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Be Sues Microsoft for Violations of Antitrust Laws
Eugenia writes: "While Be, Inc had the information for over 3 years that Microsoft 'through a series of illegal exclusionary and anticompetitive acts designed to maintain its monopoly in the Intel-compatible PC operating system market and created exclusive dealing arrangements with PC OEMs prohibiting the sale of PCs with multiple preinstalled operating systems' they filed a suit against Microsoft only today. Today Be employes a single person in a tiny office in Mountain View. Great ..."
Now that it's become popular for other companies to sue Microsoft, who will the next one be? Novell seems to be a possibility. IBM should for the same reason as Be, due to OS/2.
Of course, in Be's case, what really is the point of filing now? Is someone going to do this work pro bono hoping (hah!) that they can afford to battle Microsoft in court and win? Seems like they're too late, but then I come back to the first question: How many are there?
Nothing to lose.
I wouldn't go that far. AFAIK they still have stock holders and are trying to disolve the company. Some of the stockholders may not want any more money wasted and just liquidate what's left.
Of course, since the potential payout is much, much larger if they sue I doubt anyone would pitch a fit, but you never know.
a) they already pretty much closed up shop and there are no debts left.
b) apple seems to do quite well at selling an OS. even if they also make money on hardware and some crappy little mp3 player.
c) investors would get the money since they got the stick from the anticompetitive practices.
I fully agree with Be's suit.
Microsoft hit BeOS hard with the release of Windows Me. You see, BeOS PE needed a way to exit Windows without shutting down. This was possible in Win 95 and Win 98, but removed in Win Me.
Microsoft never gave a reason for this, and it is assumed that MS made this change to restrict other OSes from running along side of Windows.
Microsoft's strong-arm tactics in OEM licensing also hit Be hard. Many companies were going to start shipping BeOS machines, but they noticed a clause in their license that would require the purchase of a Windows license, even though Windows would not be used. This would be very costly, so the OEM BeOS idea failed.
Some have said that the size of Be will hurt them. I diagree. Think from the jury's point of view.
You see one large company against one man. That one man used to be a large company, but the other large company killed it.
It is just this kind of tale that will help Be the most in the courtroom.
-twb
I for one am glad that Be is sueing Microsoft, and I don't think it's as futile as some think either. If you read the article, the entire suit is based on the destruction of Be, majority of it because Be was unable to get PC OEM's to install Be on PC's they sold because license agreements with Microsoft prohibited that from taking place, else they violate their agreement with Microsoft, and will not be allowed to install Windows on any machines. You cannot get anymore anti-competitive. Plus, with only a single person left in the company, and 99% of its assets sold off, you can't get anymore proof the business was indeed destroyed. The burden on Be now is to prove that is was indeed largely Microsoft's fault and not other elements such as poor business plan, or a product the market didn't need. Hopefully it'll get more press coverage, this should continue to help prove to the average Joe Windows that Microsoft didn't get where they are today because they make a good product.
..There's a-dooin's a-transpirin'
Seriously, MS has already been found guilty of being a monopoly. It wont take much to show how they single handedly destroyed BEOs. I remember so many PC makers who tried to offer Be on a pc till Microsoft totally went agro on the makers and made them stop. BE never had a chance, and the OS from my point of view was incredible. They had way too many walls to face with Microsoft doing their evil. It's time for Microsoft to start paying out for the damage that they've done. No smack on the wrists, but serious hard damage.
A lot of people who helped develop Be probably want to do the same thing again. If they can force MS to let PC manufacturers install other OSes on their machines, it'll give the former Be-folks another shot at making a fortune. (and maybe Palm has the same aspirations, for that matter)
Whether they'll be successful is another story altogether...
Teaching, coding, coffee, revolution.
There's a fantastic book out there called the 22 Immutable Laws of Marketing. It's a fascinating read and contains many case studies to back up these "Laws".
The place for #3 in any market is always small, but obtainable. Linux now owns this space in the desktop OS market (with Apple being #2). Be failed to really develop themselves and build what is known as "mind share". How many people have even HEARD of Be? Not many.
As entertaining as it might be to generate conspiracy theories that somehow the big evil M$ "kept them down", there are other more down-to-earth reasons why Be has always been doomed.
Linux squashed Be. This is because Linux caught onto a market wave as it was happening (the open source movement).. Be tried to catch on to this as well but it was too little too late.
mje0w!!!1!
I thought I remembered reading that article before, and after skimming it again I was correct.
Since Be is getting into the ever technical legal system with their actions, this could be a very good case, however I feel Microsoft will win this one.
If the contracts Microsoft signed with OEMs stated that theirs was the only OS to be installed on computers, then that is clearly anitcompetitive, and this is what Be is alledging (only Windows on a computer). However, from what I gather from the article Microsoft's contract with OEMs made it so they could be the only OS listed on the boot loader.
Now, this may be cutthroat business, but it's not what Be is alledging. Their software stinks, but Gates is a ruthless business man, which I do admire to a certain extent.
Thus, in this world of legal technicalities, I think Microsoft will win.
Why is this a troll? I advocate both Linux and BeOS (now OpenBeOS I should say). All of his points are valid, though perhaps more specifically, he should have said: "charging for a desktop OS for the x86 architecture is never going to work again for anybody other than microsoft ..."
Ultimately what will bring down Microsoft isn't any sort of half-baked government settlement. What will doom them is having to fight a ton of little court battles against every company who ever thought about competing against them. Even if they win a lot of these cases, the pure distraction of having to fend off all these suits is going to hurt them.
This sig has been temporarily disconnected or is no longer in service
Look, i'm sorry but this is complete crap. What if OS/2 had won and driven MS out of Windows... would that have meant that MS could have sued IBM? Signing exclusive agreements is NOT illegal! What is illegal is saying you're going to pay for a copy of the OS regardless of whether or not you ship a copy of the OS on the machine (this is what the consent decree from the early '90s was about, before Be had shipped an OS at all). Further, if they added x or y to prevent Be from booting/installing/whatever, that's LEGAL. They're competing products!
Please folks... substituting MS for a society where companies cannot compete due to fear of lawsuits is about 100x worse. Be messed up bad, and now they want a lawsuit to recover as much as they can. I hope that the libertarian folks among you can see this at least.
Flame on.
Be is one of the few companies that genuinely do have a case, me thinks. With browsers the situation is bit convoluted (no one ever made money selling browsers). With BeOS, Be had snowball's chance in hell getting h/w manufacturer's to pre-install the OS because of Microsoft's strong arm tactics. Consumers didn't get to choose... perhaps they wouldn't have wanted BeOS in any case, but MS didn't want to take a chance. Of course MS didn't just fight BeOS but all potential competitors... Be just happens to be the one that had closest match on intel hardware (for 'normal' consumers).
Oh and yes, these tactics were hardly "tiny little thing" that Microsoft "didn't even know it was doing"... the whole industry has known about this for years now... but big names (Dell, Gateway et al) have been too scared of Don Bill to publicly complain (and/or greedy and content with status quo... they just sell hardware, OS is just a tax they have to pay)
I like paying taxes. With them I buy civilization -- Oliver Wendell Holmes
The problem wasn't that OEM's couldn't offer another OS, it was the fine print that said if you offered Windows, you couldn't make any changes to the boot loader. Hitachi had a PC, the Flora Prius, that had BeOS installed on a seperate partition, but in order to use it, there were instructions you could get online to make it bootable. Good article on it here.
What bearing does Palm Inc. have on this lawsuit?
.
." - Qui Lime Pi, The Phanton Menace
With Microsoft making inroads into the PDA market, is this lawsuit just a ploy by Palm to distract the competition? It forces Microsoft to expend additional resources, while Palm can focus and regroup. Or so they might be thinking . .
"My young apprentice, there is something else behind this . .
Did you actually read the finds of fact from the antitrust case? In fact, it clearly spells out why OS/2, MacOS, and Be (listed under "Fringe Operating Systems") couldn't capture even a minimal share of the OS market. go read it yourself and see. In fact, I wouldn't be surprised at all to see Apple, IBM, and other OS makers sue Microsoft as a result. Maybe this will start a chain reaction that may be able to slow the giant...
taco
"Corrupting our youth one mind at a time"
The key was impossible. Things have changed in the last five years. Five years ago Be still had a chance. Five years ago, Microsoft's OEM agreements charged for a copy of Windows on every machine shipped, even if Windows wasn't actually installed. Five years ago Microsoft's OEM agreements forbade putting a "Boot into BeOS" icon on the desktop. Five years ago you could not purchase a desktop PC from a mainstream OEM with a non-Microsoft operating system.
Microsoft's tactics deliberately made it nearly impossible for an OEM to offer customers alternate operating systems. Maybe BeOS didn't have what it takes to survive in the market, but we'll never know, since Microsoft effectively kept BeOS out of the market.
Consider that they may have purchased Be only to use it as a battering ram against Microsoft and all this time tossed it a carrot here and there and finally closed it down after suffering enough losses to look good in court. Depending on how the judge decides to view this it may work, it may not, or Microsoft may just say, "How much do you want to shut up and go away?", and settle out of court.
A sad end for Be, anyway, particularly after watching something like this happen to my prior employer. The name may be the same, but there's a different soul, not to be trusted as the old one was.
A feeling of having made the same mistake before: Deja Foobar
Jean-Louis Gasse offered BeOS free
to any hardware manufacturer at one point. That not one took him up on it is a fairly positive indication that MS was putting some major pressure on PC makers. It's been shown that the secret licence that MS forced PC makers to sign specifically prevented PC makers from offering any alternative. The only PC maker who did offer BeOS pre-installed (Toshiba?) was forced to hide it, rather than make it a menu choice.Be has a very good case. Put it this way - there are folks who would be happier to invest in this suit, than in Be as a successful seller of operating systems.
"How perfectly Goddamn delightful it all is, to be sure" Charles Crumb
Microsoft's agreements with OEMs (the agreements themselves were trade secrets, by the way) forbad creating multiple-boot machines. Be's business strategy was to be a "helper OS": used for things that Be did best without losing access to Microsoft Apps. It's pretty much the same strategy Microsoft used in weaning people from DOS to Windows 3.0. Microsoft's OEM agreements prevented this kind of arrangement. Realistically, given the amount of software on the market, it also prevented desktop competition.
For an OEM, on a thin margin, that's pretty much like putting a gun to your head. It's also illegal as Hell for a monopolist to do.
Be is in a pretty good position, here, I think. Microsoft has already been established as a monopolist and the OEM agreements very clearly represented an illegal abuse of their monopoly power.
If I'm not mistaken, and I may be, this suit will be in a class of Federal suit whereby the loser pays. If so, Microsoft will be responsible for all legal fees if they lose.
I wouldn't be completly surprised if some enterprising law firm adds up the merits of this case and agrees to go for a big score here, matching MS blow for blow.
What I want to know is, other than deep pockets why is only Microsoft being sued? If the PC makers were in collusion with microsoft - IE they agreed to this tactic - they are just as guilty. MS has deep pockets and can afford slimey lawyers and lobbyists till the stockholders come home, but I guarantee you sue the OEM manufacturers and you'll get somewhere. Afterall, microsoft makes an OS; You have to have a computer to use windows, but you don't have to have windows to use a computer.
Why do you think not a single major PC manufacturer testified during the trial?
I believe Dell and Gateway were both heavily in favor of the Government seeking to divide up Microsoft. Then something happened. People stopped buying as many new PCs. It turned out that people were able to run everything they wanted on their current machines.
So, where could they find the next "killer app" to drive the PC upgrade process?
Redmond, WA of course. Windows XP is the only reason that Dell, Gateway and all the other computer makers aren't hurting big time right now. The bloated nature of Windows software is actually as selling point to companies bundling software with new PC's.
Ever wonder why the government suddenly changed its mind about breaking up Microsoft? It had a lot to do with the Dells and Gateways of the world asking them not to (and a bit to do with content companies requesting the same thing).
Microsoft has a lot more than just their short and curlies in its hands.
"Don't blame me, I voted for Kodos!"
If I were an OEM, I could install both Linux and Windows on the same machine, and be able to offer my customers a simple multi-boot solution without having to modify the boot sector at all. It's called a boot disk. Insert this disk when you want to boot to Linux. The disk contains nothing more than SysLinux, which is set up to boot the linux partition off of the harddrive. There, OEM License problem is solved.
Then just put a little icon on the Linux desktops. "Tire of using a floppy to boot linux?" Curious users will click it, and it will Druid them right through installing a multiOS bootloader on their harddrive. Probably LILO or GRUB. And voila, you're done.
Of course, most OEMs aren't too bright when it comes to getting around license restrictions. The legal departments tend to jump onto the MS bandwagon pretty quickly since it's been their bread and butter for so long.
The OEM Licensing agreement you are refering to is considered a trade secret. NOBODY but the legal teams at the OEMS are allowed to read it. Your idea assumes that the licensing agreement doesn't explicitly exclude the "loophole" you described.
Okay, giving your idea the benefit of the doubt, Microsoft's OEM licensing agreements are contingent on the whim of Microsoft. If an OEM, and I'm not talking about Joe OEM, I'm talking about the big names, Gateway, Compaq, Dell, even look at Microsoft crosseyed, Microsoft may yoink their OEM license agreement, which would subsequently mean immediate death to said OEM. They can't afford to sell computers if they aquire Windows at a retail price. This means that Microsoft has a lot of leverage outside of their exclusionary licensing agreement that does not leave a lot of room for OEMs to be "creative".
This topic is what Be's complaint is about. When Compaq announced that they were going to market a Internet Applicance running Be's BeIA, well, read this quote from Be's complaint:
Microsoft used monopoly illegaly (tried and convicted by the highest appeals court). Their control over OEMs extends past their written contracts.
Also the've tended to be all caps as in NT or XP. You would expect Microsoft Windows Millenium Edition to be ME instead of Me. Looks like Microsoft went out of their way to trample on Be.
I wouldn't go that far. AFAIK they still have stock holders and are trying to disolve the company. Some of the stockholders may not want any more money wasted and just liquidate what's left.
Wrong... as a stockholder for a long time, I can tell you the only thing we're holding on for is a lawsuit just like this. The only reason Be is suing now is to win money to try and give some money back to their shareholders.
"And like that
> It's so amazing to me that I have to fight a tendency to perpetuate my own tin-foil hat conspiracy theory: that the DOJ didn't really mean to win their case.
Why is this so difficult to believe? If there was some kind of understanding among the Bush folks that this case wouldn't be taken seriously, doing a serious prosecution would be very career-limiting.
There have been quite a few posts flogging the dead horse of whether MS is a monopoly.
Enough already ! Listen - it doesn't matter whether you think MS is a monopoly. It doesn't matter, even, that you may think that the judges were wrong in ruling that MS is a monopoly.
The fact is, they did rule that MS is a monopoly. And because of the legal doctrine of issue estoppel (whereby something which has been litigated in court and been the subject of a final decision by the court cannot be relitigated), Be doesn't even have to prove that MS is a monopoly. They can simply tell their judge that the court has ruled that MS is a monopoly - MS cannot argue this point any longer.
So all that Be now has to prove is that MS did some illegal monopolistic acts (remember that certain acts which would be legal for non-monopolists are illegal for monopolists) and that such act caused damage to Be.
IMHO, a fairly simple issue to prove. They don't even need to prove that it caused their downfall, ANY damage is sufficient (it only affects quantum of recovery, and since Be's broke, any money is better than none. Don't forget that since the lawyers are acting on contingency, Be has NO cash outlay for the trial).
Actually, there's quite a lot of this going on right now. Be is going on because they do have one very strong asset... A potential lawsuit against microsoft. Often a board will shut down a company (almost), sell off its assets, then go and find investors who invest in the remaining shell company. What the investors are actually doing, is funding and investing in a lawsuit. They're gambling that Be will get enough of a settlement from the big 'M' to make it worth their money.
This type of thing has been happening a lot with patents as well. Failing companies will spin off holding companies, whos assets consist of some patent that that company came up with. The shell will then go and find its own money to fund lawsuits against existing violators.
Its a weird weird world.
This reminds me of Nextwave in a lot of ways.
BG: Nextwave was the company who bought the spectrum many of the cellular companies are deploying new services on. Well they didn't pay their bills and the FCC took back the spectrum and reauctioned it. Nextwave sued the FCC for taking it away and it dragged through court for about three years and Nextwave won. Now their worth a TON of money because, the Cingulars and Verizon's of the world already have service. Guess who the FCC has to buy from to get the spectrum back.
Now let's apply this to the current situation. Be is currently worth about 4.4 million total right now in stock. Since the company doesn't really have any debt anymore roughly $1.5 million with most of that in current liabilities so the company is close to $3 million total.
Roughly 130 million computers (got this off a CNN article correct if wrong) were sold last year. Now watch this. Judge finds that Be was killed by Microsoft. Take the previous two years of sales will say 225 million PCs. Judge says 150 million (round ball) were shipped by OEMs and Be considering its size would not be have penetrated no more then 2% of the market. That means they could have put their OS on 3 million computers. Ok, let's now say Be charged $25 for each copy (below MS because they are trying to gain market share and they will be considered an inferior product to most of the marketplace). Now we have at least a verdict of $75 million or roughly a 17x the current stock price. Of course Be is a penny stock at 12 cents and they very well could lose the case but if you got money that you would take to Vegas it might be worth a shot.
BTW, we haven't even talked about the chance for punitive damages and if MS lost the case and decided to settle you could be looking at handsome pay day.
HT
If they feel that the company is worth more being liquidated (which is typical with software companies, which Be has been for the last few years) as opposed to rebuilt, then they will make that decision and recover whatever they can. Since Be has sold it's assets to Palm and auctioned off eveyrthing else, I think that the debt holders have already been making the calls.
As far as a lawsuit goes, it seems to be a good idea. You lose and get $0 or you win and get $2 Billion of computers that were going to be put in public schools with WindowsME (wait.. different lawsuit).
The potential gains from a lawsuit will go to the debt holders. I would be surprised if the stockholders see any of it.
Since Be has already sold it's IP to Palm, there is 0% chance that they would ever go back into OS business and frankly, everybody else is gone.
The debt holders will reap the rewards of the lawsuit. This is how it is done. I do wonder who is paying for the attornies, since I doubt the debt holders would do that. It's probably a contigency case that somebody else already mentioned.
I worked at a distressed securities hedge fund in Manhattan for a few years, although, I mainly stuck to IT activities.
Keeping
You make a very good point.
But BeOS wasn't first a PPC thingy - It originally ran on the Hobbit processor, primarily because they were so cheap. Then the PPC 603 was available, very powerful considering how cheap it was, so they used that for their BeBox. Even though the 604 was more of a workstation CPU, and designed with SMP in mind, Be just haced up a reasonable 603 SMP setup. The idea was that 1x200 MHz processor was more epensive than 4x66 MHz or 2x133 MHz. Writing their streamlined multithreaded OS with this in mind, they could wring more performance out of cheaper hardware.
As much as this appealed the the hacker-geek, it turned out that a bit more work to get to Mac PPC 60x line was more cost effective, especially with the low end macs finally leveraging commodity components. Mac IDE was a reality, and becoming cheaper than a snazzy custom box woth a small target market (the intersection between hardware hackers and content creators).
Apple was very friendly at this time, and helped significantly with porting BeOS to Macs, which wasn't much different than the effort already underway to commoditize Apple hardware by allowing clones. This gamble was based on the increasing success of Windows PCs edging Apple out of their previous markets.
The fascism and xenophobic behaivor from Apple started after Jobs was brought on board, killing the clone program and closing off the software. And what the hell happened to MkLinux after that? Unfortunately those 3 interests of mine were slashed in one fell swoop, and The Bastard Jobs even (mass) sent me an insulting letter about how I would have just bought an Apple anyway if if weren't for (the innovative and cost-effective) Power Computing stealing 99% of their sales.
As much as I hated it, Apple never quite realized its (Gil Amelio's?) goal of becoming an open hardware platform, so Apple had every right to shut them out of their hardware. On the other hand, Intel actually supported Be pretty heavily at that time, which is why the focus at Be changed to Intel platforms, compatible with but AFAIK not optimizing for AMD processors.
Microsoft has no legit claims on x86, other than it was the most popular platform, and by nature of being the Monopoly they were entitled to shut out competeors with heavy handed tactics.
In summary, Apple hurt Be at least as much as Microsoft, but Apple didn't violate anybodys rights in doing so.
-castlan
p.s.
You have a point with the last bit too... Microsoft exchanged some beads with the creator of Quick and Dirty DOS (Seattle Softworks maybe) to gain the significant start of their empire, New York. This was a significant force in breaking the occupation by of IBM/England. Compaq was Philadelphia. And this nonsence was written by somebody who is delerious and in severe need of sleep.
My guess is both.
Why would they go for a no-monetary-gains trial? Money is what they'll use to prove damages. What exactly should Be be going for?
inkly
only without the apps!