One of America's leading authorities on technology and telecom policy, Motley is a writer, television and radio commentator, political and policy strategist, lecturer, debater, activist, and policy advisor to The Heartland Institute.
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We just narrowly escaped the cronyism-infested eight years of the Barack Obama Administration. If you were a Leftist – the $4-trillion-per-year-government world was your oyster. The biggest bureaucratic favors of your wildest imaginings – were only a campaign contribution away.
Cronyism is one of the largest, slimiest critters in the Swamp against which now-President Donald Trump ran – promising to drain and dismantle. Which he – sporadically, in fits and starts – has started to do.
But as difficult as is unwinding the century-plus-long Swamp expansion – it got dramatically harder when the Obama-esque cronyism leaked out beyond our borders.
A fortnight ago we wrote of the DC Cronies working together to maximize their domestic cronyism when it comes to illegally strip-mining intellectual property (IP) protections:
“One of the other biggest…Crony beneficiaries – was Apple. You know, that tiny little $800 billion company – that really needs as much government assistance as they can muster. (Note: that was sarcasm.)
“A couple of years ago, Apple declared war on Qualcomm – and enlisted the Obama Administration to aid in the assault.
“Qualcomm had the audacity to invent the fundamental components of what makes an iPhone an iPhone – and then charge Apple to use them. To which Apple strenuously objects.
“Without Qualcomm’s inventions, Apple’s iPhone – is just a very shiny, very skinny telephone. No Internet connection. No email. No apps. No videos. None of any and everything that makes the iPhone – worth the at least $750 per Apple charges us.
“For making that $750 minimum charge possible, Qualcomm charges Apple…less than $20 per phone. Get that? For all of the essential intelligent guts combined – Qualcomm charges Apple less than 3% of what Apple charges us. Apple charges us that much – for one USB power adapter.
“And Apple doesn’t want to pay even that. Even though they signed contracts – agreeing to pay that.
“So now Apple has sued Qualcomm. And has unilaterally, preemptively declared that they won’t pay Qualcomm the tiny fraction of what they charge us. They’ll keep making the iPhones. They’ll keep charging us nearly $1,000 per for them. They just won’t pay Qualcomm for making the whole process possible.
“And all along the way – the Obama Administration Turkeys were helping Apple destroy the next generation of all things iPhone. And by extension – all things economy. And on their way out the door – they took two even worse, more damaging steps….
“What these Obama changes do – is declare a brand new government war on IP. Via antitrust law. Which is a novel, totally terrible idea. Here – and all over the rest of the global market planet.”
And there it is. Obama’s awful, crony, anti-economy assault on IP – has gone global.
China (Huawei) and South Korea (Samsung) each have domestic competitors to U.S.-based Qualcomm – working the same side of the technological IP street. Qualcomm thus far has been in the innovation lead – and thus is a target. Of the Obama Administration – and governments all over the world.
So China and South Korea are importing the Obama Crony IP Assault model (undoubtedly with other governments to follow) – to further the theft from and destruction of Qualcomm. So as to favor their domestic cronies.
In the United States, patents – like the ones Qualcomm hold and are having stolen – are by specific name protected in our Constitution.
South Korea has some pretty good laws written to protect patents. The problem is – the Korean government ignored these laws as they steamrolled and railroaded Qualcomm:
“The Korea Fair Trade Commission (“KFTC”), which is roughly equivalent to our FTC Bureau of Competition, fined Qualcomm $850+ million USD, the largest fine in South Korean history, for allegedly engaging in three types of anti-competitive activity….
“Without going into the actual merits of KFTC’s case against Qualcomm, the KFTC appears to have engaged in multiple political and procedural irregularities that should nullify its decision and fine.
“For example, the KFTC denied Qualcomm certain procedural safeguards that the Korea-U.S. Free Trade Agreement (“KORUS”) guarantees to American companies, such as Qualcomm’s right to cross-examine witnesses and right to examine all evidence in KFTC’s case file, including exculpatory evidence. The KFTC also contravened more than twenty years of industry practices and standards regarding patent royalties, i.e. estoppel. These are basic rights that are important parts of the fair and impartial rule of law, and KORUS itself.”
And unfortunately, China…is China. They don’t really have the sort of patent and process protections the U.S. and Korea have (not that the U.S. or Korea adhered to them here). So China too is steamrolling and railroading Qualcomm.
This is omni-directionally terrible.
If no one can protect the things they spend a whole lot of time and money developing – no one will spend any time or money developing anything. And our entire Information Economy – comes to a screeching, crashing halt.
If the governments charged with protecting these developments instead begin actively attacking the developers – behold, again, the screeching, crashing halt.
And that’s a free market problem – that will very quickly beget a free speech problem.
Right now, 80% of an iPhone is produced in totalitarian, anti-freedom, Communist China. Thankfully, the most important 20% – the brains that make the iPhone the iPhone – are owned by Qualcomm in the good old US of A.
If China and Korea (and the cavalcade of governments to come, all following the Obama lead) succeed in crushing Qualcomm – China will very happily have their company Huawei finish off the iPhone.
Let us imagine what an end-to-end China cell phone will look like.
Google Quietly Gives Up Its Fight To Combat Censorship In China: “Google has quietly removed a feature that warned Chinese citizens when they were searching for terms banned by the Chinese government, reports Chinese censorship watchdog site, Greatfire.org.
“For instance, when people tried to search for the term ‘freedom’ from mainland China, they would get a pop-warning from Google that said, ‘We’ve observed that searching for [freedom] in mainland China may break your connection to Google for a short while. This interruption is outside of Google’s control,’ and it would give the person the option to change the search term or search anyway.
“At some point in the first week of December, the warning stopped being displayed and the help article that explained how to use the feature was removed. This after months of games over it, where the Chinese government found ways to disable it and Google found ways to bring the warning back.”
Do you want this Chinese domestic censorship – exported globally via millions of all-Chinese iPhones?
Neither do I.
Apple’s giant pettiness and short-sightedness – is really very stupid. And our government (via our courts) – should very quickly knock them back into Reality.
Instead, our Obama government sided with the short-sighted – undermining the very essence of our $18+ trillion economy.
And served as a poisonous visual aide – for very bad governments all over the globe.
Thankfully, Obama is gone. Trump should as quickly as possible staff up the relevant agencies – to end these inertia-backed ongoing anti-economy actions.
And Trump should go global – and defend American companies getting royally fleeced all over.
It is – amongst many other very good things – precisely what “America First” is all about.
[Originally published at RedState]