Competitors Again Exploit European Antitrust Rules to Undermine Microsoft's Windows Vista

On the heels of an International Data Group ("IDC") report that Microsoft's new Windows Vista operating system will generate almost 11,000 new jobs in the Washington, D.C. metropolitan area alone, Microsoft's disgruntled rivals are living by the adage, "if you can't beat 'em, sue 'em." 

Worse, these rivals are exploiting European antitrust laws, not American law.  Here we go again. 

Last week, mere days before Microsoft introduced Windows Vista to European consumers, a group of jealous competitors calling themselves the "European Committee for Interoperable Standards" ("ECIS") publicly alleged that Windows Vista violates European antitrust laws because it will lock out their own (less-popular) applications.  These ECIS members include Adobe, Inc., International Business Machines Corp. ("IBM"), Nokia Corp., RealNetworks, Inc. and Sun Microsystems, Inc. 

In other words, American companies are suing a fellow American company in sympathetic European courts. 

The reality is that ECIS members are merely leveraging the reflexively anti-American European system because it's easier than battling Microsoft in free-market competition.  For years, American companies such as these have sought European judicial intrusion into business affairs of fellow American companies.    

For instance, in 2006, Adobe, Inc. sued Microsoft before the European Commission ("EC") after private negotiations between the two companies regarding Microsoft's use of Portable Document Format (PDF) failed.  Translation:  Adobe couldn't wrench the concessions that it wanted from deep-pocketed Microsoft through one-on-one negotiations, so it sued Microsoft in Europe. 

Notably, Adobe chose not to sue other competitors that embedded PDF functionality.  Just Microsoft. 

It's bad enough that these American companies seek European bureaucratic interference in order to get a leg up on rivals.  But inviting Europeans to exercise even greater control over American private companies is even more offensive. 

It is obvious to any American that Europeans resent American competitive supremacy, and see their courts as one method to cut American icons like Microsoft down to size.  From denying the proposed General Electric/Honeywell merger, to forcing Apple to allow competitors' songs onto iPods, Euro bureaucrats never resist an opportunity to lash out at American giants. 

Perhaps the most unfortunate aspect of this confrontation is that Windows Vista promises great benefits to consumers and the public at large. 

Just this month, the IDC, an international technology services organization, issued a report quantifying the economic impact that Windows Vista will have upon the greater Washington, D.C., Virginia and Maryland market alone.  IDC calculates that Windows Vista, the first major new operating system released for personal computers since Windows XP in 2001, will be installed on 90 million computers worldwide, and 1.7 million computers in the Washington, D.C. area. 

As a result, Windows-related employment is expected to jump by some 11,000 jobs in the Washington, D.C. area alone.  Further, according to the study, Windows Vista-related employment will reach 17% of total information technology employment in the area within just its first year.  Perhaps most important, the study finds that for every dollar of Microsoft Windows Vista revenues, Washington, D.C. area companies using Windows Vista-enabled hardware will make $19.49. 

The reason the IDC study is important is that it illustrates the dynamic effect of innovative products and technologies like Windows Vista in our global economy.  Various companies that invest in novel technologies use them to improve their own products, and the public in turn chooses to purchase those products to improve their own lives and businesses.  Using Windows Vista as an example, these independent businesses can do such things as resell Windows Vista, sell other software that runs on Windows Vista or offer other services that utilize Windows Vista. 

The results, as stated by the study's authors, are "cascading economic benefits."  These dynamic wealth-enhancing economic effects are true of all innovation, not just Microsoft Windows.  It just so happens that Microsoft stands as an American software juggernaut that is particularly vulnerable to European bureaucrats' anti-American sentiments. 

This new litigation paradigm of American companies suing other American companies in foreign courts promises ominous future consequences if not stopped.  As always, consumers will pay the ultimate price if it is not.