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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 ..."
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'
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.
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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.
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"
Novell invented MS-DOS networking. If not for Novell, there would have been no usable networks in the Wintel world (here come the Vines flames!) and the Wintel sales juggernaut would have been slowed down quite a bit.
Long-timers can remember MS-Office 97 Service Pack 2, or, The Service Pack That Ate Novell. That innocuous SP broke all the Windows networking conventions (which Novell had invented!!) and rendered Netware uninstallable on W95 for about 4 months until a patch was developed. I am sure that Microsoft had no such intent when it released that patch. Very sure.We'll see.
sPh
The fact of the matter is, only a small percentage of people even want to use these fringe products. Why punish Microsoft for that?
This would be compelling if it were truthful.
The reality is that people would like alternatives to using Microsoft, but Microsoft has done everything it can to prevent Dell, HP, Compaq and others from presenting options to their customers.
The other OSes aren't getting to play on a level playing field. BeOS was a very slick OS, it had all the features that most users would want and was very user-friendly. And it never had a chance, because people weren't exposed to it. They didn't have the marketing dollars to promote it to the average computer user and they couldn't get it on PCs made by the big PC manufacturers because Microsoft did everything they could to prevent it.
I'm sure that there are people who would still buy Windows if Dell offered BeOS computers -- but the number of people who would have chosen BeOS would probably surprise you -- had they ever been offered and promoted.
If you're technically apt enough to build your own computer, you can go with an alternative OS. But the customers who want to buy a premade computer from a major manufacturer don't get a choice. Many PC manufacturers have shown interest in having a product line that doesn't include Windows -- and they've been slapped down with exclusive licensing agreements and price dis-incentives from M$ for trying to offer non M$ products.
That's why M$ should be punished. Harshly.
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.
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.
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