Adobe's decision to sue Microsoft, a fellow American company, before the EU's European Commission (EC) is just the most recent example of this disturbing trend.  It threatens consumers everywhere, invites further judicial interference with the free market, and portends increased European encroachment into American business and legal affairs.  Adobe v. Microsoft:  A Developing Litigation Paradigm

There's a new litigation paradigm developing.  American companies (generally small) sue other American companies (generally large) for business reasons, but they do it before European Union (EU) courts, rarely averse to redistribution of wealth. 

Adobe's decision to sue Microsoft, a fellow American company, before the EU's European Commission (EC) is just the most recent example of this disturbing trend.  It threatens consumers everywhere, invites further judicial interference with the free market, and portends increased European encroachment into American business and legal affairs. 

According to The Wall Street Journal, Adobe and Microsoft were engaged in private negotiations concerning Microsoft's proposed use of Adobe's Portable Document Format (PDF) in its Office applications. 

While Adobe made PDF readily-available to other software companies such as Apple, Sun, Corel, and OpenOffice, when it came to deep-pocketed Microsoft, Adobe took a different stance, demanding that it remove the feature and charge a separate fee. 

In response, Microsoft agreed to remove the feature, but refused to charge consumers separately for it.  Adobe consequently sought negotiating leverage by threatening to sue before the EC, despite the fact that neither Adobe nor Microsoft are based in Europe, neither operates major production facilities there, and neither maintains primary business locations there. 

When Microsoft ultimately refused to burden consumers and satisfy Adobe's demands, Adobe elected to make good on its threat and engaged the EC in an intra-American dispute. 

Adobe's actions should disturb Americans and consumers everywhere for several reasons. 

First, Adobe's EC complaint threatens consumer interests across the world.  As noted by Jim Prendergast, Executive Director of Americans for Technology Leadership, "the announcement last year that Microsoft would add PDF functionality to Office, which was a response to customer desires and needs for more functionality and interoperability, was applauded by consumers, businesses, and by Adobe itself." 

Prendergast adds that Adobe did an about-face despite allowing other companies to add PDF.  "The PDF functionality is already embedded in other competitors' word processors, since it is what consumers want, and Adobe has not threatened legal action against any of those competitors," he said.  Unfortunately, Adobe has decided to ignore consumer interest and instead pursue its cynical complaint.   

Second, Adobe's complaint should alarm anyone already concerned by European and international intrusion into American legal affairs.  Readers may recall the U.S. Supreme Court's recent deference to European jurisprudence in overturning several states' death penalty statutes, and multiple Justices' subsequent speaking-circuit defense of that deference. 

In similar fashion, the EC recently denied the proposed merger between General Electric and Honeywell, arrogantly and inappropriately intruding into American business affairs. 

Just this week, French President Jacques Chirac encroached upon the celebrated NYSE Group merger with Euronext by asserting that he'd prefer that Euronext merge with German exchange operator Deutsche Borse AG. 

Like Lilliputians attempting to restrain any perceived American Gulliver, European authorities seek to regulate Microsoft and other American stalwarts at every opportunity, and we should recognize Adobe's threat as just another step inviting European interference. 

Third, Adobe's complaint constitutes new judicial intrusion into business affairs and free markets generally.  As most Americans understand, litigation costs and judicial interference threatens our free market on an ever-increasing basis.  Adobe's lawsuit merely constitutes the latest example, by manipulating a forum notoriously hostile to Microsoft and American interests rather than engage in reasonable negotiation. 

This is nothing more than a bald attempt to wring money from Microsoft, as demonstrated by Adobe's permission to other competitors to bundle PDF into their products.  Moreover, Adobe's forum-shopping in the EC is no different than a trial lawyer forum-shopping in pursuit of a tort claim jackpot.  In either instance, free market interests are held hostage to the threat of stifling litigation costs and abuse of judicial authority. 

Unfortunately, as is invariably the case, consumers ultimately pay the price.  Adobe should be ashamed and immediately reconsider its decision. 

June 9, 2006
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