'Forum shopping' Microsoft

The lessons that free-market principles bring innovative products around the world and power the U.S. economic engine don't always play out in the European Union, as is the case with the antitrust decision against Microsoft.

Microsoft's competitors first took on the Redmond, Wash.-based company in the marketplace and lost. They went to the U.S. courts and lost. They went to U.S. regulators and lost. Now that the competitors have exhausted their domestic recourses, they have turned their eyes to what they hope are the more hospitable shores on the other side of the Atlantic Ocean.

The European Union has now handed Microsoft's competitors at least a partial victory--something they were unable to achieve through free and fair competition in the market. In so doing, the European Union will undermine the principles of global economic cooperation and will further deepen the chasm that separates the two continents.

The decision to interfere in a case already settled in the United States sets a dangerous precedent that threatens the future of the global economy. It is no longer possible for most firms to isolate themselves in one country and ignore all others. To be truly successful, businesses must be willing to work internationally.

Unfortunately, the EU efforts in the Microsoft case will create a second--and completely different--set of rules for the game. Though the current efforts extend only to Microsoft, there is little reason for any company to believe that EU action will always remain so limited. Indeed, similarly situated companies must be concerned about the prospect for an uneven playing field--with one set of rules for favored European companies and another used to hamper foreign competitors.

Americans must be concerned about these latest developments because they spell trouble for our own economy.

Americans must be concerned about these latest developments because they spell trouble for our own economy. To the extent that our companies are forced to compete in foreign markets with one arm--or more--tied behind their backs, their overall competitiveness will suffer. The time spent waging legal battles, customizing products for punitive rules and regulations overseas, and monitoring an ever-changing sea of obstacles erected by foreign governments takes away from the ability of American companies to innovate.

Indeed, entrepreneurs in our country are likely to think twice about proceeding into the European marketplace as long as the threat of unfair regulation exists. Without these vital engines of economic growth humming along at full speed, American jobs are at risk. Job creation and revenue growth are very difficult to achieve in a stifling regulatory environment.

Moreover, the EU actions in the Microsoft case raise the bothersome specter of government intervention on behalf of any company that fails in the marketplace. If the European Union is prepared to step in on behalf of Microsoft's failed competitors, where will the cycle end? Product competition must remain in the marketplace, not the courts.

The U.S. judge overseeing the Microsoft settlement here in this country appropriately described the sanctions requested by competitors as "market engineering" and said that certain of Microsoft's competitors "appear to be those who most desire these provisions and, concomitantly, are the likely beneficiaries of these provisions."

The actions of the European Union amount to little more than a thinly disguised attempt at forum shopping.

The actions of the European Union amount to little more than a thinly disguised attempt at forum shopping. In the old days, forum shopping was simply the effort to choose one state over another for filing a lawsuit to ensure the most favorable result. It now seems that the global economy has expanded this effort to a worldwide scale.

The principles of open competition, however, dictate that the company with the best product, marketed most effectively, ought to win. Nowhere would there be an asterisk that says if you can't win fair and square with customers, go complain to every court you can find until you snatch victory.

Forum shopping and foreign meddling seem to have replaced fair competition as the rules of the game. The net result for Americans will be lost jobs, fewer choices and economic injury.