[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[Senate]
[Page 4851]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 THE EUROPEAN COMMISSION AND MICROSOFT

  Mr. ALLEN. Mr. President, I rise to address the European Commission's 
antitrust action against Microsoft. It is my understanding that 
antitrust authorities for the European Union member nations have given 
European Competition Commissioner Mario Monti their unanimous backing 
for a formal commission finding that Microsoft abused its market share 
of its Windows operating system for personal computers to leverage its 
way into related markets for networking and multimedia software. It is 
expected that the European Commission will hand down a formal decision 
finding that Microsoft is in violation of European Union antitrust 
laws.
  By imposing harsh, unprecedented penalties upon Microsoft, the 
Commission has extended its view of competition and regulation beyond 
Europe and onto the United States--to the detriment of U.S. laws, 
industry and consumers.
  For many years, the European Union and its member states have 
criticized the United States for adopting laws and regulations that, in 
the view of European policymakers, have had an extraterritorial reach. 
The European Commission in particular has consistently urged the United 
States to ensure that its legal determinations do not intrude into 
European affairs. We now have a clear example of the European Union not 
practicing what they preach.
  If the Commission rules that Microsoft is in violation of European 
Union antitrust laws, it will undercut the settlement that was so 
carefully and painstakingly crafted with Microsoft by the U.S. 
Department of Justice and several state antitrust authorities. There 
can be no question that the U.S. Government was entitled to take the 
lead in this matter--Microsoft is a U.S. company, many if not all of 
the complaining companies in the EU case are American, and all of the 
relevant design decisions took place here. I would hope that if the 
Commission were cognizant of America's legitimate interests in this 
matter, it would act in a manner that complemented the U.S. settlement. 
I fear the Commission has selected a path that places its resolution of 
this case in direct conflict with ours.
  This is not the only example of the Commission's overreaching in this 
case. In recent negotiations with Microsoft, the European Commission 
demanded that Microsoft agree to ensure that computer manufacturers who 
sell pre-installed versions of Windows also install three competing 
media players--an obligation that the Commission insisted on imposing 
not just within the EU, but globally. In spite of its objections to 
these requirements, Microsoft agreed to the Commission's approach in 
order to reach a settlement. I understand the Commission proposes to 
impose a fine of over $610 million on Microsoft--higher than any fine 
in the Commission's history. It has been suggested that the amount of 
this fine was based not only on Microsoft's conduct in the EU, but in 
the United States and elsewhere as well. One can only conclude that the 
Commission was not satisfied with how U.S. antitrust authorities and 
courts resolved the case against Microsoft, and therefore decided to 
act as a kind of supra-national competition authority by fining 
Microsoft for its conduct worldwide.
  The Commission's proposed ruling, as well as its negotiation tactics, 
is unprecedented in its scope. By proposing to fine Microsoft for 
purported anticompetitive conduct and injuries in the United States, 
the European Commission is directly challenging the adequacy of the 
United States' own antitrust laws, including the settlement that 
Microsoft and U.S. authorities reached in the U.S. proceedings. In 
fact, the obligations proposed to be imposed on Microsoft by the 
Commission are precisely the type that the U.S. District Court and the 
U.S. Department of Justice rejected as undermining consumer welfare.
  It is incumbent on the Departments of State and Justice to stand up 
not only for an important American company but more importantly for 
legitimate U.S. jurisdiction over alleged anticompetitive behavior in 
the United States. The U.S. and the EU are signatories to a 1991 comity 
agreement on antitrust issues which requires that one government defer 
to the other if the principal issues being investigated involve 
companies of one of the parties. Here, the EU is investigating a U.S. 
company based on complaints from other U.S. companies. If the U.S. 
Government does not make a clear and strong statement objecting to the 
EU's extraterritorial approach, we will lose influence and credibility 
for years to come to the detriment of all U.S. industry, as well as to 
U.S. consumers.

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