak.
All of this will happen when…
pigs fly out of my butt, unfortunately. Nobody is really policing this and there is little recourse for those I consider to be the real victims. Today AMD was given a great opportunity to grow its business and I do applaud that.
I would, however, have felt a whole lot better about the situation had Intel been made to write AMD the check, rather than having to make it out to the EU instead.
* Product Bundling is particularly tricky. The EU is using this to allow other companies significant advantage over more established products by preventing them from providing products to customers that are competitive with like offerings in identical categories. The practice of software bundling is predatory when companies practice “pure bundling” or “product tying.” These rules are especially sensitive to having a single rule for all companies. The current inconsistent implementation is the root of the EU’s latest problem with Microsoft that could potentially prevent them from shipping Internet Explorer 8 with Windows 7.
Don’t go to the fanboy darkside . lol 