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March 15, 2008

So That’s What The EU Does With All That Microsoft Money

Michael Arrington

167 comments »

Now I get it - The EU takes money from the Microsoft ATM with one hand, and then invests it in a sure-to-fail “Google Killer” with the other.

€99 million to Thomson and 22 other European companies to create Quaero, a multimedia search engine (Danny Sullivan notes Thomson was already in this business and then sold it off). This is on top of €120 million approved last year for Germany’s Theseus research project, which will develop and test new search technologies for the Internet.

Quaero and Theseus were originally the same project, but split in 2006 to focus on their respective markets.

The projects will need lots more funding down the road, so look for more withdrawls from Microsoft. And if that well runs dry, they can always figure out something to charge Google with and get a little of that action, too.

Of course, I’m stretching the facts here to make a point. The EU is simply allowing the French and German governments to make these investments with their own taxpayer’s money. There is no direct link between Microsoft fines and these subsidies. But the point is the same - the EU is not willing to let free markets determine winners and losers. The winners must be home grown, at any cost. And U.S. companies that have too much success in Europe seem to face a bleak choice - massive fines or government-backed competitors. It’s absurd. And it’s no wonder that many of the best European entrepreneurs keep coming to the U.S. to start companies.

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  1. Tim

    March 15th, 2008 at 11:05 am

    I fully agree that the EU support of Quaero and Theseus is complete BS.

    But what has this to do with the Microsoft case? Any proof that Quaero/Theseus gets funded only BECAUSE of the EU got the money from MS?

  2. Amit Chowdhry

    March 15th, 2008 at 11:05 am

    That is pretty hypocritical on the EU’s part. Good catch.

  3. Michael Arrington

    March 15th, 2008 at 11:07 am

    Tim - there is absolutely no connection, as I say above in the last paragraph. I’m just tying them together to make a single point. Which is, WTF.

  4. Amit Chowdhry

    March 15th, 2008 at 11:07 am

    How does Neelie Kroes sleep at night?
    http://www.news.com/8301-10784_3-9880256-7.html

  5. Paly

    March 15th, 2008 at 11:07 am

    “the EU is not willing to let free markets determine winners and losers”

    …and thus they give birth to losers. They’ve got this exchange rate burning a hole in their pockets anyhow.

  6. Adam Hyman

    March 15th, 2008 at 11:08 am

    Who is John Galt?

  7. Jesse Farmer

    March 15th, 2008 at 11:10 am

    I don’t get the point of this post, Michael. Are you upset that the EU is taking money from a US company? Do you think competing like this is “unfair?” Is there some broader, philosophical objection to the EU’s action?

    Obviously MS and Google aren’t too worried. I’m sure they just see it as the cost of doing business in Europe. And if the US model is really more productive than the European model I wouldn’t be worried either — this action by the EU is only hurting itself in the long run.

  8. un.valley

    March 15th, 2008 at 11:14 am

    if there is no direct link - or no link whatsoever - what was the point of this post again?

  9. randy

    March 15th, 2008 at 11:15 am

    THIS SORT OF THIEVERY is precisely why left Europe. Microsoft should leave Europe. Those people aren’t worth it.

  10. Joe

    March 15th, 2008 at 11:24 am

    Hey guys relax, we have a name here in the united states for this of thing,

    We call it a shake down.

  11. Tim

    March 15th, 2008 at 11:28 am

    >The winners must be home grown, at any cost.

    Are you talking about the EU or the US politicians :D

    “If you’ve been following the news over the past few days, you may have learned that congress and Americans alike are up in arms about the Air Force’s recent contract with the European Aeronautic Defense and Space Company (EADS), parent company to Airbus, to manufacture the next generation of their airborne tankers.”

    http://www.gadling.com/2008/03.....ker-order/

  12. Phil

    March 15th, 2008 at 11:29 am

    This article reeks of flamebait material to me.
    All fines in the EU go to offset individual state’s tax contributions. This is money that would have been paid by each country in the EU if the fines had not happened anyway, so suggesting that the EU is just using fines against microsoft ( and this IS what gets picked up by readers, despite the correction later on ) as a means of propping up competitors which are state sponsored is inaccurate and flamebait.

  13. RBA

    March 15th, 2008 at 11:31 am

    “Microsoft should leave Europe.”

    Then Europeans will have no choice but to use Linux (or Mac). Not so bad of a scenario if you ask me :-)

    “Those people aren’t worth it.”

    Troll…

    OTOH, I agree with Mike’s point, link or no link. In any case, Quaero is a French and German project only - other EU countries aren’t involved AFAIK (and they’d better stay that way for the sake of their own taxpayers).

  14. Michael

    March 15th, 2008 at 11:34 am

    Thankyou so much for the objective analysis. Journalism at its best.

  15. Marzipan from Toledo

    March 15th, 2008 at 11:39 am

    they just want to go from an importer to becoming an exporter. nothing wrong with that. happens in the defense industries all the time.

    however, a military doesn’t run so well without an os

  16. fesja

    March 15th, 2008 at 11:41 am

    There is no point on this post michael. You have some kind of antieuropean
    thought that makes you to write this kind of posts

    Microsoft has made a lot of illegal actions, eliminating the competence and trying to be the unique option; so the fines are the result of this position. Europe fines Microsoft, fines Nokia, fines Telefonica, fines BT, fines Deutch Telecom, etc. It doesn’t matter the origin. It fines the companies that break the law.

    And in another topic is Quaero that has NOTHING to do with these fines. Quaero is supposed to be a search engines especialized on french, german, spanish languages, trying to promote them in the results. I think it’s a waste of money, I prefer that money to be invested on another thing (like renovable energies), because Google works perfect for me.

    But it’s stupid to think that “the EU is not willing to let free markets determine winners and losers.” Common guys, we have lots of american companies here and we are glad to have them. I can’t understand why some of you have so a antieuropean prejudgement.

    Think about that and visit Europe to discover the truth (as I’ve been to many states of America to know you better :-) ).

  17. gk thiyaga sundaram

    March 15th, 2008 at 11:52 am

    healthy competition always leads to a constructive results which benefit the people as well as US AND EUROPE.

  18. Lcx

    March 15th, 2008 at 11:54 am

    You’re right when you say that “the EU is not willing to let free markets determine winners and losers”.

    But you’re wrong when you say that the market is free. The market is open but controlled by media like TechCrunch (and others) who give good reviews, visibility, and declare success of their friends only, like the mediocre Seesmic (have you ever heared this name?).

  19. Ron

    March 15th, 2008 at 11:56 am

    Is this subsidy OK with WTO rules.
    It’s not always going to fail. The subsidized Airbus and now Airbus parent company defeated Boeing in the refueling planes contract. $35B.

    We play fair, they don’t. What do we need WTO for?

  20. Vijay

    March 15th, 2008 at 11:58 am

    All about EU’s double standards…
    http://www.LimeAll.com

  21. Chris

    March 15th, 2008 at 11:58 am

    Protectionism - so of the US and the EU, which is the pot and which the kettle? Look to your own house before getting paranoid about the actions of others.

    As far as the fines are concerned, don’t break the law (or at least don’t get caught) and you won’t be fined. Doh!

  22. hombrelobo

    March 15th, 2008 at 11:58 am

    Worst article at Techcrunch. Ever. Pure BS.

  23. Max

    March 15th, 2008 at 12:00 pm

    Michael, I have to say I am disappointed with this article, I think your cynical reasoning on the EU and Microsoft is out of character for TechCrunch.

    Let’s stick to technology and not get carried away this us against them thinking, because reality is a lot more complex than that.

  24. Londoner

    March 15th, 2008 at 12:00 pm

    Agreed with the base of Arrington’s post. At the end of the day, it’s only the German and French tax payers who are losing out on this nonsense, but it’s unfair to blame Europe as a whole for this. America itself is becoming very protectionist in its policies (Dubai World Ports, SWFs buying stakes in investment banks, USAF/EADS refuel order etc etc), and it’s a bit of a rich post considering TechCrunch has endorsed Barack Obama as its presidential candidate.

  25. Timmi

    March 15th, 2008 at 12:02 pm

    So, Michael Arrington ist Antieuropean. Interesting … or a big Microsoft Fan? Microsoft is a serial law breaker. They should blame themself …

    I don´t think good of Quaero und Theseus, either. But both are not european projects, they are german and french projects. At least Theseus seems to me more like a research program. And at least here in Europe it is not uncommon that the state is financing research projects …

  26. Aweb

    March 15th, 2008 at 12:15 pm

    Sorry but this post is totally antieuropean. You quite lost my respect..

    I don’t hate Microsoft but their deals force computer sellers into not including any other os preinstalled. This is totally anticompetitive.

    I’d add that the Quaero engine is one of the UE’s projects, such as Galileo. If they launch a project, they have to fund it, and it’s not with Microsoft’s money.

    Thanks,
    Aweb

  27. Clive

    March 15th, 2008 at 12:23 pm

    There is an old saying “People in glass houses should not throw stones”. The US is just as bad when it comes to funding businesses. The CIA has its own VC fund. So why is it OK for the CIA to invest in companies but not for the French or German governments.

    The US government has a wealth of funding available for businesses and universities. Check out this US government site: http://www.grants.gov/ and note the first sentence “Grants.gov is your source to FIND and APPLY for federal government grants.” There is $155.5 Billion available in the form of grants from the US government to small businesses.

  28. Llew Claasen

    March 15th, 2008 at 12:37 pm

    Michael, if there’s absolutely no connection, then what’s the point of this post? Seems a little light on logic and the facts. Where am I, Valleywag?

  29. Markus

    March 15th, 2008 at 12:43 pm

    Wow, nearly 30 comments and no Americans have used the term “socialist” in a derogatory manner yet. You’re slipping guys!

    I personally don’t see the big deal. It’s their (Germany/France) money, and if the concept is so flawed then the market will take care of it.

    Now just try and imagine what kind of world we’d live in right now if the American Government had spent the BILLIONS of Iraq war dollars on tech start-ups over the past five years.

    As for the ‘Microsoft=Victim’ angle of the post. LMAO!

  30. JB

    March 15th, 2008 at 12:46 pm

    I am very disappointed by this post. I am reading your blog because of the tech reviews, not because of some lame political blah blah. I thought that you were open minded, but by reading this post I am afraid that you will end up in this group of people (that can be found in every country of the world) that don’t know nothing about their neighbor (and therefore are afraid of them). Please, travel and live in some different places and learn about other people before writing this kind of thing you don’t know nothing about.

  31. Efrost

    March 15th, 2008 at 12:53 pm

    No offence, but this is a superficial article.

  32. Michael Arrington

    March 15th, 2008 at 12:57 pm

    eFrost, no offense taken. but it really is pathetic when governments put rules in place to stop entrepreneurs from doing their thing, and then massively fund existing big companies to do exactly what the entrepreneurs would have done anyway, only better.

  33. Frank Church

    March 15th, 2008 at 1:00 pm

    Ugh, you people settle down, this is just the TC weekend linkbait. Don’t u ppl ever learn?

  34. Augustus Franck

    March 15th, 2008 at 1:07 pm

    Very lazy indeed. I normally find TC stimulating and thought provoking even when I don’t fully agree with the content.

    Particularly at a time when the Boeing debacle and the US approach to online gambling are in the press, it might be worth considering whether the US embrace of free markets is more talk than substance and that the EU in punishing MS is showing more backbone than DoJ because it doesn’t perceive them a home grown national champion.

    Perhaps Valleywag is taking its toll.

  35. kevan

    March 15th, 2008 at 1:07 pm

    Once again, God forbid Arrington have any sort of opinion on anything, and damn him for writing a headline that gets attention, why that’s just absurd, blah blah blah… Honestly these comments drive me nuts, Mike doesn’t hate Europe, he has a criticism of the EU’s policy, get over it.

  36. Shaun

    March 15th, 2008 at 1:08 pm

    Just agreeing with others, stick to the Tech. This pathetic xenophobia has no place at all.

  37. h

    March 15th, 2008 at 1:09 pm

    The situation is even worse, if you look closely at Quaero (a project Chirac wanted, probably advised by Jean-Noël Jeanneney, head of the french national library and reknown Google hater) it is a disguised way of fueling money into two main companies, Thomson and Exalead. This is sadly the way the EU is acting, and in its wake thousands of companies are benefiting, it fuels money into so-called projects set up by its hundreds of commitees, those projects most of the time lead to no results but on the way numerous companies added revenue.

    Being european believe me you should not generalize, there are lots of quality people with ideas, it is just the system in place that makes it hard for those to succeed.

  38. Karsten Wysk

    March 15th, 2008 at 1:16 pm

    @Michael,
    If you are looking for a entertaining headline/story to make the point that funding Quaero/Theseus by the EU is a completely stupid idea, i like the article.

    However I thought TC is not a “tabloid” entertainment blog. Dont take offense but your bashing of EU anti-monopoly actions sounds like from somebody after the first semester of economics (=free market is always good) and then dropping out of university and therefore missing out the later courses (=free market is mostly good, but they sometimes fail when certain circumstances apply, e.g. great economics of scale, …). (sorry, but i also want to make a point :)

    In the case of Microsoft these “market failure circumstances” are clearly given therefore EU taking action makes perfect sense. Basically the EU is just forcing Microsoft to OPEN UP so that more entrepreneurs have access to the market. Microsoft did not comply therefore they had to pay the fine. Refer to the split up of AT&T (IN THE US(!) for a similar case).

    Still, funding big companies to build Quaero is a completely unrelated stupid decision by the EU.

    Best wishes from an German entrepreneur (meinSport.de) sometimes wishing to work in the US .. but not because of the EU “withdrawing” money from Microsoft :)

  39. Simon Rivada

    March 15th, 2008 at 1:23 pm

    This post has totally opened my eyes, Michael you have lost my respect. This is a nonsense rant coming from a guy who should stick to whatever you do best, and that is technical reviews and talking about business models.

    You should not be pointing fingers. The free US have a rapidly falling dollar, how long is it going to take before your economy crashes all together? Unemployment is rising and you have had some serious cases of Microsoft vs. the Government on somewhat the same issues as Microsoft is fined for by the EU.

    Also, the two projects have zero relance to the EU. You are ranting and it is not helping anybody.

  40. Finnsense

    March 15th, 2008 at 1:25 pm

    This is an embarrasing post. Arrington clearly knows a lot more about Tech than he does about economics and politics.

    First, arguing that allowing Microsoft to create a de facto monopoly is anti free market is non-sensical. No economist would argue that markets work well when one company is allowed to create a monopoly.

    Second, the rationale behind the Franco-German project is that Google’s search results are biased towards the US, which hurts Europe. Since Google is an absolute behemoth of a company, no private investor is going to think trying to compete with them from the ground up is a good investment. Thus, they use government funds. Obviously they don’t want to do it and it’s probably a bad idea, but internet search is not a small deal.

    Third, the US government interferes in the free market all the time when it thinks it can get away with it. The twit above who mentioned Airbus doesn’t seem to be aware of the help Boeing has got.

  41. Per

    March 15th, 2008 at 1:28 pm

    “But the point is the same - the EU is not willing to let free markets determine winners and losers.”

    I started to laugh when I read this, is this article some kind of joke? It’s more a personal blog post from Michael than anything else..

    So Michael you decided that you wanted to write an article where you wanted to very subjectively state your personal opinion that EU doesn’t support a free market (due to suing Microsoft) and that (reading between the lines) that USA is there you can find a free market (that’s why all the good entrepreneurs move there). For you to state this you took two completely unrelated things, moved them completely out of their individual context and wrote an article.

    The reason why there are antitrust laws is to protect us customers from anti-competitive behavior such as monopoly. It’s EU responsibility to make sure the corporations obey the law. It’s just surprising that we in USA hasn’t taken similar actions too, perhaps due to that the state already has gotten their money worth from Microsoft through the tax bill..?

    To take the fact that EU is sponsoring (in our view) a bad project is another story.. but also remember that each country in EU pays member fees to be part of the union and this money is later distributed back to the members through various ways, one of them is to sponsor projects performed by corporations and schools that are part of union members. The amount paid by the members of the union is multibillion amounts and it doesn’t take a rocket scientist to figure out that the fine that Microsoft paid isn’t even noticed in the EU budget at all.

    So what is my point with this comment:
    This article is not an article, it’s subjective nonsense with made up conclusions with no real justifications.

  42. Denis

    March 15th, 2008 at 1:29 pm

    I enjoyed the sarcasm and the wit - shame some of the other readers missed the irony. Of course there is no connection with the MS fine and you clearly spell out your ironic stance for the poker-faced few who might have missed it. The real point is: what the hell are France and Germany doing wasting unaccounted for and unaccountable money (but coming from us taxpayers) on funding such ventures? Leave it to the entrepreneurs and stop dreaming that business is anything to do with national grandeur!! I hope they lose it all and learn the lesson and I’m one of the unfortunate taxpayers!!

  43. Pete Baldwin

    March 15th, 2008 at 1:31 pm

    Agree. Pointless article. Inaccurate Article. And worst of all, I used to like this website. How very disappointing.

  44. randy

    March 15th, 2008 at 1:32 pm

    Markus, the prosperity in Northern CA exists because we citizens of the United States enjoy a certain security and freedom which make our home a pleasant and stable place to succeed, not as a result of your antiquated socialism.

  45. Finnsense

    March 15th, 2008 at 1:32 pm

    “shame some of the other readers missed the irony.”

    I didn’t miss the irony that you don’t know the meaning of irony.

  46. John Doe

    March 15th, 2008 at 1:34 pm

    I do not see a direct link either, which makes this article misleading, but I rather still create a startup in the US first and expand quickly into the foreign markets to prevent copycats.

  47. Michael Arrington

    March 15th, 2008 at 1:38 pm

    sniff…you guys are so mean.

  48. Opo

    March 15th, 2008 at 1:46 pm

    Very bad Post :(

    AIrbus was founded (as was Boeing) and Airbus planes are flying (as Boeing).

    Europeans (and others) have the right to have search engines not based in SF…
    Europeans and others have the right to build Galileo for not depending from the US Army for use of GPS.
    Europeans and others have the right to build High Speed trains not to depend on Us tech.
    Chines and others have the right to build Space engine not to depend on US to go in space
    Europeans and others should have the right to build TV news networks not depending from Us content ?
    Europeans and others have right to choose their own Gvmnts and to let them spend their own money, no ?
    The list is very long…
    Democratic people in the US should not forget that the rights they want for them must be existing else where ;)
    Systems and countries are different, let’s accept it.

  49. jjjj

    March 15th, 2008 at 1:48 pm

    this is just an attempt to stir up things.

    The US likes to make its own rules ( a great recent example if the anti gambling laws the US has put in place , wheres the freedom for commerce there).

  50. Bjoern Wilmsmann

    March 15th, 2008 at 1:50 pm

    Both Quaero and Theseus are ridiculously silly efforts to create a ’second Google’ (or whatever, the goals set by these projects are by no means clear: One of the companies involved talks about some Semantic Web nonsense, meaning that they want to provide a framework allowing users to manually structure their data with RDF annotations. Yeahh, just as if everyone started to manually add RDF overhead to each chunk of data, just because some German corporation allows them to.).

    After all, the outcome will be the following:
    a.) Millions of tax payers’ euros will have been burned.
    b.) There won’t be any recognisable results.
    c.) The corporations which benefitted from this - and which by the way, are by no means start-ups but well-established parts of corporate France and Germany - will laugh their asses off.

  51. Per

    March 15th, 2008 at 1:55 pm

    In other news, the Fed decides to lend $200bn to banks, which is 586 times the sums in this article. Land of the free [market]..

  52. vicente corona

    March 15th, 2008 at 1:56 pm

    ABSOLUTLY RIGHT. I, AS AN EUROPEAN FEEL ASHAMED

  53. AW

    March 15th, 2008 at 1:59 pm

    DESTROY THEM MICHAEL ARRINGTON OF SILICON VALLEY, DESTROY THEM ALL.

  54. Markus

    March 15th, 2008 at 2:03 pm

    Randy says:

    “Markus, the prosperity in Northern CA exists because we citizens of the United States enjoy a certain security and freedom which make our home a pleasant and stable place to succeed, not as a result of your antiquated socialism.”

    Congratulations, you managed to bring the (totally irrelevant) word “freedom” into the conversation. Thanks for being so predictable.

    Secondly, thanks for taking the time out for a derogatory ’socialism’ quip. This comment thread is now complete.

  55. Sneezy Melon

    March 15th, 2008 at 2:08 pm

    EU and Microsoft seem like brothers. Again, Who is John Galt?

  56. Denis

    March 15th, 2008 at 2:16 pm

    Europeans have the right of course to do anything and in particular to succeed. However by this I mean European entrepreneurs not the governments and cetainly not the unelected dictatorship that is the EC. Governments and again, in particular the EC (which is not by any measure a government) have no role to play. Leave it to the market and if you don’t like what the market is doing to you, free it up and take your chances. They won’t of course listen to me so I can only hope they get their fingers badly burned!! ! Where the US tries the same thing (aerospace, oil…) the same comments apply. Tech is not one of those areas!!

  57. Camilo

    March 15th, 2008 at 2:20 pm

    Let me see If I got it right.. so european entrepreneurs are coming to the US to start their companies because…. they find it easier here than in Europe, in which., according to the note, would probably face less competition and even be elligible to some support from their governments?

  58. Marco

    March 15th, 2008 at 2:21 pm

    “but it really is pathetic when governments put rules in place to stop entrepreneurs from doing their thing”

    Regulations are not a bad thing “per se”. Even Americans have a point where they consider “entrepreneur actions” dangerous for their own interests (remember Dubai Ports?), so do Europeans.

    So, the EU has - like the USA - its own rules; comply with them or leave. If Microsoft would stop selling in Europe, maybe the EU would beg for a return … or not.

    I really see no sane reason for these repeated Anti-EU articles.

    @Markus
    In Switzerland, we laugh our asses of every time an american talks of “land of the free” and such things. Outside of Las Vegas, I always feel like I’m in some sort of a boot camp ;-)

  59. Finnsense

    March 15th, 2008 at 2:29 pm

    “Governments and again, in particular the EC (which is not by any measure a government) have no role to play. ”

    Because? You took Econ 101 and they told you governments were all bad?

    Just as a point of fact the EU is by most measures a government of sorts. EU regulations and directives (ultimately) are law in EU countries. Plus, although the EU is not directly democratic in the same way some EU countries are, most countries joined after a referendum and it is controlled entirely by people chosen by elected officials. Indeed, given that the US system is massively driven by money and lobbies and does not respect the popular vote, you’d do well not to lecture the EU on its democratic defecit.

  60. Sebastian

    March 15th, 2008 at 2:30 pm

    What ever the point, it does not change the fact that raising VC for startups in Germany is challenging, at best.

    How ever blame that on the culture of the powerful industrialists who rather donate their money to charity (create dependcies) than foster a culture of entrepreneurship. Technically there should be enough money floating around, but unless your business does not have a plan to generate revenue from the get go, than forget it.

  61. Goodness

    March 15th, 2008 at 2:35 pm

    With “Deutsche Thomson” does TC UK mean Deutsche Telecom? :-)
    Also how do you know the search engines “will need lots more funding down the road”? Metager used to be a great German engine and worked perfect without funding. But whatever. We are here at TC. I don’t expect more.

  62. Faramarz

    March 15th, 2008 at 2:39 pm

    I can see why it would make sense for France. they’re nationalist! Any ‘western’ capitalist ideal would only invite the same American lifestyle and and culture they are trying to avoid. No offense to any of you guys, but we work like pigs in this part of the world, while they wrap up shop at noon, and spend their time drinking fine French wine and have sex.

    thats the lifestyle they rather keep then invite any fierce competitiveness. I’m fully okay with their stance. those who seek the opportunity move to the states and those who rather work part-time and enjoy their social life, stay in Europe.

  63. Goodness

    March 15th, 2008 at 2:47 pm

    @Farmarz
    30 days vacation in Germany when you are over 40 (required by law)! You got to love it!

    Back to topic:
    The funny thing is that the funding will compete with other very promising search engine startups in Europe. And that’s the real problem!
    But not only Europe, also China is funding search engines like Accoona.
    Regarding Microsoft I think $1billion in fines is just wrong. That’s not taking money from an ATM, that’s like robbing someone.

  64. Tony Arringa

    March 15th, 2008 at 3:02 pm

    Michael -

    did you know your government bombs the middle east and buys oil from the middle east at the same time?

    Who’s more stupid now?

  65. JosefVirek

    March 15th, 2008 at 3:15 pm

    ….and that is why they’re called “Old Europe”…

  66. chippy

    March 15th, 2008 at 3:19 pm

    You really think the business game hinges on government rules and free market? How cute.

  67. Tim B

    March 15th, 2008 at 3:19 pm

    Microsoft has been fined, because it has been convicted of infringing “business laws”. Just like many other european companies were, in their own domain. This has nothing to do with being as US company trying to make Business in Europe, and even less to do with funding “local search” enterprise. Could we stop the US/UE conflict paranoia ?

  68. franky

    March 15th, 2008 at 3:42 pm

    Webentrepreneurs move to the US because we have no morons who throws million at yet another widget factory a very young (or still rather inexistent) VC culture.

    Most governments here support research and just like VCs they often make wrong choices. Was this post an attempt at saying that the US government doesn’t make any wrong decisions?

  69. sudara

    March 15th, 2008 at 4:02 pm

    What the EU is doing is simply sustainable and conservative.

  70. ngw

    March 15th, 2008 at 4:22 pm

    Journalism at its best.
    First of all, it seems there’s a connection between single european countries and European union, something like California and USA - oh well, this goes far from not checking facts, it’s inaccurate and completely wrong. There’s no link between Germany and France developing something together and EU projects, and even worse it seems that EU throws away Union money on silly projects just to make some USA giants lose market. Again, check your facts - one example can be EU financing the pypy project (never heard of it ? ask Google).
    And what is all these misleading informations about Quaero ? What part of “multimedia search engine” you didn’t get ? *Of course* you have to give metainformations about a *binary* (image, audio, video, whatever) if you want a better indexing. Semantic = RDF ? Where do you people heard such crap ? How do you think Google index content by License, for example ? Maybe giving semantics to content ? What if the project was about putting videos inside hAtom elements ? Just an example.
    Is it going to fail ? Maybe, but it’s not done with Microsoft money and it’s not a Google competitor (no, searching on YouTube is a bit different).
    Finally, Microsoft had to pay because they were against the law. Of course they can do us a favor and leave our market, at the end why should they care about Deutsche Bank and Italian Telecom if they can have TechCrunch or another RSS/AJAX/Put your buzzword here startup no ?
    Do yourself a favor, check facts before writing stuff like that.

  71. Jazz

    March 15th, 2008 at 4:24 pm

    SillyCrunch.

  72. roy

    March 15th, 2008 at 4:28 pm

    That´s just a US understanding of the situation. As it is in most things happening outside the US.

    Wake up, the US is just a part of the world, and for sure not the leading one!!! Do us a favour and try to walk around a little bit more quit, you made to much noise, during the last years.

    Actually there is a point of the EU government. Everybody in europe is going to support their decision.

    Perhaps it is the fact, that the EU, as well as their citizens, do understand a lot more about free access to informations and a free world, which has indeed its origin in an humanistic understanding.

    Just think about it.

    Btw. of course the closed-minded won´t understand it and give me piece of my mind!!

  73. roy

    March 15th, 2008 at 4:33 pm

    Michael, you just disqualified yourself to be one of these texas rednex!!

    Wake up!!!!!!

  74. Jake

    March 15th, 2008 at 4:39 pm

    Ok. one think regarding comment 32. Get serious man..
    As for the post itself. I truly believe that you are Sylar. lost my respect and guess what I am not even European

  75. Diego

    March 15th, 2008 at 4:42 pm

    Oh, please! Microsoft dragged their feet on the EU’s requests. So they got fined. Did you mention that? As for the US complaining about not getting a fair deal when competing in other countries, that’s the boy who cried wolf if I ever heard it. The US is just as good as any other country in protecting it’s ass when they see the need.

  76. Tim-TechFruit

    March 15th, 2008 at 4:57 pm

    I’m not impressed with the idea of Quaero and Thesus, and the market will probably decide and stay with Google but you never know - they may come up with something useful.

    However, this post was pretty incendiary and for little reason. Both the US and the EU claim to promote free trade but have various protectionist policies such as Boeing/Airus, farming and plenty etc and general mud slinging between the two doesn’t get anywhere.

    I come to TC for commentary on technology not politics. Why not wait until Quaero or Thesus develop something and then deride them specifically for creating poor products and actually stay within your niche?

  77. John Wesley

    March 15th, 2008 at 5:14 pm

    Socialism baby. Let’s just do our best to make sure the US doesn’t go the same way.

  78. Ignacio

    March 15th, 2008 at 5:21 pm

    Only if an European company starts taking monopolistic actions and the EU doesn’t fine them then you can say that EU is being unfair to US companies, otherwise just you’re just speaking BS.

    I’m pretty sure that this kind of unfounded bashing posts are the ones that attract more comments (and thus, more visits) to the site. I wonder how much intention is there… (and I wonder what am i doing commenting here)

  79. Steve Elbows

    March 15th, 2008 at 5:43 pm

    The wisdom, benefit, power & reality of the free market is overstated all the time it seems.

    In reality, even in systems where there is some free market activity, theres always big government and big business involved somewhere.

    I mean here we are on the internet, which as far as I know would have its origins in the world of military & academia where government money and big business mix. Entrepreneurs have played their important part in the evolution of computing, but they didnt really provide the high-tech foundation of computing and networks that allows web 2.0 to flourish.

  80. marc

    March 15th, 2008 at 5:46 pm

    I can’t believe you wrote that reply to eFrost!
    First this: “but it really is pathetic when governments put rules in place to stop entrepreneurs from doing their thing”.
    Doing their thing? Like ENRON did “their thing”? The Wild Wild West, yeah, right, Smit-Kroes eats people like you for breakfast Michael.
    -then: “massively fund existing big companies to do exactly what the entrepreneurs would have done anyway, only better”
    You mean like like bailing out Bear Stearns because overly greedy mortgage entrepreneurs had to be given some leeway in the past? What happened?
    HUGE deficits! Folks are losing their jobs, the dollar at it’s lowest, so
    I agree, this is a great time to polarize, to aggravate people…CONGRATS!

  81. Carlos Sanchez

    March 15th, 2008 at 6:24 pm

    mmm, like the US government blocks Chinese companies from buying American ones, anyone heard of Dubai Ports, 3COM,…

  82. Deniz

    March 15th, 2008 at 6:35 pm

    I find it somewhat bizarre that my fellow commentators complain that this is a blog post, and is Mike’s opinions. Even traditional newspapers have some of those, they even have a section on the paper called “opinions”.

    I agree with Mike’s point: They first fine MS for being “anti-competitive” and then, they try to throw money to create “home grown giants” out of thin air. What next? Government-sponsored youtube, govenment-sponsored Yahoo, govenment-sponsored Cisco, Intel, AMD? Gov-sponsored IBM, Oracle?

    The point is, they need to foster real competition at home, create an entrepreneurial environment where people can innovate new businesses. Fining Microsoft and throwing government-money at pet projects does not fix this lack of innovation and enterprise.

  83. Geopolitics: Lesson 1

    March 15th, 2008 at 6:38 pm

    Wow, finally it all makes sense:

    Europe = Socialism

    US = Free market

    I love when the world is simple!

  84. amiloggedin

    March 15th, 2008 at 6:39 pm

    Europe is a dieing continent. In two decades roughly one half will consist of pensioners, the other half of uneducated immigrated muslims. “Humanism” only carries you this far…

  85. Bob

    March 15th, 2008 at 6:45 pm

    We’ve got to nip this in the bud. If we let those Europeans get away with this we don’t know where it might stop.

    They might ban internet gambling sites because they are are ruining the profits of some of their major political donors.

    They might impose punishing duties of 29% on imports of Canadian
    softwood lumber into the United States EU.

    They might force foreign automobile manufacturers into ‘voluntary’ export quotas of cars into the US EU to protect their automobile producers.

    President Bush the EU president might impose protectionist tariffs on steel imports. The USA EU might stop Chinese companies buying American gas and oil giant UNOCAL.

    They might try to stop a foreign company, say like P&O, being sold to owners from a different country.

  86. Geopolitics: Lesson 2

    March 15th, 2008 at 6:46 pm

    Europe in 2 decades = Socialism with only muslims and pensioners

  87. Bob

    March 15th, 2008 at 6:49 pm

    So uneducated they might not know how to spell dying. Those god damn pesky non-spelling Islamic pensioners.

  88. John

    March 15th, 2008 at 7:01 pm

    #86,

    America in 2 decades = Europe today :-)

  89. Klaus

    March 15th, 2008 at 7:02 pm

    I’m very impressed by the comments, Arrington is not fully wrong but this is not white against black.

    EU is far from perfect, European Techcrunch readers know this better than Arrington but don’t forget, US company Novell for example got $536 Million from MS because of the EU.

    Bottom line, Arrington should visit Europe to learn.

  90. Shuntaro

    March 15th, 2008 at 7:08 pm

    Please, back in 1995 Motorola tried to force it’s analog cell phones on to Japanese consumers and used political forces to state their case. Japanese industry made the switch to digital and American companies were left behind. Maybe Americans should one day wake up, learn to play by the rules and then they wouldn’t have such an inferiority complex.

  91. Klaus

    March 15th, 2008 at 7:10 pm

    @Deniz

    What about DARPA, they put more than 3 Billion $ into research projects every year.

  92. Charles

    March 15th, 2008 at 7:12 pm

    Ever wonder why more Chinese are currently studying in Western Europe than in the US? What do they know that we don’t?

  93. Uncle Sam

    March 15th, 2008 at 7:14 pm

    (Continental) Europeans learn from their neighbors.
    Americans make fun of their neighbors.
    End of story.

  94. Amir

    March 15th, 2008 at 7:17 pm

    As a Brit starting a company in Silicon Valley I absolutely agree with the sentiment of the post. I have previously started a company in the UK and there is a reason I am now here.

    I think there will be a slow brain-drain to the US over the next few decades provided the US manages to turn around its own protectionist tendencies.

    Keep writing these posts Michael - it’s great fun reading the comments and you are spot on!

  95. Marty

    March 15th, 2008 at 7:22 pm

    Europe is too big a market for Microsoft not to pay the fines even if the Eu might take that money and fund other tech start ups. If those start ups ever try and cross the pond expect Microsoft’s lobbyists too make sure they have a whole bunch of roadblocks in their way. Just for a little payback.

  96. Steve Elbows

    March 15th, 2008 at 7:23 pm

    And lets not forget the myriad ways that governments of nations including the USA can provide financial support to companies. In certain countries in Europe such stuff may be done in a more overt way from time to time, but I dont really think the esential nature of the business-government relationship varies all that much across much of the globe. Governments need business and business needs government, so we have the inevitable love-hate relationship between powerful entities and the people that drive them. Those not powerful enough to join in will have good cause to complain.

    Tax breaks, research grants, helping companies win in overseas markets for profit and improved balance of trade, incentives on the local level to preserve jobs and make effective use of real-estate, contracts for goods or services, these are just some of the ways government money can find its way into the hands of companies.

    Anyway the present financial crisis will likely evolve into something so bad that governments will have to take measures so drastic that a repeat of the hysterical quacking that occured from some quarters during the 1930’s seems likely. You’l be amazed at just how quick the thin veils of free markets, globalisation etc can be swept away. When powerful illusions fade, harsh realities stagger into view. The market has no clothes on right now, and the tragedy will be too big to blame on a few bad apples this time.

  97. James

    March 15th, 2008 at 7:24 pm

    “And it’s no wonder that many of the best European entrepreneurs keep coming to the U.S. to start companies.”

    Exactly. The reason why there’s so many budding, driven Europeans founders leaving behind jobs, wives and houses to come to the Valley is because of the staid, conservative narrow-minded technical and economic climate at home.

    This is just another example of how wrong the EU can get it, the backwardness of the people with the power.

  98. Tom

    March 15th, 2008 at 7:35 pm

    This piece is great (very funny too). I agree with 99% of it. I left Europe for greener pastures here because of this very fact. The way Europe and in particular Scandinavia treats business is appalling. People think I’m joking here when I refer to Europe as Socialist and near Communist… I’m not. China is more open in many ways. Ok now everyone go back to flaming poor Mr Arrington.

  99. Tim

    March 15th, 2008 at 7:47 pm

    And don’t forget, the WWW was invented in Europe ;)

  100. ngw

    March 15th, 2008 at 8:02 pm

    http://chrischen.ca/wp-content.....nworld.png

    So that wasn’t a joke, it’s real !!!
    My god, a country (France, Germany departed 2 damn years ago) finances a research project (that actually has nothing to do with Google) and Europe in 3 seconds becomes “socialist” :D
    So weird, just in my company (Italy) we had at least 2 successful startups (successful is different than “random buzzwords and tons of VC money burned”) one of them cloned in 3 months in USA and already almost gone and without a dollar from VC/AC or EU, but I’m sure that Mr. Arrington is right.
    So funny :)
    I’m sorry guys, law is law, even for americans.

  101. hyloka

    March 15th, 2008 at 8:10 pm

    If it’s true that fines paid to the EU by Microsoft help offset the dues that member nations have to pay to the EU, then there is a link, since the governments of France and Germany had a little extra cash lying around to sink in their own home grown ventures if they had to pay less to the EU because of the MSFT fines.

    I also think that Michael makes a valid point about the different way that market power is treated in the US v. EU.

    In the US, there’s nothing wrong with competing vigorously to obtain a monopoly. In fact, having a monopoly in the US is not a violation of the law, it’s what you do with monopoly power once you have it that gets you in trouble and in the case of Microsoft led to the settlement with the US government and ongoing oversight.

    From the latest decision against MS, as well as follow-up comments, it seems that the approach in the EU is to dictate how much of the market a given company can have and seek to actively reduce the market share of companies that have obtained a monopoly.

    Not saying that one approach is better than the other, so long as the ground rules are clear from the start so that resources aren’t wasted going for market share that will be taken back by the government later. However, the EU approach seems overly paternalistic.

    The EU has always struck me as having a bit of a business inferiority complex…of course with the dollar being what it is these days we may start to see EU businesses buying market share outside of the EU. It’ll be interesting to see how EU companies handle it when they obtain monopoly power.

  102. ngw

    March 15th, 2008 at 8:26 pm

    The only problem here is that EU didn’t fine MS because of his monopoly.
    EU fined MS because they *used* that monopoly to have advantages on other companies in other markets.
    Everything was about *server interoperability* and *Windows Media Player*.
    Someone ever lived for 1 month in Europe ? We are full of companies that have a monopoly on a certain market - nobody will ever fight a monopoly, in economics it’s normal especially for new markets (isn’t it obvious ?), what MS did is making almost impossible for other companies to enter in markets *different* than operating systems.
    Why everybody is talking about something that hasn’t been understood ?

  103. Tony Chen

    March 15th, 2008 at 8:56 pm

    Hey Mike,

    Good point. I do appreciate that as a blogger you still have the guts to write something about Microsoft that isn’t anti-MSFT.

    On a side note: I (and I’m sure everyone else here,) do appreciate that you take the time to read the comments.

    Tony

  104. Tyson

    March 15th, 2008 at 9:12 pm

    Let’s face it folks, this is a classic shakedown. Any US company too succesful will be used periodically as an ATM by EU regulators.

  105. DrO

    March 15th, 2008 at 10:00 pm

    Michael, you forgot to mention that you are talking about unelected EU bureaucrats. Unelected is the key word here.

    Great post!

  106. Karl Marx

    March 15th, 2008 at 10:41 pm

    Comrades,
    America has minimum wage.
    Germany doesn’t.

  107. Roger Clemens

    March 15th, 2008 at 10:44 pm

    EU bureaucrats grill Microsoft for anti-competitive practices.
    US politicians grill the New England Patriots for filming their competition.
    It’s all about priorities, I suppose

  108. Uncle Sam

    March 15th, 2008 at 10:46 pm

    How many of you proud Americans drive American cars? End of story.

  109. Bill Gates

    March 15th, 2008 at 10:54 pm

    Stop!

    Ever wonder why Microsoft is now going after Yahoo? You know, they could wait after George Bush leaves office so why don’t they? Oh, could it be that the next US president would go after the deal on antitrust grounds?

    America is full of idealists and not enough realists. Your next president will be 100% socialist.

    Better move to whatever Capitalist enclave is left.

  110. Fozzy Bear

    March 15th, 2008 at 10:59 pm

    Wait a sec, is the socialist EU bailing out Bear Stearns or capitalist USA? I always get confused.

  111. Woody, I'm going to steal your girlfriend

    March 15th, 2008 at 11:02 pm

    France has over 1 million entrepreneurs and they’re not all real estate agents flipping homes feeding off sub-prime loans. Maybe Americans should start learning French instead of Spanish.

  112. Tarkan

    March 15th, 2008 at 11:13 pm

    Let me see, Turkey, Poland, Bulgaria, Ukraine, Romania, Belorus, Latvia, Lithuania, Estonia have either joined or want to join the EU.

    Surely there is a country wanting to join the US? What, there is no country in the world that wants to join the US? We’re not all puritans — look at the NBA and John Daley. And look at Borat, he likes USA very much.

  113. 113.com

    March 16th, 2008 at 12:11 am

    China won’t do this to Microsoft, at least not this way. :P

  114. Jason

    March 16th, 2008 at 12:21 am

    slow news day?

  115. Matt

    March 16th, 2008 at 12:35 am

    I can’t believe I’m reading this kind of posts on techcrunch… this must be some kind of an experiment. I don’t know, maybe a scam test to spur european readers’ reaction. I have great respect for techgrunch and I can’t believe it’s becoming the IT version of TMZ.

  116. james

    March 16th, 2008 at 12:42 am

    If the French and Germans really want to waste their money on search engines, then perhaps they should go and buy Yahoo! Now that really would be a dumb idea. :)

  117. Martin Owen

    March 16th, 2008 at 12:59 am

    Well actually look at it another way….

    How much would it cost to buy Google? Hmm $305 seems a bargain.
    But ahhh Google is only worth that much ‘cos of its revenue…
    How much of that comes from the EU consumer? Could some be kept in Europe?

    There is no doubt that search of the internet is also strategic. Is it a good idea that all search engines are in US hands - after all Google, Yahoo and others have been known to bow to (some) government pressures (see China)…. should we trust these guys forever. Just suppose that some US president wanted to do something absurd like invade some Middle Eastern Country (unlikely I know) against the interests of European nation…. they wouldn’t want to put pressure on us would they? Wouldn’t they want to stop people eating French fires….

    And ….. thre is justified criticism for Google Books for instance in its anglo-phone centric view of the world… We don’t all have English as our preferred language.

    So state subsidy might upset some of the budding entrepreneurs out there…. well actually there are good reasons for this age old tradition of sunsidising the development of risky or strategic technology… and it is no reason why it needs to be confined to the defense industries.

  118. Alexander

    March 16th, 2008 at 1:13 am

    The foundations of the EU is great; free movement of people, capital and goods. Co-operations on some issues such as environment and crime is also admirable.

    Apart from these two there is alot to the EU that I, as a citizen, detest; the common agriculture policy [farm subsidiaries], intervention in things that shouldn’t be decided on intra-government level, the Strasbourg offices [www.oneseat.eu] etc.

    /Sweden

  119. Johan

    March 16th, 2008 at 1:14 am

    Just a reflection of free markets and free trade,

    “The Section 201 steel tariff is a political issue in the United States regarding a tariff that President George W. Bush placed on imported steel on March 5, 2002 (took effect March 20). “

  120. PietroDG

    March 16th, 2008 at 1:50 am

    “But the point is the same - the EU is not willing to let free markets determine winners and losers. The winners must be home grown, at any cost. And U.S. companies that have too much success in Europe seem to face a bleak choice - massive fines or government-backed competitors.”

    This is simply untrue.

  121. Lou Dobbs

    Mar