- The Washington Times - Wednesday, September 13, 2006

A U.S. technology trade group yesterday accused the European Union of declaring a “war on innovation” through its antitrust and regulatory policies.

At a Capitol Hill press conference, Rep. Robert Wexler, Florida Democrat, and Ronald A. Cass, dean emeritus of the Boston University School of Law, joined the Association for Competitive Technology (ACT) in calling on the Europeans to clarify what the former say are inconsistent antitrust and intellectual property practices that unfairly penalize U.S. companies.

“Whether it’s blocking the mergers of GE and Honeywell or Sprint and MCI, or legislation in France that dictates how Apple can design its own ITunes products, the EU has erected barriers to successful American companies,” said ACT President Jonathan Zuck, a former software developer.

The press conference was held to coincide with a U.S. visit by EU Competition Commissioner Neelie Kroes, who is scheduled to address a conference on international antitrust law at Fordham University in New York today.

Mr. Cass said Europe’s antitrust policy hurts both consumers and American companies, citing instances in which the 25-nation European Union has rejected mergers or has forced companies to reveal aspects of their intellectual property to allow other companies to compete.

“This is a policy that seems to want to have competition without winners or losers,” he said. “That is a form of competition that has never existed, can’t exist and won’t work in the marketplace.”

The European Union announced Monday it is expanding its antitrust investigation of U.S. chip maker Intel Corp., which it initiated in response to a claim filed by Advanced Micro Devices, a rival U.S. company.

“Europe has become the venue of choice for American companies that want to complain about their American competitors,” Mr. Cass said.

He criticized the European Union’s decision on Tuesday to warn Microsoft Corp. against bundling its own security products with its upcoming Windows Vista operating system.

“Imagine telling someone when they buy a product, ‘We want to make it less secure,’” he said.

Mr. Wexler, a co-founder and co-chairman of the congressional Caucus on Intellectual Property Promotion and Piracy Prevention, said Congress recognizes that the failure of Europe to respect the intellectual property of American companies could pose a threat to trade.

“Given the ever-growing importance of innovation in both the U.S. and Europe, anything that harms the creation of a robust intellectual property economy should be rejected immediately,” he said.

Separately, the Bush administration’s top antitrust official said foreign governments shouldn’t restrict ITunes because it risks harming innovation.

“If a firm knows it will have to share its intellectual property or be managed by a committee of government regulators, it may not innovate in the first instance,” Thomas Barnett, who heads the Justice Department’s antitrust division, said yesterday at a conference.

Apple has been targeted by authorities in France, Norway, Sweden and Denmark for only allowing music downloaded from ITunes to be played on its music players. Regulators want to allow downloaded music to be played on any MP3 player.

Mr. Zuck conceded that there is only so much the U.S. technology industry can do, but noted his group is stepping up its advocacy and working with government officials such as Mr. Wexler to make as much noise as possible. Otherwise, small businesses will suffer, he warned.

“If we were to behave this way in relation to European companies, they’d be raising holy hell,” he added.

• This article is based in part on wire service reports.

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