The Bush administration on Wednesday hit out at the European Union for imposing taxes on imports of certain electronics in alleged violation of an existing trade agreement.
U.S. Trade Representative Susan Schwab said the United States has filed a formal complaint with the World Trade Organization, which means that U.S. and European officials now have 60 days to consult about the dispute. If they don't reach a resolution at that point, the United States can call for a panel to determine whether the EU is complying with its World Trade Organization obligations under the 1996 Information Technology Agreement (PDF).
U.S. Trade Representative Susan Schwab
(Credit: U.S. Trade Representative)The ITA, as it's known, counts 71 signatories, including Japan and China, and dictates that a "wide range" of high-tech products must be imported duty-free, according to the U.S. Trade Representative. But Schwab said EU customs officials now claim they can charge taxes on certain products--namely, certain multifunction printers, cable and satellite set-top boxes, and flat-screen monitors--because they incorporate newer features or technologies than those spelled out in the original agreement.
"The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products," Schwab said in a statement. "Therefore, we urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation."
Schwab said the U.S. has been raising its concerns with EU officials for the last 20 months but has failed to see progress. She said Japan also plans to join the formal case.
EU representatives were not immediately available for comment.
American high-tech companies were quick to applaud the USTR announcement. The Information Technology Industry Council, whose members include Apple, Dell, Epson, Hewlett-Packard, and Sony, said it's concerned that European countries are currently posing taxes as high as 14 percent on imports of flat-screen monitors, set-top boxes, and multifunction printers. Approximately $70 billion of those products were exported globally in 2007, according to the USTR.
"The EU is violating the letter and spirit of the ITA, which has been the most successful, pro-innovation and pro-growth agreement of the past decade," said John Neuffer, an ITI vice president. "The EU is taxing innovation by removing products from the ITA's zero-tariff status simply because companies have found ways to improve them for businesses and consumers."
I read this article on European Commission chief Neelie Kroes last night, and Tuesday morning woke up to news that the European Union is set to levy even more fines against Microsoft. Why? According to Bloomberg News:
European Union regulators may fine Microsoft Corp. for failing to comply with a 2004 antitrust order to charge "reasonable" fees for patent licenses on operating system software, three people familiar with the matter said. The fine may be announced as soon as February 27, said the people, who declined to be identified because the decision isn't public. Microsoft said in a January 24 U.S. regulatory filing that the penalty may be as much as 1.5 billion euros ($2.2 billion).
Wow. I continue to believe that the industry is able to take care of Microsoft by itself. Ms. Kroes and the European Commission are fighting yesterday's battle, while open source and SaaS are already winning today's battle against Microsoft, step by step.
I don't believe in victory by government fiat. I believe that markets--that competitors--are more than capable of toppling Microsoft's lard-laden dominance of 20th-century markets. Open source doesn't need the European Commission's help. I won't say "no" to Ms. Kroes taking a few billion from Microsoft's bank account, but we don't need it to win.
It's ironic how different Europe can be from the United States. While the U.S. continues its mindless rampage against the future of digital distribution with DRM, RIAA, MPAA, and other acronyms designed to stuff the 21st century back into the 20th century's ideas of how to package and sell property, Europe is actually investing in that future. To be exact, it's putting $22 million toward peer-to-peer technology, in a BitTorrent-minded project called P2P-Next.
Surely European broadcasters are against the move, right? After all, research suggests that 50 percent of those using BitTorrent are doing so to steal TV shows. As one TorrentFreak blogger noted, however, European broadcasters believe this situation presents an opportunity rather than a threat:
One of the biggest names taking part is the BBC, who will use the new BitTorrent client to stream TV programs. Other partners in the P2P-Next project are the European Broadcasting Union, Lancaster University, Markenfilm, Pioneer Digital Design Centre Limited and VTT Technical Research Centre of Finland. The main goal is to develop an open source, BitTorrent-compatible client that supports live streaming.
... Read more
With all the hoopla surrounding Microsoft's capitulation to the EU's demands over interoperability (see this and this, for example, though business journalist Dana Blankenhorn rightly yawns), it's important to remember just how far the deal doesn't go.
Mark Webbink, former Red Hat general counsel, explains:
So what has been accomplished? The Commission appears to have successfully forced Microsoft to open its work group server protocols to viewable access by all, including open-source developers. It also appears to have assured that such developers will be able to implement the protocols, at least from a copyright and/or trade secret perspective. At the same time, the Commission appears to have been unable to change Microsoft's stance on the patent issue other than drastically reducing the royalty that Microsoft is to be paid. (N.B.--Having started out demanding 5.95 percent as a comprehensive royalty and finally agreeing to a low 0.4 percent comprehensive royalty, all of a sudden those "highly valuable" Microsoft patents don't look so valuable any more.)
So we are left with half a loaf, and perhaps that is the best the Commission could do under the law and under the circumstances. I, for one, just wish the Commission had gone a bit easier on the open-source rhetoric. It is misleading from the standpoint that the settlement does not resolve all or even the biggest issues that open source will have with implementing these protocols. Why give Microsoft the public relations benefit of insisting it is open source friendly when it clearly isn't? I can't wait to see the limitations of the patent pledge alluded to in the press release and how Microsoft plays that one up.
Is it positive news? Yes. Is it the news that the open-source media is making of it? Probably not. Lower royalties, but no diminution of Microsoft's anti-open source rhetoric and anti-open source patent policies. It's just cheaper to use them now, but no cheaper to litigate them.
Are we better off? I'm not so sure.
The Globalization Institute, a Brussels-based European Union think tank, has recommended the EU require all PCs to be sold without preloaded operating systems such as Microsoft Windows.
There is no reason why computer operating systems could not follow the same model as computer hard drives and processors, which comply with standards that allow for broad compatibility as well as competition in the market, said the report, which was submitted to the EU's regulatory body, the European Commission.
Such a policy would lead to increased competition and innovation in the area of computer operating systems, something the Globalization Institute report said it believes the EU is looking for.
"For two decades, Microsoft has enjoyed monopolistic power in the operating system market. The Competition Commissioner has signaled the desire to see more competition in this sector. Unbundling would foster a competitive market, increase consumer choice and reduce prices," said the Globalization Institute report (click here for PDF).
The signal the institute refers to is the September 17, 2007, ruling in which the EU's Court of First Instance upheld commission rulings requiring Microsoft to share certain technical specifications with rivals and to offer customers an unbundled option in cases where Microsoft has tied together two separate products. The court ruling also upheld a $613 million antitrust fine against Microsoft that had been imposed by the European Commissioner for Competition, Neelie Kroes.
It's really hard to be a monopolist these days. That's what Microsoft found when Monday the European Union slapped down its appeal to an antitrust decision made several years ago. Apparently there are a few places on earth where money can't buy Microsoft happiness. I'm glad that one of them happens to be an enormous market like Europe. According to a story on Vnunet.com:
Microsoft is now facing a record 497 million Euros fine as well as having to pay 80 percent of the legal costs of the case.
The software giant will also have to assist its rivals with third-party integration through documentation and support, and strip its media player software from a version of Windows.
... Read more
It's unclear whether the strike will have any impact at the journal, and it seems that the action is largely symbolic. According to the release, the news staff will be coming in to work this afternoon. In other words, the reporters will be working twice as hard today to get a full day's work in half the time, and the impact on the strike will be almost non-existent. While I understand the reporter's commitment to the Journal's reputation and their subscriber's needs, I still feel that the sick out would've been more effective if tomorrow's paper simply didn't show up at homes across America as a result of today's strike.
WashTech, an organized labor group that is pushing Microsoft workers to unionize, is speaking out again, this time over the software maker's pay practices.
According to a Seattle Post-Intelligencer report, WashTech got a hold of some documents that it claims represent Microsoft's pay plans. The paper reports that the documents appear to show no pay increase for several ranks at the bottom of Microsoft's pay scale.
"In terms of what they're paying out in annual increases to employees, they're trying to hold the line well below 3 percent a year," WashTech president Marcus Courtney told the paper. Microsoft, for its part, told the paper that its pay is "highly competitive in the industry."
- prev
- 1
- next
