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'No Alternative' To Microsoft Fine
Posted by
Zonk
on Sun Jul 16, 2006 01:26 PM
from the pay-up dept.
from the pay-up dept.
An anonymous reader writes "News.com is running an interview with Neelie Kroes, the competition commissioner for the EU. She confirms that the massive fines to Microsoft are absolutely necessary, and goes into some of the commissions reasons for slapping the giant down." From the article: "Microsoft has claimed that its obligations in the decision are not clear, or that the obligations have changed. I cannot accept this characterization--Microsoft's obligations are clearly outlined in the 2004 decision and have remained constant since then. Indeed, the monitoring trustee appointed in October 2005, from a shortlist put forward by Microsoft, believes that the decision clearly outlines what Microsoft is required to do. I must say that I find it difficult to imagine that a company like Microsoft does not understand the principles of how to document protocols in order to achieve interoperability. "
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Microsoft Hit With 280m Euro Fine 527 comments
Craig Mason writes "The BBC Reports that "Microsoft has been fined 280.5m euros ($357m; £194m) by the European Commission for failing to comply with an anti-competition ruling.
The software giant was hit by the fine following a long-running dispute between the US firm and EU regulators.
The move follows a landmark EU ruling in 2004, which ordered Microsoft to provide rivals with information about its Windows operating system.
EU regulators also warned Microsoft it could face new fines of 3m euros a day.""
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Oh boy... (Score:5, Funny)
You must be new here...
They DON'T want to be interoperable.. (Score:3, Insightful)
Re:Oh boy... (Score:5, Funny)
The principles? They cannot even grasp the concept!
Parent
Sure they do... (Score:4, Interesting)
I have heard enough of their sales pitches to know that Microsoft's concept of interoperability is simpe and they grasp it quite well: "Throw out every piece of software that you currently operate that isn't made by Microsoft and exchange it for equivalent Microsoft products. After that everyting will inter-operate just fine so long as you don't stray form the yellow brick Microsoft road."
Parent
"There's words in this, I can't understand words!" (Score:5, Insightful)
What's so hard to understand about this? This is a company which regards their software as "most secure ever" just before a several years of gaping security flaws are revealed and exploited. Many of the security flaws are in the gaps between divisions, where one division sees the appropriate way to validate passed paremeters is to trust everything is just peachy.
It's a cultural thing, sieze markets today, and bluff your way past the carnage tomorrow. e.g. revealing Windows security flaws should be halted by the Department of Homeland Security as it represents a threat to businesses which use the software (no liability is expressed or implied by the jokers who make billions selling it, however)
Microsoft should license rights to use those egg-headed Precious Moments figurines and release one each time they're caught bullshitting on trying to quash other markets with bundled give-aways or why some open standard isn't for the best. "Me sowwy!" It always has been and always will be about promoting Microsoft, to keep it relevent and necessary to guarantee the gravy train never ends. Thanks EU for having some balls, which the US DoJ doesn't.
Re:"There's words in this, I can't understand word (Score:5, Interesting)
Parent
Re:"There's words in this, I can't understand word (Score:5, Insightful)
The Department of Justice did at one point (I mean, they did win the antitrust case against Microsoft you know) but when the regime change occurred their priority system got readjusted. At least, that's how it appeared to me at the time.
Oh, obviously. It's like Bush hung out the shingle "Open for Business with Business" when the greatly watered down justice was finally meted out, and astoundingly Microsoft continues to violate even those terms with seeming impunity.
Parent
Re:"There's words in this, I can't understand word (Score:3, Interesting)
That's how this game is played, folks.
Re:"There's words in this, I can't understand word (Score:3, Insightful)
Re:"There's words in this, I can't understand word (Score:5, Informative)
I don't know about "the fundamental sanctity of Windows", whatever that means, but the reality is that Microsoft was taken to court over multiple antitrust violations, perpetrated over decades, involving multiple corporate customers and competitors, and billions of dollars. The company was convicted of those illegalities, and was then let off the hook. Say what you will, Microsoft got a free get-out-of-jail card
Parent
Re:"There's words in this, I can't understand word (Score:3, Informative)
So even under the Jackson court MS was being given an insane amount of leeway.
Re:"There's words in this, I can't understand word (Score:5, Interesting)
They said that it was the most secure Windows so far; are you disputing this?
revealing Windows security flaws should be halted by the Department of Homeland Security as it represents a threat to businesses which use the software
I can actually see the logic in that. I do not agree with it (if one person has found an exploitable flaw, chances are someone else has or will), but it's not an entirely stupid idea on the face of it (you have to think about it to realise how dangerous it is).
no liability is expressed or implied by the jokers who make billions selling it, however
Very very few software licences do not disclaim liability, the GPL included. It's extremely hard (and time consuming, and so expensive) to create software that can be guaranteed exploit-free, and this difficulty increases as the complexity of the software increases.
Thanks EU for having some balls, which the US DoJ doesn't.
Well there's one thing we can agree on. I personally think that MS's software often gets too raw a deal here, but some of their business practices are deplorable. It's nice to see that someone finally has the guts to stand up to them and actually impose the punishment they threatened them with for a change.
Parent
Re:"There's words in this, I can't understand word (Score:4, Insightful)
I wonder if the issue really is the vaunted MS protocols. Are there no clever people in the EU or elsewhere who could reverse engineer these and make them available to anyone? The EU, or any government for that matter, could amend their laws such that copyrights or patents are not violated if done for the purpose of interoperability. Even if someone distilled or even outright copied the protocols for the SOLE purpose of ensuring interoperability, their laws could be changed to allow for this. France recently went after Apple and their music DRM protocol. Instead of forcing Apple to give that up, why did they not simply rescind DRM protection laws similar to our beloved DMCA? In short order someone like DVD Jon would come up with a way of stripping DRM protections and there would be no law protecting Apple's or any other DRM system.
Doing this of course would subject everybody, including their companies to the same rules. It appears that the EU is singling out the most successful American companies and punishing them because their own businesses are not managing to compete on the open market.
Parent
How does that go? (Score:5, Insightful)
Something about "old dogs" and "new tricks."
At least this is a bit more than the wrist tap Microsoft received for its anti-trust violations in the US.
280m Euros (Score:3, Insightful)
Re:280m Euros (Score:3, Insightful)
is that even remotely as significant as the fact that someone is finally standing up to microsoft? imagine the precendent set if large corporations could thumb their noses at the law at will in the manner microsoft is doing. (yes, i know, i know.)
Re:280m Euros (Score:3)
It will simply go into the EU budget. The budget's size will remain the same, the member states have to pay less.
Re:280m Euros (Score:4, Funny)
The EU, of course.
and what are they gonna do with it?
Hookers and beer, just like always.
The more important question is where is the money going to come from?
Got a mirror?
KFG
Parent
Re:280m Euros (Score:3, Funny)
Can women block pops up for you? No. Can Firefox show you naked women? Yes
Have you tried putting a naked woman in front of your monitor? Works for me.
KFG
Re:280m Euros (Score:5, Informative)
From the FAQ [itsecurity.com]:
Where does the money go?
The penalty payment is paid into the EU Budget. It does not increase the Budget, but reduces the contribution from Member States. The fines therefore reduce the overall tax burden on individuals.
Parent
Re:280m Euros (Score:5, Insightful)
And exactly what's in it for "us", their customers? We get to pay a little more to cover Microsofts illegal activities? That's hardly a "critical feature" worth a premium to me.
1) This is bad press for Microsoft. Shareholders KNOW the price of products will have to go up to cover this, and they won't see any return on that increase. Prices and sales will have to rise much higher than otherwise for them to see a return. Companies KNOW they will ultimately pay the price for this, and they have better things to do with their money than pay higher prices to pay microsofts fines.
2) As the price goes up customers get more annoyed, their is no value increase, and microsoft doesn't even see a profit from it. (Even if microsoft does bundle new features in with the price increase, the value increase will still be diluted.)
3) If customers are sufficiently annoyed they will look to alternatives, and reduce their commitment to microsoft.
4) Meanwhile, competition is given a bit of a wedge. The tremendous advantage Microsoft has thanks to its entrenched monopoly is countered slightly by the burden the fines place on the company. When bidding against a microsoft burdened by heavy fines, the competition stands to profit more on any deal at a given price (or break even when microsoft would lose money, etc...) It doesn't level the playing field by any means, but its slightly more level than it was.
Parent
Re:280m Euros (Score:5, Insightful)
Let's say you are an MS shareholder. A company you hold stock in breaks the law, but, unconcerned, you keep your shares. After years of open non-compliance they finally get fined, a decision which was seen coming from a mi- um, kilometre away. Yet you still don't see how you have any choice or responsibility for your losses? GMAFB.
1) Consumers can choose not to buy MS products.
2) Businesses can choose not to use them.
3) Powerful shareholders can influence the board to do the right thing
4) Powerless shareholders can divest their MS stock for a company that doesn't flaut the law.
And to top it off, MS stock hasn't been doing well anyway for the past few years. Probably because major funds have already discounted the value of the long-anticipated decision in their calculations.
So bottom line, you get no sympathy.
Parent
Is the money a big deal for Microsoft? (Score:5, Insightful)
Re:Is the money a big deal for Microsoft? (Score:4, Insightful)
>If you fine Microsoft 3 million euros a day they will run out of money in. .
It's not about running out of money.
The fines aren't the end of law. You cannot simply pay fines as an alternative to staying out of
compliance with the law. There's a next level, where governments start arresting and jailing people
who *should be* responsible for that compliance, stripping of them of their personal assets, and maybe
even, ultimately, taking away a corporation's rights to do business within the jurisdiction of their law.
Parent
The Microsoft Protocol (Score:4, Interesting)
Obviously, Neelie is not a programmer and has never tried to write a program in a Microsoft environment, or even tried to figure out what their documentation is supposed to mean... If anything.
The example below is my favourite piece of Microsoftism, from the "I cannot believe that I am actually writing this" department:
IXMLDOMDocumentPtr pXML = NULL;
...
HRESULT hr = pXML.CreateInstance(_uuidof(DomDocument40));
pXML->async = VARIANT_FALSE;
pXML->validateOnParse = VARIANT_FALSE;
pXML.Release();
And yes, this compiles and works. Surely there must be other gems of Microsoft protocols out there. Any other proposals?
I believe the Comission is wrong, and the companies that are lobbying the commission to get access to these protocols are even more wrong. We should not want more software that relies on more Microsoftisms. Au contraire.
I wish I had a list of the companies that are sueing for these protocols being made public. Then I would at least know whose software I certainly do not want to buy.
Protocol, not implementation! (Score:5, Insightful)
Parent
corporate entities 'think' differently (Score:4, Insightful)
The main difference is that a corporate entity of the size of microsoft is represented by Lawyers, not engineers.
If they say say they cannot comply, and the lawyers provide lots of reasons which keep the facts in dispute, then they get to pay a nothing fine and maintain their advantage.
Losing their monopoly position would potentially mean the collapse of their major product lines, in terms of market share.
I'd be willing to bet that if microsoft the corporate entity felt this was something they desperatelly needed, they'd throw the engineers at it.
My proposal (Score:5, Funny)
I propose that there's some fund so that every time you have to spend 3 hours 'weeding' Windows for your parents or Auntie Doris or whoever you can bill the fund at $100 p/h for your time. Collectively this would make
Cash or gift vouchers? (Score:4, Interesting)
In the EU, while they don't trust in God (Score:3, Informative)
The EU's "monopoly commission" (equivalent to the FTC in the US) does have teeth, and regularly does impose fines that are larger in proportion to the company size than those imposed against Microsoft.
Most of these, however, are imposed for illegal price-fixing between different companies.
Government power v. corporate power (Score:4, Insightful)
It seems to me this is really about whether governments have the ability to enforce the laws they create. Whether EU legislators truly represent the will of the people of the EU nations is debatable, but the EU is a governmental body that in theory speaks for the people it represents. Here we have a governmental body telling a corporation that it has violated the rules of doing business. The EU isn't telling Microsoft that it can't sell its products anywhere. It is sending a clear message to Microsoft that if the company does business in the EU, it needs to do so under the EU's rules.
It isn't a surprise that collectively the EU prioritizes cultural, economic, and political issues differently than the United States, so it seems absurd to me to expect that they'll change their rules just for you when you do business there. Apple can elect to stay in the EU market and deal with the ramifications of iTunes/iPod-related legislation, or it can stop doing business there. The same thing is true of Microsoft. They make billions of dollars in Europe. They can forgo making those billions, or they can stop whining that they didn't know exactly what the EU wanted, and start complying. It's obvious what the EU wanted, and it's obvious that the EU tired of Microsoft's endless legal maneuverings. Now Microsoft is seeing that the EU is serious. Massive corporations do not have unlimited power, even when they think they do.
I got an alternative..... (Score:4, Interesting)
-Em
Re:If I were Microsoft... (Score:5, Insightful)
Parent
Re:If I were Microsoft... (Score:5, Insightful)
Wow, I'm trying to think of a better way to make a continent that's already antagonistic towards you migrate even faster to other alternatives like Linux. I can't do it. You're going to threaten to pull out of a multi-BILLION dollar market over some fines, alienating your customers and moving them to consider non-Microsoft solutions.
No, the good idea for Microsoft is to publicly bluster and privately strike a deal with the EU to come into compliance and pay a reduced fine. Microsoft essentially made a gamble and lost and will now minimize its losses.
Parent
Re:If I were Microsoft... (Score:5, Insightful)
Some idiot suggests this every time this case is mentioned. No matter how big a company you are, you can't fuck with sovereign governements. They can unilaterally write their own contracts, and enforce them with the full power of the state (i.e., all the way to lethal force). If they want MS software, they can take it and pay whatever they like.
In any case, they could use existing software indefinitely, while assessing the several alternatives begging for a chance to take the market. And that would be the end of MS's monopoly everywhere.
Parent
Re:If I were Microsoft... (Score:5, Insightful)
How about that? ''
Excellent idea. The next time some government agency in Europe has to decide whether to use open source software or Microsoft software, we can just point out that Microsoft is considering withdrawing their products from Europe, so clearly Microsoft software has to be avoided at all cost to be future proof.
Parent
Re:If I were Microsoft... (Score:4, Funny)
Parent
Re:If I were Microsoft... (Score:3, Insightful)
They get
Re:Good luck Microsoft (Score:5, Insightful)
Parent
Re:Good luck Microsoft (Score:5, Insightful)
i see government trying to foster competition in the market. what do you see that i don't?
Parent
Re:Good luck Microsoft (Score:4, Informative)
Are you stupid? I've seen your rants further up, and you seem to have no idea about the issue at all. Those products you speak of are severely hampered because they can't interoperate with the entrenched quasi-monopolist, and this is what the ruling was about: MS was ordered to document their stuff so that interoperation is possible in the interest of the user. MS didn't comply and thought they can weasle out of this. They have been fined, and rightly so.
Parent
Re:Good luck Microsoft (Score:5, Insightful)
While I agree completely that the EU is just as corrupt as any other government, I would not go so far as to say they are as corrupt as the US government. I'd like to point out that while the (total) fine of around 1 billion dollars, is very large, it is ridiculous to suggest that the EU is in it for the money. The projected EU GDP for 2006 is 13888 billion USD, and 1 measly billion more is hardly gonna make the commission salivate.
Parent
Re:Good luck Microsoft (Score:4, Informative)
Parent
Re:She doesn't get it (Score:5, Insightful)
If the EU fines MS $357M, MS can simply raise the price of their European software by $357M.
MS has been a monopoly for a long time. When a monopoly sets prices, they do it based on supply and demand (not competition). MS could have set the price of Office at $10, which would have increased the number of copies sold, but would have still led to a net loss of revenue because the revenue per copy was so small. MS could have set the price of Office at $10,000, which would have meant more revenue per copy, but much lower sales, and again lower total revenue. Somewhere in between $10 and $10,000 is where they decided was the optimal figure. Even though MS is a monopoly, the number of sales does depend on price. At lower prices, they would make more sales in countries like Greece and Argentina, where a lot of people could afford a license, but use illegal copies instead in order to save some money. At lower prices, they would also make more sales to people who would otherwise have been willing switch to (or keep using) competing products like MacOS, WordPerfect, and OOo. At very high prices, they would retain a lot of Fortune 500 companies, but lose a lot of home users.
Since MS has already set the price of Windows and Office at what it thinks is the optimal level in order to maximize profit, it's not true that they can just raise the price in order to cover the fine, without having it cut into their bottom line. Higher prices would be less optimal for them, which is why they didn't set their prices higher before and simply reap additional profits.
Parent
M$ isn't a sovereign country (Score:3, Insightful)
Your characterization is the equivalent of Charles Manson saying the reason for his prison term was that he didn't understand his obligations.
Microsoft knows damn well what's expected of it, they just don't want to do it because they won't survive in an open market. Too damn bad they're fighting against the commodization of software - a type of fight no one in the
Re:Legal circles? (Score:4, Funny)
I hope it's in the form of a coupon for 15% off the upgrade to the next version of the fine.
Parent
Re:Really? (Score:3, Interesting)
If a company refuses to pay a fine, they just send in the bailiffs. They go into all Microsoft offices anywhere in Europe and confiscate anything of value. Desks, chairs, any software lying around, computers. That stuff will then be
Liquid Assets. (Score:4, Insightful)
The whole point of a fine is to be a punishment, severe enough to bring it into line, but not severe enough to break it altogether. MS Europe's liquid assets also have to pay its day to day running costs, as well as any fines. With that in mind, the EC would be nuts to fine it too heavily.
At least, right now. If MS doesn't come into line, then it's likely that the EC will up the ante and approach the problem from the bottom up - keep raising the fines until they're big enough to make MS come into compliance, as opposed to aiming high and striking the heart with the first shot.
Parent
Re:No Alternative for MS either (Score:5, Informative)
It's also a punishment. Even if they turn round now and obey their instructions, they will still have to repay the fine. If they don't obey the law, they will not suffer just this small daily fine but will likely have further punishments.
It's not a "Pay this amount and we'll leave you alone" deal, it's "Pay this, AND fix stuff, or we'll make you pay even more".
Parent
Re:As much as I hate microsoft product... (Score:3, Insightful)
Yes, Just as US harmed its citizens by standing between Enron and all the people they swindled.... Damned that government power, Lets all have a minute of silence for fallen freedom fighter Ken Lay!!!