Take a look at Tom Hazlett’s Op-Ed in today’s Financial Times, Antitrust regulators must listen to reason. Tom is professor of law and economics at George Mason University, where he is director of the Information Economy Project of the National Center for Technology and Law. Eighteen months ago, Tom, Deborah Hewitt, Colman Bazelon and I wrote the U.S. Chamber of Commerce study on telecom reform. You can find an executive summary at the Chamber’s site as well.
In the op-ed, Tom takes the French government to task for passing legislation that could force Apple’s iTunes to play on devices other than Apple’s iPods.
There is also a nationalist undercurrent to the legislation. You may remember that last summer the EU concluded that Yoghurt is a “strategic industry” when they blocked the Danone acquisition.
European regulators are increasingly pointing their revved-up antitrust sceptre at US firms. In a forthcoming paper in the Economic Journal, Nihat Aktas, Eric de Bodt and Richard Roll show that EU authorities tend to block mergers where competition to European firms, as revealed by stock market movements, is most likely. The iPod presents an inviting target.
This story, along with today’s EU announcement that Microsoft will pay a huge fine, amounts to an invitation to U.S. capital owners to leave the premises. Every government retains the right to shoot themselves, and their citizens, in the foot. They should not be surprised, however, that Europe is the slowest-growing region in the world.