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  • Apple vs. Samsung: Why Is the Obama Administration Involved?

    Newscom

    Newscom

    Apple and Samsung have been fighting over cell phone patents for a while. Samsung won a round in June when the U.S. International Trade Commission (ITC) ruled in its favor on certain patents, blocking sale of some older Apple products. The Obama Administration last week overturned the ruling. The Administration should have a good reason for involvement in commercial law disputes, and it hasn’t provided one.

    This is the first time in 26 years an Administration has overturned an ITC product ban. The President did so on vague national interest grounds. As U.S. Trade Representative Michael Froman wrote: “This decision is based on my review of the various policy considerations discussed above as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.”

    This kind of language could excuse almost any action. If another country took action against one of our firms and in favor of one of its own—simply by asserting it would be bad for competition and consumers—we’d want more information. That country’s protection of property rights would be in doubt, and its economic freedom would decline. The Administration’s decision to intervene is troubling and its justification inadequate.

    But wait, there’s more: Also last week, the ITC issued a fresh ruling on another set of patents, this time in Apple’s favor. The ruling means a sales ban on certain Samsung products.

    If the Obama Administration just wants more competition and consumer choice in the short term, it will also overturn this ITC decision. Banning Samsung products, whether for good legal reasons or not, will have the same impact as banning Apple products would have. It’s odd that the Administration has stepped in at all, but issuing a second veto would at least be consistent.

    If the Administration lets stand the ITC decision against Samsung, that would make it appear that what’s really going on is favoritism for an American company. Such discrimination would violate American principles and rebound against our economic interests.

    Whether it’s a better explanation for protecting Apple or a second, strange (but consistent) override of the ITC, the President’s on the clock.

    Posted in Economics [slideshow_deploy]

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