The Macro Issues of the Microsoft Case

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ABOUT THE CONFERENCE

The Centre for the New Europe and the Competitive Enterprise Institute are proud to invite you to attend The Macro Issues of the Microsoft Case , a Brussels conference focusing on the risks to innovation and competitiveness of Europe ‘s embracing American-style antitrust regulation and blocking of industry institutional evolution. The half-day event, on Thursday, April 20, 2006, will bring together academics and professionals to discuss the risks of antitrust regulation in the dynamic world of high technology.

When the Competition Directorate focuses on disciplining older state-sponsored cartels that balkanized the EU economy, when it attacks state-created and protected monopolies, that is a good thing.  But antitrust actions against successful businesses, such as the European Union’s antitrust penalties against Microsoft, threaten to disrupt innovation and economic growth by substituting political management for market processes, by protecting competitors rather than competition. Americans are increasingly less confident that “competition policy”  and antitrust regulations yield any real advantages to consumers or producers—but that they offer many opportunities for firms to use government to cripple innovation or their competitors The European Court of Justice is scheduled to decide Microsoft’s appeal in late April. This decision is obviously important for Microsoft, but will have a major impact on the legal and political climate for innovation across numerous industries, throughout all of Europe .

The Microsoft case signals a move toward micro-managing the way businesses organize and re-organize over time, a profoundly anti-competitive and dangerous stance. Politicians too often take regulation for granted, unaware of the academic debate on the merits of antitrust. This conference is both timely and relevant to the broader question of whether Europe is – and whether it should – further restrict its competitiveness in a global economy.

Where the Competition Directorate focuses on breaking up the national monopolies, protected industry groups and state protected cartels, antitrust policy plays a pro-free enterprise role. Where authorities liberalize heavily regulated economic sectors (which often benefit comfortably from that regulation) consumers and citizens benefit. But when antitrust becomes regulation of corporate structure, decisions and strategy, in the in the name of “competition,” it should be challenged.

ABOUT CEI’s ANTITRUST PROJECT

Despite the wide success of economic deregulation in the transportation, communications, and banking sectors, there has been no concerted effort to reconsider the moral and economic basis of one of the oldest forms of federal intervention—antitrust. Now, flawed antitrust theories are being “exported” to Europe . A reform campaign based on the insight that antitrust is actually anti-competitive and anti-consumer is long overdue.

CEI’s Antitrust Reform Project provides fresh, critical, and comprehensive scrutiny of the conventional wisdom that antitrust laws foster competition and protect consumers.  Through targeted educational efforts, CEI seeks to question its moral and intellectual legitimacy. ABOUT CEI

Founded in 1984, CEI is a public policy research and advocacy organization dedicated to the principles of free enterprise and limited government.  CEI is founded on the belief that free markets and individual liberty best serve the public interest.

ABOUT THE CENTRE FOR THE NEW EUROPE

“The Centre for the New Europe , CNE, is Europe’s leading, Brussels based, free market think-tank. CNE is a non-profit, non-partisan research foundation. The Centre is named for the “New Europe” now being born. As an active member of civil society on the pan-European level, CNE sees itself as part of the ambition to create a free, prosperous and peaceful Europe. CNE is financially supported by interested individuals, foundations and corporations. CNE does not seek and would not accept donations from any government or the European Union.”

ACKNOWLEDGEMENT

We are grateful to Microsoft for offering financial support for this event. While the Microsoft case is a catalyst, our goal is not to defend Microsoft as such but rather to use the opportunity of the Microsoft case to clarify the risks faced in Europe of accepting the idea that activist, interventionist competition policy regulations (much like those contemplated in France to force interoperability with Apple’s iTunes) are likely to improve Europe’s competitive position. Thus, the title—The Macro Issues of the Microsoft Case—which captures that thought precisely.