The Fair Trade Commission (FTC) announced on Thursday its acceptance of a request by Microsoft for an administrative settlement of an investigation into its alleged unfair trade practices. While the settlement attempt, if successful, would mark only the fifth such administrative settlement in the commission's 10-year history, countries such as the US have long resorted to such measures in their efforts to curb illegal monopolistic trade practices. Therefore, the decision to pursue such a remedy here does not deserve the level of attack it has been subjected to, nor is it fair for opposition lawmakers to threaten to axe the commission's budget.
In the US, a federal district court is scheduled to announce its decision on an anti-trust settlement between Microsoft and the federal government. The settlement is to be made binding by the court, because nine of the 18 states that originally filed the lawsuit have refused to accept the terms of the settlement. This group wants more out of Microsoft. In the US case the parties may disagree over the contents of the settlement, but the general consensus is still to settle the matter. This all could be seen as a process through which everybody searches for settlement terms that are acceptable to all parties involved.
While the FTC may have agreed to attempt a settlement with Microsoft, it is too early to say whether any settlement will materialize. The commission has given the company 30 days to submit a settlement proposal. If the commission finds the terms of the proposal unacceptable it could turn it down and proceed to fine Microsoft. In other words, the two sides have barely started the search for a workable solution.
The FTC has three options in cases of alleged violations of the Fair Trade Law (
This is different from US law, under which the federal government can still reach a settlement where violations can be established. In practice, as indicated by the Microsoft case in which prior courts had already found the company in violation of the anti-trust law, settlements are often a preferred remedy, especially in cases where the alleged monopolistic behaviors are not only extensive but have become deeply entrenched in the system. This is because the federal government can better draft and tailor the settlement terms to restore the market mechanism to normality without killing off the business or industry entirely.
In Taiwan, to reach a settlement under which the FTC can both participate and oversee the correction of a twisted market mechanism would also seem to be a preferred option to simply fining Microsoft. After all, Microsoft can surely afford a fine, no matter the cost. A prime reason that the company is willing to settle the case is because it does not want to tarnish its reputation by being hit with fines, not to mention what it may do for the many lawsuits the company is currently facing in other countries.
It too early to crucify and nail the FTC. Give the commission a chance to show what it can do.
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