Tuesday, September 18, 2007

Is the EU stifling or helping competition with Microsoft ruling?


Conservatives will assert that the EU anti-trust ruling against Microsoft is hurting competition, because somehow, big companies are the only companies that understand how to compete. This argument might make a little more sense if Microsoft understood innovation or actually produced something innovative, but the Microsoft of today is so much different from the Microsoft of yesteryear. With halls full of people that are former big company consultants, the kind that used to be at IBM during their decline, Microsoft is decent at protecting their market position but dreadful at producing innovation and delivering it to the market.

Unlike the US who in recent years has been much more interested in coddling big industry and helping them maintain their position instead of thinking of consumers or small companies that truly are innovative, the EU is showing an interest in fairness as well as innovation. The EU court system is still young with many competing states in the mix whereas in the US, it is a much more mature system with only one country involved. More important is the fact that lobbying is not a force in Europe the way it is in the US.

There's no need to punish big companies just because they are big and successful, but there is also no need to protect them from competition either. This EU court ruling and the signal that it sends to industry is a positive development for small business as well as for consumers. We can see what happens with industry consolidation (think telecoms or banks in the US, for example) and the lack of benefits it provides to consumers, not to mention innovation. A balance in legal systems is not such a bad idea since the US courts are so uninterested in considering competition or consumers.

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