Chris Edwards
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As the American and European economies struggle, one of the few bright spots is the ongoing innovation and free-market expansion in technology industries. Thank goodness we have entrepreneurial companies such as Apple and Google generating economic growth and providing exciting opportunities for young people.

But that won’t last if governments have their way. The Washington Post today discusses government efforts to essentially turn the high-tech industry into another moribund regulated industry through antitrust rules:

European regulators last week imposed a $1.1 billion fine on a technology giant that “abused its dominant position.” The company was Microsoft, circa 1998. U.S. officials weren’t much faster. Last year, it officially closed its 14-year-old antitrust case against the software firm. As federal regulators launch fresh investigations into Silicon Valley, their history of drawn-out cases has companies on edge.

In taking on an industry that moves at lightening speed, federal officials risk actions that could appear to be too heavy-handed or embarrassingly outdated, some analysts and antitrust experts say. Indeed, in May, U.S. officials said they would step up their policing of Myspace’s privacy policies even though the company has long fallen out of fashion to behemoth Facebook.

In recent months, antitrust regulators around the world initiated cases involving Silicon Valley’s new guard — Google, Apple and Amazon.

Microsoft’s antitrust battle began in 1998, has stretched over three continents and cost the company more than $2 billion in fines.

These new efforts to impose antitrust rules on technology industries are idiotic. I say idiotic because there is a long history of government failure here. But that history doesn’t seem to make any impression on the proponents of aggressive antitrust action, who seem to be driven by legalistic ideologies, not by common sense economics or practical experience.

In Downsizing the Federal Government, I discussed some prior federal efforts to strangle technology firms with antitrust rules:

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Chris Edwards

Chris Edwards is the director of tax policy studies at the Cato Institute, and editor of www.DownsizingGovernment.org. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.

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