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Friday, 15th August 2008

Tech Titans or Political Pinatas: How Global Antitrust Laws String Up, Beat Down, and Hold Back America’s Leading Innovators

Tech Titans or Political Pinatas: How Global Antitrust Laws String Up, Beat Down, and Hold Back America’s Leading Innovators
Source: Pacific Research Institute
From press release:

America’s leading tech companies are increasingly under fire from antitrust laws that are being used to crush competition, according to a new report by the Pacific Research Institute, a free-market think tank based in California. Tech Titans or Political Piñatas: How Global Antitrust Laws Spring Up, Beat Down, and Hold Back America’s Leading Innovators, by PRI technology policy fellow Daniel R. Ballon, Ph.D., exposes how rival companies have abused antitrust laws to gain advantage over competitors. This practice has also been extended to foreign antitrust laws, where rival companies have teamed up with foreign governments to target American companies.

Most recently, China’s first antitrust law enacted on August 1 gives regulators unprecedented power to lock America’s innovators out of one of the world’s most dynamic markets. The laws allow foreign governments to prop up state-supported firms while punishing foreign competitors.

Under China’s new law, the Ministry of Commerce can block mergers, the Chinese State Administration for Industry and Commerce can extort foreign firms with exorbitant fines, and the National Development and Reform Commission can set prices.

Antitrust is a century old tool that gives governments the power to protect and promote a competitive marketplace. “These laws, however, have evolved so that governments now have virtually unlimited authority to manipulate dominant firms based on the complaints of competitors,” Dr. Ballon said. “These laws provide little benefit to consumers in the digital age, where monopolies are only fleeting illusions.” Low overhead costs and rapid innovation ensure that no market leader can hide from agile competitors or revolutionary new technologies, he added.

The report provides case studies of companies where such abuses have occurred: Microsoft, Intel, Apple, and Qualcomm. In addition, the report offers recommendations to help protect the future of technological innovation.

+ Full Report (PDF; 3.2 MB)


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