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Free market vs. bureaucracy
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Free market vs. bureaucracy

BY C. Boyden Gray

In its recent decision, Europe's Court of First Instance in Luxembourg refused to suspend the sanctions placed on Microsoft by European Commission competition authorities. Microsoft will proceed with its appeal against the regulators, but the company must immediately comply with the excessive sanctions imposed by the Europeans. Even if Europe's antitrust regulators eventually lose their case, which could last several years, the marketplace damage will already have been done by the sanctions. The European courts and regulators still have not learned that they need to proceed cautiously in imposing overly intrusive government regulations. In September, this same court ruled that European regulators erred in June 2000 by blocking the MCI/WorldCom bid to purchase Sprint. But the ruling came four years too late for MCI, which long ago abandoned its pursuit of Sprint in the face of regulatory pressure. The results of the MCI decision should have demonstrated the problem with applying regulatory remedies prematurely. Unfortunately for consumers and the technology marketplace, this lesson has fallen on deaf ears. The heavy-handed ruling of the European antitrust authorities cost Microsoft more than $600 million, a record fine for antitrust violations. But even worse, European regulators have ordered Microsoft to reveal valuable software code information to rivals and strip its flagship Windows software of its audio- and video-playing capabilities. Make no mistake: This case reaches far beyond Microsoft (and its investors). If European regulators win the day in the very end, they will establish a precedent that hurts global competition across virtually all industries. Microsoft rightly argues that competition and consumers are hurt if businesses, even industry-leading companies, cannot freely improve their products. By effectively freezing Microsoft's incentive to innovate and compete in markets, European regulators limit consumer choice and remove one stick that spurs on Microsoft's competitors to create better products. Other large companies with complex, market-leading products would be wise to assist Microsoft with its appeal. In fact, in a strange unfolding of events, European aircraft manufacturer Airbus filed to intervene on Microsoft's behalf and then withdrew after news of the filing became public. Airbus' filing made perfect sense: Should an airplane manufacturer only be able to sell bare-bone fuselages and wings? By the logic of the European case against Microsoft, Airbus could be limited in how it improves aircraft with better engines, seats, galleys, and so on. Just as European regulators are set on determining what constitutes a computer operating system, so too could they regulate what defines an airplane, an automobile, a piece of medical equipment, a cell phone or any other product. It is unclear why Airbus withdrew, but it does raise some questions. Are there other large companies that want to speak out, but are avoiding the fray? The Court of First Instance has a strong track record of overturning decisions made by competition regulators, but it rarely suspends sanctions. European regulators famously blocked the General Electric-Honeywell merger in July 2001, after the transaction received approval from U.S. authorities. The Court of First Instance might yet allow the deal to proceed more than three years after the iron was hot. That decision, along with the MCI ruling, demonstrates that in the European judicial system, justice is often denied by its very delay. Microsoft is yet another victim of the court's unwillingness to take early action against excessive regulation. Will U.S. companies continue to face jeopardy in the Kafkaesque European bureaucracy? There are signs that the harshest days of antitrust regulation across the Atlantic may be waning. European regulators are standing aside and letting the Oracle acquisition of PeopleSoft proceed. In addition, the head of the competition commission, the interventionist Mario Monti, just stepped down and was replaced by the more market-friendly Neelie Kroes. This changing of the guard could help Microsoft and other American companies down the road. But antitrust harmonization between the United States and Europe should not rely on the whims of a single personality. In 2005, the Bush administration must reach out to European authorities and once and for all hammer out a more cooperative and free-market approach to antitrust enforcement. The conflicting systems are not merely inefficient. They create uncertainty and hamper competition, which costs everyone in today's global economy.

01/11/2005
European Court Forces Microsoft to Alter Its Products
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Press Release

European Court Forces Microsoft to Alter Its Products

FreedomWorks is dismayed with the European Court of First Instance’s rejection of Microsoft’s request to suspend sanctions until the appeal of the European Commission’s March 2004 decision is heard by the court. In denying the request, President of European Court of First Instance, Judge Bo Vesterdorf, will force Microsoft to provide customers in the European Union a stripped-down version of its operating system that does not include a media player, as well as providing competitors access to portions of its code to enhance interoperability. The ruling is at odds with U.S. antitrust determinations and adds a degree of uncertainty to the dynamic high-tech market. Just as disturbing, the decision may establish a precedent for future aggressive antitrust policies against American companies in the European Union.

12/22/2004
European Court Forces Microsoft to Alter Its Products
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Press Release

European Court Forces Microsoft to Alter Its Products

FreedomWorks is dismayed with the European Court of First Instance’s rejection of Microsoft’s request to suspend sanctions until the appeal of the European Commission’s March 2004 decision is heard by the court. In denying the request, President of European Court of First Instance, Judge Bo Vesterdorf, will force Microsoft to provide customers in the European Union a stripped-down version of its operating system that does not include a media player, as well as providing competitors access to portions of its code to enhance interoperability. The ruling is at odds with U.S. antitrust determinations and adds a degree of uncertainty to the dynamic high-tech market. Just as disturbing, the decision may establish a precedent for future aggressive antitrust policies against American companies in the European Union.

12/22/2004
WHAT IS THE EMPOWERMENT ZONE?
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WHAT IS THE EMPOWERMENT ZONE?

BY Jeff Wilkinson

To combat poverty in their poorest neighborhoods, the cities of Columbia and Sumter five years ago jointly applied for a federal grant that promised to deliver $100 million to the two cities from 1999 to 2009. The “empowerment zone” grants were available through the U.S. Department of Housing and Urban Development. The Columbia-Sumter Empowerment Zone became one of 15 empowerment zones in the nation. It joined the ranks of those in Philadelphia, Boston, Atlanta and other large cities. And it would be the only joint zone in the country.

12/12/2004
NAHB Symposium Focuses On Growing Shortage Of Affordably Priced Workforce Housing
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NAHB Symposium Focuses On Growing Shortage Of Affordably Priced Workforce Housing

BY NAHB

December 9, 2004 - On an issue of growing concern for the American public, a day-long Workforce Housing Symposium held yesterday at the National Housing Center in Washington, D.C. provided a forum for housing industry leaders, community advocates, employers and top government officials to discuss their efforts to solve the shortage of affordably priced housing for workers in the communities they serve.

12/09/2004
FreedomWorks Joins Property Rights Battle
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Press Release

FreedomWorks Joins Property Rights Battle

The below letter was submitted to the White House today, along with a number of news clips on the Kelo case COALITION AGAINST EMINENT DOMAIN ABUSE October 29, 2004 President George W. Bush The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear President Bush,The below letter was submitted to the White House today, along with a number of news clips on the Kelo case COALITION AGAINST EMINENT DOMAIN ABUSE

10/27/2004
Is Martinez's HUD record germane to Senate race?
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Is Martinez's HUD record germane to Senate race?

BY Brian E. Crowley

As Mel Martinez campaigns for the U.S. Senate, he passionately tells audiences a personal story that can be summed up like this: A Cuban refugee arrives in Florida at 15 without his parents or a home. Nearly 40 years later, Martinez is standing in the Oval Office being sworn in as a member of President Bush's Cabinet.

10/19/2004
Help at Home
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Help at Home

BY David S. Broder

Of all the Cabinet secretaries who have served in recent decades in Washington, none have done more to energize their bureaucracies than Jack Kemp and Henry Cisneros. Running the backwater Department of Housing and Urban Development between 1989 and 1997, Republican Kemp and Democrat Cisneros used their competitive drive and enthusiasm to draw attention to what may well be America's most neglected issue.

09/23/2004
Housing experts call for help for needy
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Housing experts call for help for needy

BY Sue Kirchhoff

WASHINGTON — In a break from harsh, election-year economic rhetoric, a bipartisan group of housing experts is issuing a joint call for tax cuts, expanded funding and other strategies to help millions of Americans stranded in substandard housing or homelessness, despite record homeownership levels.

09/23/2004
Overtime Regulations Updated
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Press Release

Overtime Regulations Updated

The Department of Labor (DOL), under Secretary Elaine Chao, has revamped overtime regulation with the “Fair Pay” initiative. With an effective date of August 23, the updated laws are a welcome change. As long as such rules exist, they should be easy to follow and understand, and should be easily enforced, reducing litigation, which is costly to both employees and employers. DOL has set up a website explaining the updates.

08/20/2004

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