Microsoft Offers A Modified Settlement

inepom01 writes: "Just read a story here about Microsoft offering a different settlement proposal- this one would have two other companies join in on the foundation MS is establishing- Connectix and Key Curriculum Press. Since Connectix makes software that lets Windows programs work on Macs, seems like same old Microsoft tricks." gnovos points to another story at MSNBC on the shifting terms of this proposal.

Comments

Somehow, RedHat got left out...

[bourne]

And I thought their offer to provide the software was such a nice idea, too...

Here's the big question: How much does this matter with half the states contesting the settlement issue?

for some reason...

[Anonymous Coward]

...i don't think that less than 90% of slashdot.org readers can say that they haven't supported microsoft's monopoly either at home or work.

Time to beat MS at their own game

[zutroy]

Enough with the court-mandated solutions already. Even if Windows wasn't installed by default on basically every computer in the world, people would still request it, simply because no one has given them a better option. As was pointed out a few articles ago, Linux is still too hard to use, and doesn't have enough non-geek functionality. For all the Libertarian posturing on Slashdot, we should be the ones discouraging this court action and letting the free market decide.

Re:Time to beat MS at their own game

[nomadic]

Well I'm not a libertarian (well, a civil libertarian maybe, which is not the same thing) and I think the government should step in and put their foot on MS's neck. And they should feel free to use my tax dollars to do so.

Re:Time to beat MS at their own game

[Osty]

Capitalism is the enemy of the Free Market! The goal of any true capitalist is to create a monopoly. A monopoly means they have no competition, and without competition there is no free market! The Free Market is a good and wonderful thing, it is the foundation of our way of life and the root of just about everything that is good about the USA. It needs to be protected from the predations of the powerful corporations who would crush it in the pursuit of their vision of Capitalist Brand Utopia. That's why we need anti-trust law.

Welcome to monopoly economics 101, wherein we will detail why you are wrong and I am right. Err, I mean why you're misguided about capitalism/monopolies vs the Free Market.

See, there's this interesting thing called competition. It's the drive to succeed. In a free market, it is competition that drives prices down, all the way to the point where one of two outcomes happen:

1. In a perfect competition market, all players have exactly the same product, and they have exactly the same operating costs. This means that at a certain point, companies can no longer undercut each other on price, and so all companies run at a subsistence level (enough to pay the bills, but no profit). This is the "ideal" state of a free market, but it's a very bad state to get in. Luckily, it's also near impossible to reach, as before that point the various players will beging differentiating their product, building customer loyalties that allow them to charge a bit more than their competitors without losing too much business.
2. A monopoly arises when all but one company is no longer able to compete in a market. That can come about in several ways:
   
   • A natural monopoly exists when there is some "natural" barrier to entry. In a natural monopoly, the monopolist can easily charge what's called the "monopoly price" (a price point above the "competitive" subsistence level that the firm would be able to charge if there were others in the market)
   • The more-likely case is when a monopoly springs into existance through competition -- a single company has lower operating costs than the other firms in a market, and thus drives them out by lowering prices to just below the operating costs of everybody else. This will eventually drive those companies out of business if they cannot reduce their own overhead. Once the other firms are gone, however, the monopolist firm can not re-price at the monopoly price because they'd simply be inviting new firms into their market.
   • There's also the red-headed step-child of monopolies -- the government sponsored and endorsed monopoly. This would include things like air traffic control and cable companies (the first being a nationalized industry, thus a de facto monopoly, and the second being a case of government-enforced "natural" monopoly, where the only "natural" thing about it is that it's apparently "natural" for a single entity to own what could be considered public infrastructure. I'm not saying cable companies should be nationalized, because they shouldn't. Just that this is an example of a government-enforced monopoly).
   
   

Now, I know I just said that those are the only two outcomes, and if I were talking about theoretical economics, I'd be correct. So let's revise that to allow for product differentiation and brand loyalty. Now, goods are no longer interchangeable, and so competing firms are no longer forced to subsistence-level earning. Now, differentiation can also lead to introduction of competition back into a monopolized market (differentiation is brought about by R&D, which often has a side-effect of reducing operating costs by researching newer and more efficient production methods. lower overhead means the ability to charge a lower price, and thus slip into that monopoly market where the price was previously below your costs). In other words, the free market fixes these situations. The old policy of Laissez Faire was the best policy, in regards to government involvement in the marketplace. A free market works best when it's not shackled by government (because government *never* works efficiently, which puts it totally at odds with the goals of a free market). Yes, I know the event that changed the US's policy was the Great Depression, but what most people conveniently forget is that our current welfare state was only meant to last for a duration of 5-10 years or so, just long enough to get the economy back on its feet after the depression. FDR never intended things like welfare and social security to extend past a generation at the most, and realistically no more than needed to get out of the Depression. But here we are, with a socialist mindset where we expect the government to take care of us and protect us from the big mean capitalists. And we're going into another recession, so it's not even like these social welfare plans stopped that (which, btw, is the natural ebb and flow of a free market. it goes up, and it comes down. and it goes up again, and so on. we can help "flatten" the wave by having lower highs and higher lows, mainly by doing things like manipulating interest levels to encourage spending or saving as appropriate, but we can't make the cycle go away).

Anyway, I would argue that the free market was the foundation of our way of life, but no longer is. We're well on our way to becoming a socialist nation like many European nations (the day I pay 50% of my salary in taxes is the day I move to Mexico), and too many consumers have forgotten the fundamentals of a free market, instead preferring to have the warm safety blanket of Big Brother Government to keep them safe and warm at night, and scare the Evil Capitalists out from under their beds.

A Organization

[pyrrho]

I think MS should have to fund an organization that would itself decide what to do with the funds. They could distribute linux to schools, they could distribute Office. They could decide the best thing is to enhance linux for education and make an Edu.distro.

Just ensure that MS doesn't decide where the money goes or they will just put it back in their own pocket. History.

I don't get it

[GreenCrackBaby]

How would you feel upon learning that the local mobster, after being caught for extortion proposes, offers, as his punishment, to donate some money to a charity.

What people seem to forget is that Microsoft has destroyed companies, hurt consumers, and generally played the all-around bad guy, and yet no only do they get to propose a "penalty" (I use that term lightly), but they get to propose a penalty that actually tightens their stranglehold!

Apple always did well in the school market, and now they have to stand aside as Microsoft "punishes" their way massively into that market.

Re:I don't get it

[buzzini]

This is yet another variation on the "convicted felon choosing their punishment" argument. For the last time:
1. This is a *settlement* in a *civil case*.
2. It was architected primarily by the lawyers who brought this suit in the first place.
3. It's not illegal to "destroy companies" or be a "bad guy." I'd challenge you to separate what is illegal from what is "not nice."
4. You assert both that Microsoft has a "stranglehold" and that Apple is doing well in the school market. Which is it? What facts are you relying on?
5. Microsoft already dominates the education market, and has been gaining share since 1996. Apple's share is currently 23% according to this story.
6. Is pouring money into low-income areas really the best way for Microsoft to "tighten their stranglehold"? If they wanted to make an investment in the education market to increase their share, they would probably target "high-value" segments with students who are likely to be tech savvy or affluent in the future. That is clearly not the case here.

Re:I don't get it

[GreenCrackBaby]

1. This is a *settlement* in a *civil case*.

So what? Does the notion of the guilty choosing their punishment/settlement not bother you?

3. It's not illegal to "destroy companies" or be a "bad guy." I'd challenge you to separate what is illegal from what is "not nice."

I don't have to do the separation. That's the thing you Microsoft apologists keep forgetting -- they were found guilty of using their monopoly illegally. Their actions have already been reviewed and pronounced illegal.

6. Is pouring money into low-income areas really the best way for Microsoft to "tighten their stranglehold

Oh, good one. "They're poor so they don't count." So are you trying to argue that if it were the richer schools that M$ was doing this for it would be tightening their stranglehold, but since it's the poorer schools who cares?

Why emulate?

[mattkime]

Why would Microsoft need Connectix to provide copies of Virtual PC? Seems like it could only be an attempt to put Windows on Macs. After all, MS Office is avaliable for Mac. I'm sure suitable Mac alternatives could be found for other windows products.

Or perhaps Microsoft would like to point out that Macs make for very slow windows machines.

Actually ... I have a better idea

[SnapperHead]

Force MS to contribute $2 billion dollars to the FSF. Now THAT would make Bill loose some sleep at night.

Money not software

[Midnight Thunder]

How come every other industry has to give money to compensate for the wrong doing ( tabaco companies for example ), but the biggest player in the computer industry is allowed to give away software. Money has a fixed value, whereas software's value is ambiguos and can be decided by the developer. The only real settlement would be to force MS to either give money to charities and let them spend it in a way they ( the charities ) see fit. Another would be for the anti-competive contracts that MS is producing to be declared null and void in addition to the money.

Slashdot Settlement

[althalus]

For all the ideas that get tossed about, why dont' we create a slashdot settlement? Everybody chips in and tells the DOJ in plain words what's wrong with the microsoft ideas, and then proposes a fair settlement(s), and discusses why it's a better idea.

....

[KingAdrock]

I don't think it could be considered a setllement if Microsoft had no say in it.

Re:Why do they get to choose their poison?

[Anonymous Coward]

"Isn't this like letting a child molester choose their punishment after getting caught? "

No it's not at all like that.

"Shouldn't the injured parties in this monopoly case decide what the punishment should be with judicial review. "

What injured parties?

Do you mean Mac users such as yourself? I'm sorry, but the only person who ever overcharged you is Apple Computers. But then it was your own choice to bend over and take it, was it not?

Or did Microsoft force you into buying a Mac?

Some how a "their" got left out...

[bamm]

"But Microsoft Deputy General Counsel Tom Burt said the software giant could help more schools under the proposed settlement, distributing more software at a lower cost than if the same schools went out and bought their programs on the open market."

The "their" in bold was added by me. Nuff said.

We're from Microsoft, we're here to "help" you

[Lumpish Scholar]

Microsoft Deputy General Counsel Tom Burt said the software giant could help more schools under the proposed settlement, distributing more software at a lower cost than if the same schools went out and bought programs on the open market.

Save us from such "help"!

Notice he said the "open" market, and not the "Open Source" (or Free) market.-)

(Though Microsoft genuinely thinks the world would be a better place if more people used their software -- blame it on confidence, blame it on ego, blame it on a reality distortion field, I don't know -- so they really think kids would be "helped" more if they were exposed to "good" Microsoft software rather than "bad" Mac/GNU/BSD software.)

Note that Microsoft controls the prices of software on the open market (pretty closely), on the educational market, and under the terms of this plan. Whether Mr. Burt's statement is true or false is pretty much completely under Microsoft's control.

"If in the solution there are structural biases, however good the intention, then that's something that's got to be of concern," Motz said.... In later remarks, Motz expressed some sympathy for Microsoft's explanation, saying that the potential harm to competition had to be weighed against the settlement providing "more bang for the buck" than just handing out cash.

Motz is going to need the wisdom of Solomon to split this baby!

Linux Anyone?

[jstockdale]

The artical states that the states objecting to the current settlement want m$ to offer office for other operating systems, but then go on further only to specify macintosh. Now although linux/fbsd have a relatively small userbase, it can't be that much smaller than apple's 10%(?). Why has this been left out?

I guess one possibility is that linux/fbsd don't have a powerful central representative company thats constantly lobbing for them with regard to laws making them more appealing, or to increase their particapation in settlements such as this one.

Kinda annoying that the very thing that makes linux so useful from the development point makes it so useless from the political point.

Re:Why do they get to choose their poison?

[buzzini]

No, it's not like that at all.

1. This is a *settlement* in a *civil case*.
2. It was architected primarily by the lawyers who brought this suit in the first place.
3. A $1 billion charge is not necessarily a "win-win" for Microsoft. I'd challenge you to rethink your biases on that.
4. In what way would Connectix be a "tool of Microsoft"? By sitting on an independent committee that doles out software? Again, I'd challenge you to rethink your biases on that.
5. How would "Connectix...be toast"? How does Microsoft "need" Connectix? If Microsoft wanted to "toast" them, they could now. And there are plenty of other companies MS could suggest for this committee. Nothing special about Connectix.

Re:What ever happened to justice?

[M.C. Hampster]

Nobody is missing the point except the idiots who keep asking why Microsoft gets to pick its own punishment. It's not! This is a settlement. Must we define what a settlement is?

They went to court, they lost, they appealed and then they went to settlment talks. The government could refuse to settle and move on to trial. If Microsoft lost at that point and did not appeal or lost on appeal, they wouldn't get any say in their punishment. Well, they would get to plead their case for punishment A or B, but it's not as if they have to agree to their punishment.

Is it possible to have an intelligent discussion on anything related to Microsoft?

Why is it that posts that ask why Microsoft gets to "decides its own punishment", which is obviously false, get modded up, but others that explain the reality of the sitation don't?

The poorest schools...

[Chris Parrinello]

I find it amusing that all of this new hardware/software/whatever is decided in the end is going to end up at all of these really poor schools that need money for capital repairs such as leaky roofs and peeling paint but Micoroft's settlement of the private suits is going to give these schools bright shiny new computers. I hope the leaky roof and the peeling paint don't screw up those new computers.

More Teachers and $$ not computers

[RembrandtX]

My wife's school has 25 new (as of 2 years ago) Dell computers with m$ installed on them.

they have all kinds of scanners, and networking equipment.

This was all donated via M$ as part of their Digital Divite plan. [My Wife works in a low income targed school]

Do you know how effective these machines are in this environment ?

they are still in their original packaging. There is no one on the school staff that has the ability to set up a network , let alone install software and keep it running. There is no internet access to the school .. nor do they have the funds to obtain it. And to top it all off .. they school system is *NOT* allowed to take volenteer help. [I already offered to set them up for them] They belong to the school union, and I dont.

Great donation. some 50k of machines and software (har har) at the time. Yet my wife's teaching budget of $900.00 isn't enough for her to get enough of even the most basic of art supplies for her 350+ students.

Since it was a donation, the school board is not allowed to sell it. And use the $$.

So these things do *NO* good to anyone [exept microsoft and i suppose dell] because of the tax breaks.

If microsoft REALLY wants to help education, they should turn part of their marketing machine on the prospect of paying teachers a salery WORTH what they deserve. If my wife got $1 for each child a day that she teaches [WAY cheap for a babysitter] she would double her salery now.

that means she gets less than five CENTS an hour to teach a child. [per child of course]

if the average american parent we're to guess how much their student's teachers were paid to care for them a day .. how many think they would be anywhere CLOSE to guessing right ?

donate computers to schools indeed. Why not just put the money into their research department, and *SAY* they are developing a plan to improve schools ? Same effect.

Re:More Teachers and $$ not computers

[boydtel]

That's a news story. (That the union won't let volunteers make good happen there.) Presumably the neighborhood this school is in has media, if the larger papers and radio stations don't grab the idea and run with it start calling the smaller weekly papers. What you have is an over the transom news story. Go tell people.

You've hit it...

[JMZero]

MS should have to give up cash, as that's what schools need.

However, I think they should also be forced to lower their prices for educational customers. Dramatically. This way schools have a choice - and a little bit more in the piggy bank either way.

Re:Why do they get to choose their poison?

[FFFish]

The $1 billion charge is a win for Microsoft.

When presenting their tax return to the IRS, they will claim the retail value of the donated software/hardware. This will provide them with a $1 billion write-off, either as a loss or as a donation. It will go a long way toward earning them a tax refund.

When presenting their annual report, though, they will claim the manufacturing/raw cost of the donated software/hardware. This will show up as a piddling $100 thousand loss, not at all noticeable. The investors will be mollified.

In short, they get a win-win: they win against the IRS, and they win against their shareholders. It's just a matter of fiddling the numbers... standard accounting practice, seemingly specially designed to let companies get away with all sorts of shenanigans.

Once again, the math points out M$'s lies

[JustAnotherReader]

But Microsoft Deputy General Counsel Tom Burt said the software giant could help more schools under the proposed settlement, distributing more software at a lower cost than if the same schools went out and bought programs on the open market.

However, the last article on the M$ counter offer said that they would provide $1.2 billion of which $900 million of that would be Microsoft software products. That leaves $300 million for hardware which means that apparently Microsoft thinks it can best help the schools by charging 3 times what the hardware cost for their software (and coincidentally putting that $900 Million back into their own pockets)

If the average computer runs roughly $1200 for a hot shot system then it seems to me that the schools can buy a copy of Windows 98 or 2k and MS Office at the local software store for a LOT less than $3600.

The real reason for that counter offer is that it puts 3/4 of the settlement cash right back in Microsoft's pockets.

Give the money directly to the schools and let them decide. Apple, Linux, Even PC's with Windows is OK, but the schools should be making the decision, not Microsoft.

For the love of god...

[eyeball]

(I know this message will probably be marked troll, but here goes)

...seems like same old Microsoft tricks.

Would you guys just grow up? Did it ever occure to you that it is the responsibility of every employee, executive, and board member of a company to do everything in their power (including 'old tricks') to try and beat out the competition? If they don't, they are committing a crime against their own company (and against the principles of capitalism for that matter).

Public Education vs Microsoft...

[Trillian_Angel]

I know its been said once, twice, 100 + times, but in all due respect for Education, its not the computers that make education good, and it is mostly teachers... but I think the MAIN factor is the kids. (and those who boss the poor teacherws around... but I'd consider them loud mouthed kids half of the time.)

Teachers aren't paid crap, and they teach because they really love to teach, but even the greatest teacher in the world won't do a grain of good if the students aren't movtivated enough to learn. Double edged sword. Good techer go to waste because of the bad students that waste their time. (I've been there and I've done that, i've been a good student AND a bad one)

So schools get win 95, on pI 166 machines. The outcome: Machines that are semi reliable for several years, cheap. If the schools anything like the one I went to, when it breaks they call in their better students and they fix it, everyones happy. And when the old 166 breaks, its broken. No *real* huge deal, 300 bucks to replace.

Now, all the computer companies want a piece of the education system. Why? Because the heads of education want to show off their buildings to the blue ribbon givers out there. So what do they do? They buy cheap equipment so they can say they have a lot of comptuers to use for education.

Maybe we should shoot those who lead the educators and let the teachers pick what the school system really needs, we may get somewhere then.

Don't get me wrong, I respect teachers dearly. They have had a big hand in making me who I am today... but I have a strong dislike for those who ruin those teachers I so admire... and it isn't what kind of computers the teachers and the students use. Microsoft is just using their brain to make more money in a greedy world. Congratulations, you found a weak point in the education system. Enjoy reaping your benefits, and don't let the door hit you on the way out.

It should be Apple not Connectix

[MrGHemp]

If Apple holds half the market for school computers wouldn't it only make sense to put Apple in a key role? Say, on the committy, with as much voting power as MS... I bet that would help ensure the money got spent in a fair way. I'd bet Apple would be willing offer their computers and software at a greatly discounnted rate if MS was floating the bill.

OR... does Microsoft simply want to put Connetix virtual PC on the Apple computers the schools do have... you know "upgrading" them to act as a PC, because we all know OS X is UNIX based & bad for the childeren.

Is it just me? Does it seem like every time Microsoft makes an attempt to satisfy complaints... it only makes things bend more in their favor?

Business Ethics

[gnovos]

Despite the justifications that your CEO gives you for using dangerous levels of petrochemicals in thier baby-food to "save costs", there is a such thing as business ethics. A company that breaks the law ("Hey, let's just burn down the warehouses of our competition and poison thier employees; We'll be the only game in town!" "Great strategizing Bob, get on that! Top priority!") is NOt helping thier company OR capatalism.