Today, the European Commission dealt a blow to technological innovation in its antitrust ruling against Microsoft. Headquartered in Washington state, Microsoft is a leader in job creation and economic growth in the Puget Sound region and today’s ruling will negatively impact on the economy there.  Congressman Adam Smith released a statement expressing his disappointment that efforts to settle this case have failed.

“Today’s ruling by the European Commission is based on protectionist policy, not on sound economic principles.  This ruling is an unprecedented action on an American company and it will force Microsoft to disclose to its European competitors its most valuable intellectual property assets, thus severely reducing the impact of research and development, which has helped to fuel our nation’s gains in technological innovation in recent years.

The Commission’s ruling also requires Microsoft to develop and distribute a substandard version of its popular Windows program: a version which all software code used to play audio and video has been removed. To have a government entity force a private company to spend millions of dollars designing, manufacturing and selling a product that is inferior is not only fiscally irresponsible but is simply preposterous.  There is no conceivable basis to believe that forcing Microsoft to offer a degraded operating system will promote competition in the European Union.  Rather, this form of government intervention will hurt innovation by tarnishing one of the world’s most recognizable and reliable computer operating systems.

Microsoft worked hard to reach an agreement that would address the European Commission’s concerns, proposing a settlement offer last week that would have offered far more choices and benefits to European consumers. I would urge the Departments of State, Justice and Commerce to encourage their European counterparts to resolve this case in a matter that does not harm U.S. workers, particularly those in the Puget Sound region, U.S. consumers and the American IT industry.”