Sunday, March 04, 2007

US lacking in cross-Atlantic trade wars.

Yes, the title is exactly as I meant it to be. There seems to be a subtle trade war, of the underhanded kind, and the United States doesn't seem to be doing too much about it.

I'm not sure if the Europeans are following an agenda, but they seem to be systematically targeting some of the biggest players in the tech industry (basically American corporations).

The first in line, was of course Microsoft. But then, they were pulled up in the US for unfair trade practices as well, so one could say that well, they deserved it. If they used unfair methods to get ahead, then well, it is obvious that the Europeans would go after them as well. But what was interesting, was that the Europeans kept at it. The legal battles and fines went on for much longer in Europe than it did in the US. In fact, the Windows versions released in Europe were very different from what was released worldwide.

The extent to which the Europeans seemed to be taking Microsoft to task was obvious by the way American corporations like Google and Adobe would run to the European Union to complain about their impending Vista release and not to the American government/courts! They felt they had a better chance of being heard there than in their own country.

Well, considering that Microsoft was being dragged about everywhere by the European Union, the American government did not intervene and throw their support behind the company -- but then again, since they had also gone after the same company, it would seem odd if the government now changed its stance and helped Microsoft.

Of late, Google has been in the news, again in Europe, losing court battles that almost seem nonsensical - people laying claim to the local language site like, others complaining that Google cannot use the name "gmail" or something even more nonsensical like they don't want their articles to appear on Google News. In the latter instance Google was initially being fined close to a million dollars a day unless they stopped their search engines from indexing certain Belgian newspapers. Apparently they didn't like the free links from Google!

Then there's Apple. Apple is supposed to be everything that Microsoft is not - cool, revolutionary, hip, and rebellious. They supposedly are in a league of their own and are responsible for over 70% of online music sales and also own the player market with their iPods.

First, the French decided to take a shot at Apple. They passed a law, (mind you that's a constitutional change), that says that companies (like Apple) that sell digital music in France must open up their systems so that the music can be downloaded onto any device. This means that Apple will have to make their music available on any mp3 player. 

The rest of Europe seems to be following suit -- various countries that form the European Union are now pursuing Apple to open up their iTunes store.

I'm not taking side in the DRM vs non-DRM argument. I'm not even backing the record companies in this case. The socialist nature of the European Union seems to be driving them into taking periodic potshots at companies (companies that are global players, but US-based nonetheless) and maybe hurting them seriously.

I'm not a big fan of the governments stepping in and trying to crush free competition, especially when they're driven by a particular socialist agenda. The only reason these lawmakers are even considering these legislations, is because they know that the iPod/Google/Windows is very popular and the voting public will see them as taking on these software giants to help their everyday lives. Add to it, they will also have given "evil" Americans a snub in the face.

I do believe that the US government has to step in and back their corporations to the hilt. These issues should be a part of trade negotiations with the Europeans, because these problems have a serious side effect - the losses/drop in share values could affect American economy in a big way. Add to it the idea that any company, just because it is big and successful, can be a target of malicious governments the world over should not be tolerated.

This is not limited to the personal tech sector. There is the classic case of Airbus vs Boeing. The European aircraft manufacturer has been getting away with a lot of "profit" and price cutting due to subsidies it obtains from the European Union, while Boeing has been feeling the ill effects of having to compete with Airbus on unfair terms.

Then there was the hushkit issue a while ago. While all Airbus-manufactured aircraft had these installed, the European Union found a way to go after Boeing for not having this installed, which would cost the American aircraft manufacturer billions of dollars - to retrofit every aircraft that flies over European airspace!

But the aircraft industry was an instance where the US government decided to step in and support Boeing and file WTO complaints against the EU. During the hushkit fiasco, they also came down hard on Airbus on aircraft flying into the US. I guess the visible losses in income and blue-collar jobs woke up the Washington DC politicians and made them spring into action. Sadly, no such action seems forthcoming in the software/personal tech sector. The losses are not visible yet, or are in the unforseen future, and hence they needn't worry about it. Reminds me of the ostrich-in-the-sand scenario (or even the global warming issue to be honest).

The US government seems to be sleeping while their industry is facing serious problems in Europe. Perhaps it is time that the government (surprisingly an industry-friendly government in this case) wakes up and decides to do something about it.


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