Chillin'Competition

This is the claim made my 22 US Congresmen in a letter (see FinalSignedLetters) adressed to the US AAG, Christine Varney. An excerpt:

As you know, the EC ruled last month that Intel Corporation violated its competition law, but failed to cite evidence of actual consumer harm in its ruling. That ruling is the latest evidence of a troublesome trend in Europe toward regulatory protectionism. Other successful US technology companies – such as Microsoft, Qualcomm, Google, and IBM – have either faced significant fines, are under investigation, or reportedly are being scrutinized by the Directorate General of Competition (DG Comp) as a consequence of their successes

Now, there is an issue that this letter somewhat overlooks. Most of those cases originate from firm’s complaints, often lodged by rival US companies. To me, those cases look rather like attempts by  firms that have lost the market battle, to regain a competitive advantage through regulatory procedures/judicial action. Preston Mc Afee and Nicholas Vakkur have written a great paper on this issue: “The strategic abuse of the antitrust laws”, Journal of Strategic Management Education, Vol. 2, no. 1, 2005. And of course, DG Comp should refrain from following suit, on pain on disturbing the free market process. In addition, one may ponder whether DG Comp, and other regulators, are “ideally-placed” (in line with the wording of Reg 1/2003 and the applicable notices) to deal with issues that primarily involve US firms.  A final issue that is clearly overlooked by the letter: there is no European industry to protect from Intel, Microsoft, Google, and the likes…

For more on” strategic” complaints, see here.

(Image possibly subject to copyright. Source: Flickr)