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.
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?
That is pretty hypocritical on the EU’s part. Good catch.
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.
How does Neelie Kroes sleep at night?
http://www.news...-9880256-7.html
“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.
Who is John Galt?
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.
if there is no direct link – or no link whatsoever – what was the point of this post again?
THIS SORT OF THIEVERY is precisely why left Europe. Microsoft should leave Europe. Those people aren’t worth it.
Hey guys relax, we have a name here in the united states for this of thing,
We call it a shake down.
>The winners must be home grown, at any cost.
Are you talking about the EU or the US politicians
“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.gadl...g-tanker-order/
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.
“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).
Thankyou so much for the objective analysis. Journalism at its best.
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
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
).
healthy competition always leads to a constructive results which benefit the people as well as US AND EUROPE.
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?).
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?
All about EU’s double standards…
http://www.LimeAll.com
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!
Worst article at Techcrunch. Ever. Pure BS.
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.
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.
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 …
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
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.
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?
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!
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.
No offence, but this is a superficial article.
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.
Ugh, you people settle down, this is just the TC weekend linkbait. Don’t u ppl ever learn?
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.
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.
Just agreeing with others, stick to the Tech. This pathetic xenophobia has no place at all.
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.
@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
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.
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.
“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.
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!!
Agree. Pointless article. Inaccurate Article. And worst of all, I used to like this website. How very disappointing.
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.
“shame some of the other readers missed the irony.”
I didn’t miss the irony that you don’t know the meaning of irony.
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.
sniff…you guys are so mean.
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.
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).
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.