US Antitrust Chief, EU Competition Chief Spar Over Microsoft

In an unusual move, US Assistant Attorney General for Antitrust Thomas Barnett issued a statement earlier this week, following the European Court of First Instance (CFI) decision in the Microsoft matter, politely but clearly dissenting from the Court's decision and implying the American antitrust system is more evolved.

"It will...be some time before the full impact of today's decision on antitrust policy in Europe will be apparent," wrote Barnett last Monday. "We are, however, concerned that the standard applied to unilateral conduct by the CFI, rather than helping consumers, may have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition."

Barnett then went on to carefully imply that the CFI may have had particular special interests in mind other than simply promoting and protecting the spirit of competition.

He went on to write: "In the United States, the antitrust laws are enforced to protect consumers by protecting competition, not competitors. In the absence of demonstrable consumer harm, all companies, including dominant firms, are encouraged to compete vigorously. U.S. courts recognize the potential benefits to consumers when a company, including a dominant company, makes unilateral business decisions, for example to add features to its popular products or license its intellectual property to rivals, or to refuse to do so."

It's that reference to "protecting competition, not competitors" that had EU Commissioner for Competition Neelie Kroes broiling mad this morning. Bloomberg news quotes Commissioner Kroes as telling reporters in Brussels, "I think it's totally unacceptable that a representative of the US administration criticizes an independent court of law outside its jurisdiction. It's absolutely not done. The European Commission doesn't pass judgment on rulings by US courts, and we expect the same degree of respect from US authorities for rulings by EU courts."

From there, Kroes indicated the gloves are officially off, as Bloomberg News cites her as having openly invited US companies seeking redress for the conduct of American competitors, to come on over to Europe where they will be more than happy to investigate their claims.

Thus far, Barnett's office has not issued a response.

In a press conference last Monday, Kroes noted that courts in both the US and Europe had confirmed Microsoft's conduct in certain markets to be anti-competitive. But immediately after referring to America, she added, "You may hear scare stories about the supposed negative consequences of this ruling for other companies and for innovation on the market. The Commission notes that the Court [of First Instance] itself has concluded that Microsoft failed to show that the decision would have a significant negative effect on its incentives to innovate. Let me be clear: There is one company that will have to change its illegal behavior as a result of this ruling: Microsoft. Other companies will benefit from increased opportunities to compete, to the greater good of consumers."

If companies remain confused as to whether the decision could impact them, Kroes added, "my door is always open."

During the formative years of the European Community, member states became familiar with the practice of plaintiffs shopping their cases from country to country, in search of the most amenable court to their pleas. Now, Commissioner Kroes appears to have hung the proverbial shingle outside her office door, for American and perhaps other countries' competitors in tough markets to come make their case. Why should American courts, the EC appears to be asking, hold a monopoly on US markets?

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