Microsoft, EADS, BAE Systems and the EU
Going forward in this blog post, I shall be as respectful as I can be. If you see profanity or ad hominem attacks, they are deliberate, and certainly not inadvertent.
I saw it for what was: the continuation of an incredibly stupid remedy born of a need the EU felt they needed to do grab some money from a successful American company while hobbling its ability to compete in the hopes of creating or furthering the fortunes of a local champion.
But I let it go for a couple of reasons1 I will get to later.
So why the rant now?
Well, there are rumors flying around that the last two major European defense contractors, Great Britain’s BAE and the Franco-German EADS are in merger talks.
It seemed incredulous.
I mean, why would the EU allow all EU defense procurement and production to be concentrated in one company, no matter how many countries are represented in its ownership, right?
Wrong!
A closer read of the news about the proposed/potential merger revealed this nugget: the European antitrust authorities have given a preliminary nod to the project.
It was then I went ballistic!
Seriously, are you freakin’ kiddin’ me?
Are you?
Approving this merger is tantamount to the DOJ approving a merger between Boeing, Lockheed Martin, Grumman Northrop, Canadair, United Technologies, L3, Aerojet General, and the aerospace arms of GE, GM, Ford, and the exploded former Rockwell as a minimum.
Why?
Because even all those companies combined do not have as deep a reach, estimated at 95% or more, into the North American aerospace market that BAE and EADS currently enjoy in the European market.
How could firms whose combined might would have such a stranglehold on the European aerospace market be allowed to gain such a dominant position? Shouldn’t such a merger be so completely verboten that the principals of both companies would wake up in fear – sucking on their thumbs, for a minimum – if and when they dreamed up such a scheme?
Evidently not in the EU!
If you remember, current EU competition czar Joaquín Almunia, in concert with the harridan Nellie Kr’oes who preceded as commissioner, and all her predecessors, were the very ones who sat idly by while all individual firms in each EU company were folded into one national company, and then ultimately coalescing into EADS and BAE.
They found nothing wrong with that.
Yet, this is the same EU antitrust office that tried to throw a wrench into the merger of Boeing and McDonnell Douglas not too long ago, requiring them to keep the DC80/90/MD-8/MD-9 production line open as a not-too-subtle way of trying to hobble them while giving Airbus Industrie another leg up2 in competition.
What makes it worse, is that the EU is looking to heap a huge fine upon Microsoft for its oversight on browser choice3.
To crown it all, they want to do this despite Microsoft willingly inserting a browser choice menu into the forthcoming Windows 8 EU systems in an attempt to appease these bureaucratic gods of the EU.
But nooooooooo, that isn’t enough!
What Abou Almunia – doesn’t he sound like a @#$%^&*? – wants, is that Windows RT boxes be open to a browser choice as well. This despite the fact that they are tablet systems.
Funny enough, these same bastards at the EU saw nothing wrong with Apple disallowing browser choice in iPads which have about 90% of the market, or in Android-based systems, which have over 50% of the smartphone market!
However, they would allow a BAE & EADS merger.
One day, the inhabitants of the European Commission in general, and the Office of Competition in general, would attain sapience.
Not today, though.
Footnotes
1 I let that issue go, and didn’t blog about it because of a) it was an agreement Microsoft had agreed to, however onerous it was, and however nutso it seemed to me, being on the outside. b) it did make Microsoft a better company, making them revert to being able to being more innovative, and able to compete from a standpoint of weakness.2 Airbus Industrie, and its various parent companies, over the years have been found guilty several times of unfairly, unlawfully, and illegally subsidizing and manipulating aircraft prices in order to sell their wares. EADS and BAE are both primary holders of Airbus Industrie through Airbus SAS.
3 The blogosphere is rife with speculation that the idiot Abou Almunia will impose a multi-centimillion fine on Microsoft for that oversight. Mind you, fining non-European companies funds the massive, unwieldy EU bureaucracy.
© John Obeto for Blackground Media Unlimited
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