Slashdot Mirror
EU May Fine Microsoft
Yokaze writes: "The Wall Street Journal reports about a leaked European Comission document, that suggests that the EU may fine MS for anti-competitive behaviour. The fine can be up to 10% of the annual revenue, or $2.5 billion and may include the demand to remove certain programs from Windows.
The report harshly criticized MS way of taking influence in the case, even speaking of trying to mislead the observers.
Regarding the report of the WSJ, European Competition Commissioner Mario Monti said, that the case is still at a preliminary stage, since MS still has the right to defend itself at a hearing. Or in his own words: 'To speak of a fine when Microsoft has not yet disputed the Commission's preliminary findings both in fact and law -- as it it's right -- is premature.' Since the original is for subscribers only, take a look at Yahoo or the more detailed report from BBC News. Lastly with some different details a report from Heise in German."
I like the fact that at least some gov't agencies are looking out for what's best for the people, and not big business. Please take note America.
I think this will have a major impact on Microsoft's business practices here and overseas, as I really can't envision Microsoft making a EU compliant Windows sans IE, Windows Media, Chat, etc., for them and a bundled Windows for the rest of the world.
And it's a testament to the impact of globalizaton, and interesting to see how foreign government's can influence American businesses in such a major way.
Shame on the bush administraion for letting up on Microsoft. And for the record, I am a huge Microsoft fan, and believe they do make some superior products. Note I said "some". I also love some of thier business practices, and believe business students will be studing these for years to come in universities all over the USA.
--- RFC 1149 Compliant.
Not since the French banned the word "e-mail" has Europe seemed so anti-American.
Over the last six weeks, the European Union has given a big thumbs-down to a series of telecom and technology mergers driven by U.S.-based companies, from AOL-Time Warner to WorldCom and Sprint. Pointing to the global reach of these proposed deals, Mario Monti, the European competition commissioner, seems to have thrown down the gauntlet to a number of American companies with market-grabbing megamergers on their minds.
By far, the most effective strike was the ruling by the EU Competition Commission against WorldCom's proposed takeover of Sprint. Monti reasoned that yoking together the companies' significant Internet backbone holdings in Europe would give the merged entity so much power that it could effectively make decisions independent of both its competitors and its customers.
Late last week, WorldCom and Sprint formally withdrew all merger plans, officially burying any sort of union.
The EU's move to reject the deal has raised suspicions in the United States about what the Europeans are up to. Timing is a factor in the paranoia. The WorldCom-Sprint move comes on the heels of Brussels' June 19 announcement that it plans to launch a four-month investigation into the AOL-Time Warner deal. American misgivings increased when, barely a week after nixing the WorldCom-Sprint marriage, Monti prevented Microsoft from taking a controlling stake in British cable company Telewest Communications.
So, WorldCom-Sprint fell apart because of Monti and his gang, right? Not so fast.
The Union's ruling was hardly the dealbreaker. It occurred after the U.S. Justice Department had already said it would block the merger and after WorldCom and Sprint had formally withdrawn their application from the EU.
That said, suspicions of anti-Americanism persist nevertheless. After all, the EU hasn't demonstrated the same level of concern with similar deals involving European companies. It approved the merger of Mannesmann and Vodafone, reported to be the world's largest hostile takeover, once Mannesmann ditched its British mobile-phone operator, Orange. Of the dozen EU media and technology cases the Competition Commission has considered since June, four have focused on U.S. companies, and all four have led to extended investigations that blocked mergers, ultimately limiting U.S. control.
If there is a conspiracy afoot, plenty of observers in the United States are ready to root it out. The Washington Post even goes so far as to suggest Monti is trying to stymie U.S. companies to give European telecommunications and Internet companies a chance to catch up. Meanwhile, on the other side of the Atlantic, hard-core "Ameriphobes" were happy to see Europe apparently standing up to U.S. globalization.
But between the posturing and the transatlantic bluster, the real story behind the U.S. companies' woes has less to do with favoritism than it does the regulatory obstacle course that huge U.S. and European deals will face in the future.
Rather than gunning for American companies, the EU's Competition Commission is more likely reacting to the size of the deals being brokered. The scale of many of the latest proposed mergers is unprecedented. The companies best positioned to pull off these megadeals right now just happen to be American. But that won't be true for long.
"I don't think there are any grounds to say the commission is out to get U.S. companies," says Olivier Kaiser, chair of the competition subcommittee for the American Chamber of Commerce's EU office. "The economy in general is American these days. It just happens to be those American companies that merge. The commission is just applying the rules, but applying them to bigger mergers."
Even Microsoft, which has come under European scrutiny twice in recent months, bears no grudge. It is currently facing an EU investigation for anticompetitive behavior in the packaging and sale of its Windows 98 software. And after consultation with the EU on the company's plans to invest in Telewest, Microsoft agreed to restructure the terms of the deal so it would not have a controlling interest.
From the article:
It says that bundling new features into Windows and Windows server software "has a chilling effect on innovation and competition," according to the report.
That kind of wording is almost identical to that used by the companies which have complained to both Brussels and the US Justice Department about Microsoft's behaviour.
The DoJ and the EU say the same thing, but only the EU will have the resolve to see this through. Opposed to the DoJ's potential wristslpa, the EU starts with a monetary fine and then gets to the heart of the problem! Instead of trying to break up the company, just break up the software, get rid of the bundling which causes the interoperability with other software, allowing other software vendors to break into the MS Windows software market.
I like fire ants. They are very spicy!
Yet.
OK,
- B
http://www.bradheintz.com/
- updated
We can only hope! Can you imagine all that money that used to go to MS licenses going instead to fund new software development because Microsoft is too arrogant to play nice, so it takes its ball and goes home? Something good would come out of that, I'm sure.
The first thing that would be done is every single MS proprietaty protocol will be reverse-engineered (and legally, too, at least for Europe!). Even if those of us in the U.S. wouldn't be able to use it legally, I'm sure it would be useful to us.
We're quickly moving back to the old notion of city-states with their own conflicting sets of laws.
Au contraire! The EU has its foundation in removing barriers of trade (primarily in Europe of course..). And the borders are getting less visible for every year.
You may also say, that removing barriers of trade is all about securing a healthy competition on a larger scale in a smaller world. This is exactly the same reason for which you have laws against monopolies - to secure a healthy competition.
In this case, the EU would be trying MS on basically the same laws that got them into trouble in the states. I don't think that's really a "myopic law from another country" and comparing it to Dmitry's case makes absolutely no sense.
And who would it benefit for MS to pull out of Europe? The population of Europe is probably greater than that of the US. They'd lose a huge amount of money, much more than the 10% that the EU could fine them.
For all their faults, Microsoft know how to make money.
the average user can not be bother to go and look for better/other software and is then tied in to using the default microsoft products. in a way this is supposed to be userfriendly, but you can see it as pushing out the competition. do you really think the avererage user would try and find a different email client, even after all the security alerts, when outlook express is just sitting there ready to use?
i think not.
of course, i would imagine that most slashdot'ers would have the sense to use what ever program they want for the task, but not the average joe. they'll use whatever is there, or most convinient to use.
this is pretty much the main reason why so many people use outlook/outlook express, because it's there!
doesnt give other apps much of a chance does it.
just my thoughts...
You, like so many other slashdotters, seem to forget that just because you don't agree with an opinion, it needn't necessarily be "-1 flamebait."
Microsoft can easily buy a small country. A fine doesn't help Microsofts victims, doesn't help end users, doesn't fix any lawsuit. Microsoft will laugh its ass off. Those Europeans! (I'm Dutch myself..)
Why not tackle the problem itself? Microsoft is bundling its software to force competition out of the market. Why not force Microsoft to leave IE, Media Player, video editing software, hell even Minesweeper out of the default Windows package? (How much cheaper would it become?:)
There's the application barrier. Force it down! It should be possible to run Win32-applications in a legal way under any operating system. Yes, games too - DirectX should be opened or ported too.
Last but not least, Microsoft should cooperate with developers who struggle with Microsoft Word (or in general, OLE2) import/export filters and other proprietary Microsoft formats (NTFS, WMA, name it..)
If you think that I am radical, you probably don't have an idea of Microsofts power, budgets and market share. Microsoft is of course not evil itself. Their software looks and works actually pretty good, except for their obvious brain damage in security. Their management, their strategy and their habits of misusing their monopoly need a hard kick.
>i'm not so sure microsoft would be very happy with that kind of solution
;-)
;-)
I wasn't aware that there was any expectation that Microsoft had to be happy with anything that results from their "anti-competitive behaviour".
In fact, I'm almost positive that a punishment, such as a fine, is expressly intended to be something that makes Microsoft unhappy.
>...a better and even more widely used alterantive to windows is most certainly NOT something they would like to see.
Good point. That might level the playing field and disassemble their monopoly. Microsoft wouldn't like that.
But, as to using the fine to fund an opensource consumer OS:
I'm having a hard time imagining how that could ever happen. Is there any precedent for government imposed fines to be given to a third party for *any* purpose?
They seem to have a right to a hearing.
BTW whats the alternative? If you think they shouldnt be allowed to fine foreign companies then I assume you must be suggesting that all anti trust laws be abolished (since fines are the only way you have any sway over foreign companies, and if you can escape all anti trust laws simply by setting up shop in the country with the laws which suit you then there is very little use for them anywhere in a world with a globalized economy).
Let's see..
I'd pick IE over Netscape (or any other browser) ANY day of the week.
I'd pick MS Office over Star Office.
I'd pick Netscape over Outlook.
I'd pick WinZip over Windows CAB's.
I'd pick Visual C++ over Power++, Borland, GCC etc.
I'd pick WinAmp & QuickTime & Real over Windows Media Player.
I'd also - currently - pick Windows 2000 over Linux, for use both at home and at work.
It's not that easy. Microsoft has some good software. They have some bad software. They have some absolutely HORRIBLE software too..
These are the two things that nearly everyone insists upon. They must have MS Office and they must have a good browser. Netscape has lost the browser war and MS has no intention of making Office for linux.
I would love to see linux become a common desktop solution. The business model for a MS-free enterprise makes so much sense. But, corporate America will not let go of MS office. Nothing else matters, unfortunately.
Anyone running Microsoft software has accepted the EULA for that software. No matter what Microsoft claims in their marketing materials about how robust, secure, etc. their products are, the EULA usually quite specifically absolves Microsoft of any liability at all, should their products not perform as advertised and instead cause damage to or destruction of the hardware on which it is used, monetary loss, injury or loss of life, or anything else that most people would term "bad" and start looking for someone to sue over.
This is patently ridiculous, IMHO. Imagine if GM bragged in their commercials about how safe their cars are because they have airbags, and then printed a EULA on their airbags that absolved them of any liability if the user died from using the airbag. Would people still buy GM cars? Probably not. Until software companies can be held totally accountable for the claims they make about the robustness and security of their products, the users of those products will always get the shaft, and have little recourse when they do.
~Philly
One of the key mistakes MSFT has made is in trying to avoid having a US court rule on punishment. By doing so, they forced the EU (EEC) to act, and unlike America where MSFT has some support and lobbying dollars, the EU does not like MSFT.
It's better to be punished by people who think you're a good guy than by people who are convinced you are bad. But they still persist in thinking that they can escape punishment through trickery.
--- Will in Seattle - What are you doing to fight the War?
That state of affairs where the power of government is divided between a few hands, we usually call "civil war."
That state of affairs where the power of government is divided between many hands, we usually call "anarchy", or "lawlessness".
Stefan Axelsson
Microsoft yet again (apparently) makes life more difficult for themselves. I'm no huge fan of the company, but even I think that they would have had a *much* better time in both the US trial and EU investigation if they didn't play so dirty (the whole video debacle at the US trial, the apparent obstruction of justice with the EU trial)
Judging by how lucrative MS's practices are, I almost wish some of the stocks I own would get in the habit of shooting themselves in the foot. Eventually MS will tap out, but it's been a hell of a ride for a long time -- which is about all you can ask for as a shareholder. Err, other than ethical behavior, that is; but that only concerns a few eccentric cranks.
I have on occasion been in business situations that involved ticklish ethical questions. For example in the early 90s I was involved with a group where the marketing director wanted to carpet bomb various usenet groups with postings (this was before anyone heard of spam). If I hadn't already been an old timer who could point out the damage to our reputation that thoughtless posting on what was a cooperative medium, we would have been pioneering spammers. It's hard to maintain your integrity and maximize your chances for success. More often than not these aspects of a decision get confused, which if you think about it is not surprising: if you are successful, almost nobody questions you; if you fail, then they question everything, including your ethics. And people tend look to each other for confirmation that they haven't gone beyond the pale of decency. It's normally a healthy thing. But success tends to bless any practice that would be reviled if failure followed it, independent of its own usefulness or morality. I suspect that given enough success a group of people will eventually develop a culture that is proud of things that disgust ordinary people.
A little failure is character building; but MS is a company that has never ever had any failure that mattered. So, is it any wonder that shame doesn't figure into their corporate culture? It looks to us like they shot themselve in the foot because they acted in a way that would make anyone else blush. But it doesn't matter, because none of it has affected the bottom line. And, it seems like with the DOJ rolling over and dying, once again the bullet has missed their foot.
Which given normal business psychology justifies everything that they have done. Like the GM chairman who said "What's good for GM is good for the country," they must have a very unshakable sense of the rightness of their cause.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Those of you who remember the IBM antitrust years may recall one of the outcomes of that debacle: IBM was forced to unbundle its services from its products, and forced to document its interfaces. The birth of a reasonably fair aftermarket soon followed.
Let's home this happens to Microsoft too, and they have to completely remove all mentions of Passport/Hotmail from Windows, as well as IE and Media Player.
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