Jim has blogged about the EU's persistently anti-market approach to Microsoft. The Institut Economique Molinari in Brussels has published a compelling paper titled "Does the tying and bundling of products harm consumers?" The piece appears to be prompted by the Microsoft case but points out the far broader market implications of the EU's incessant pursuit of the software giant. Here's one excerpt:

The practice of tying can have advantages as well as disadvantages for consumers but the criterion of "foreclosing" suggested by the European Commission to distinguish harmful practices from others suffers from a fatal defect: it does not allow any distinction to be made. Consequently, any decision which is based on this criterion is arbitrary. Is there not nevertheless a means of ensuring that only tying that serves consumers remains on the market? Indeed. The selection of best practices is a by-product of the competition process in a market free of any intervention. Governmental interventions in this field can only block the permanent adjustment of production to consumers' wishes.

The stake at issue is considerable and exceeds the framework of a debate on tying and bundling. It is a matter of identifying the outcome of the transfer of decisions relating to the development and the sale of products in governmental hands. At the moment where the European Commission goes as far as choosing the name of an operating system from which it forced the manufacturer to extract his multi-media player, it is advisable to recall that governments are inapt at replacing the competing process of a free market to guarantee the best possible services to consumers.

posted by Patrick Ross @ 2:05 PM | Antitrust, International, Markets: Business, Investment & Innovation, Software

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