FE Editorial : Cross-Atlantic uncertainty

Jan 12 2013, 00:33 IST
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SummaryDiffering verdicts in US & Europe could harm tech firms.

If technology companies like Microsoft, Apple and Google have learnt one thing over their seemingly endless litigations against each other, it’s that a legal battle won in the US has no bearing on the same fight fought in Europe. The divergence between the US and European views on abuse of dominance were first made clear with the cases levelled against Microsoft. In the 1990s, a case was levelled against Microsoft claiming it abused the dominance of its Windows operating system by giving preferential treatment to its own Internet Explorer browser and Media Player. The case in the US went in favour of Microsoft—that is, no fines were imposed, and only minor changes were implemented. In Europe, however, the European Commission levelled a whopping 497 million euro fine on Microsoft in a similar case. The latest instance of such a mismatch of verdicts is likely to be the case against Google for the perceived abuse of dominance of its search engine. Google’s critics claimed that Google Search unfairly gave prominence to Google’s services over its competitors’. The US Federal Trade Commission this month more or less exonerated Google of most of the blame, subject to minor changes Google volunteered to make. However, according to the vice-president of the European Commission, Joaquín Almunia, the verdict in Europe for the same case is going to be very different. Though the European case is still not done, Almunia expects the European Commission will order Google to drastically change its practices or face a hefty fine for “diverting traffic” away from its competitors.

Even in patent infringement cases, there is a huge divergence between the US and Europe. Last year, a US court had ruled that Samsung had copied some of the designs for its Galaxy Tab 10.1 from Apple, and banned the tablet’s sale in the US. A day earlier, a judge in the UK ordered Apple to post a notice on its website and in several British newspapers highlighting a recent ruling that Samsung hadn’t copied Apple’s iPad. Clearly, competition and patent laws in the US and Europe have to come to terms with the new technology landscape. Otherwise, these laws—created before it was conceived that a single company like Google could become so dominant in e-commerce, and the market for highly-similar tablets would become so huge—will only add to the uncertainty facing technology companies.

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