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Democracy & Technology Blog EU fining successful American companies

The European Union’s first financial penalty against any company for defying antitrust orders, according to the Wall Street Journal, was levied against an American company in the amount of €280.5 million.

When politicians have to deliver disappointing news, they like to employ nuance. Take, for example, the EU’s Commissioner in charge of competition, Neelie Kroes, who visited Washington, D.C. in March and began her comments to a group of antitrust lawyers with: “I am sure you are aware, the top priority in Europe at the moment is to boost the number of jobs and the quality of the jobs. Competition policy has a lot to contribute to this agenda…”

Then there was the visit Kroes made to New York last September, where she said:

I am aware that it is often suggested that — unlike Section 2 of the Sherman Act – Article 82 is intrinsically concerned with “fairness” and therefore not focused primarily on consumer welfare. As far as I am concerned, I think that competition policy evolves as our understanding of economics evolves. In days gone by, “fairness” played a prominent role in Section 2 enforcement in a way that is no longer the case. I don’t see why a similar development could not take place in Europe.

Of course it is artfully stated, but the message seems to be that the goal here is to create jobs in Europe at America’s expense, and, although they know it is bad and ultimatately self-defeating economics, America is just going to have to deal with it for the time being because the EU isn’t sure what else to do.
The EU itself is unpopular within Europe — for instance, in Kroes’ own Holland, 62% of Dutch voters voted against the proposed EU constitution last year — and Europe lags in job creation and IT growth. The European Commission is desperate to demonstrate that it is something more than an expensive cost center, and Microsoft, unfortunately, was in the wrong place at the wrong time.
SeeRoundtable Conference with Enforcement Officials American Bar Association Section of Antitrust Law Spring Meeting,” Washington, D.C., March 31, 2006
SeePreliminary Thoughts on Policy Review of Article 82 Speech at the Fordham Corporate Law Institute,” New York, 23rd September 2005

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.