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 ..."

Comments

There's this going for it...

[CaptainCarrot]

Today Be employes a single person in a tiny office in Mountain View. Great ..."

At least they won't have any problem demonstrating irreparable harm.

Why now?

[Pyromage]

Today it employs only one person in a tiny office...

Sounds like you're wondering why they'd do so *now* of all times, when they can't do anything.

Easy: Nothing to lose. The company has nothing left. Normally it is unwise to sue MS. They'll just drag it on and you won't get a significant gain (i.e. Apple's suit), even if you do win. But now, the worst the spending can do is bankrupt them: which is basically where they stand now anyway. OTOH, the damages they could land could put Be back on its feet.

Sounds like the smartest option left to them.

Re:Why now?

[grammar nazi]

I got a little news for all you supposed stockholders. If Be is in the current state which they seem to be in right now, then they owe NOTHING to stockholders. The debtholders make the calls for the company now. Stockholders are typically LAST to recieve anything when it comes to profits or paying off debts for an distressed company. Typically, especially if the company has filed Chapter 11, the shareholders lose all of their voting rights. The Debt holders (Bond holders, Asset owners, Leasers, Banks) come in and literally make the calls.

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.

Re:One Employee?

[bryanbrunton]

Considering the current state of the Be, they should probably change their name to Was.

need to prove Intel/Microsoft collusion

[rjnagle]

Well, I wish the litigator success, because it would definitely be a boon for PC's sold today to come equipped with more than one OS. However, nobody put a gun to the head of the OEM's who produced single system PC's. To win this case, you would need to demonstrate that the contracts between Microsoft and OEM's violated antitrust laws. Quite frankly, I doubt that this could be shown. Despite the finding of fact in the antitrust lawsuit, you would have to show that it was impossible or next to impossible for OEM's to sell PC's with alternate OS's.

But Dell has been able to sell Linux (which apparently they dropped, but don't worry, HP is now selling them). And other PC companies have been able to do the same (albeit in limited numbers).

To prove that it was impossible for OEM's to sell PC's with alternate OS's, you would need to demonstrate some sort of collusion between Microsoft and Intel, making it difficult for developers to produce alternate OS's on Intel CPU's. That clearly has not happened. The x86 Intel platform certainly didn't hinder kernel development, and Intel has been relatively open about publishing specs.

Good luck Be. Truly, I feel your pain.

Robert Nagle Idiotprogrammer
Austin, Texas, idiotprogrammer, Technical writer

Re:need to prove Intel/Microsoft collusion

[CaptainCarrot]

There was an old tagline for Schlitz beer: "When you're out of Schlitz, you're out of beer." To which liquor store owners would frequently retort, "Yeah, but when you're out of Bud, you're out of business." Sure, sell all the brands of beer you want. If you don't have the most popular brand though, you're going to run out of customers sooner or later. Probably sooner.

The question wasn't whether anyone could have sold machines with non-MS OSs; clearly they could because some did. It's rather whether or not you could run a business exclusively selling machines with non-MS OSs. When the basic requirement to sell Windows pre-installed on your machines at all is to purchase a Windows license for every machine you sell regardless of whether or not it's actually installed, and when you're forbidden under the terms of the OEM agreement to sell machines with some other OS installed next to Windows, it simply does not make economic sense to offer more than one pre-installed OS. In that case, which OS are you going to choose? If you don't choose Windows, you're in a situation analagous to that of the liquor store owner who chooses not to sell Bud, but with a vengeance. Instead of locking out 50% of the market (or whatever Budweiser's market share is) you're locking out 99%. That's just foolish. It's a formula for going out of business. If it was a workable buisness model, VA Software would still be VA Linux.

Maybe, just maybe, if you're Dell or HP you have enough muscle to get MS to strike the offending clauses from its standard OEM contract. But for Joe's OEM and Bait Shop around the corner here, it would be impossible. To sell any other OS than Windows would be financial suicide.

Re:need to prove Intel/Microsoft collusion

[taco1991]

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

Re:need to prove Intel/Microsoft collusion

[dinotrac]

Actually, Microsoft did put a gun to the heads of OEMs and the DOJ blundered miserably in not making it one of the elements of their case.

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.

Ode to my BeBox

[slithytove]

Elizabeth sits in a closet now
and the blissful memories fade
visions of objects and mime-types
and the neat little scripts that i made

Hope for the future has past
from my elegant blue Beth
to various *n*x machines
what little hope I have left

For as much as gnu's full of bounty
and the empire looks to fall from it's hill
I remember a time that was simpler
only a BeBox my wish could fulfill

You knew it would happen.

[Anonymous Coward]

When Be had an agreement to ship pre-installed on laptops from a major distributor (I forget, was it HP?) Microsoft stepped in and said "did you read your license agreement? You can install other operating systems if you want, but you cannot boot from them or display how to get to them." So the machines shipped with Be installed, but most people never knew it. This cost Be quite a bit of money.

They tried to get the DoJ to use this in the antitrust trial, but the DoJ said that their case was for illigal tying, not for exclusionary agreements. DoJ urged Be to go to trial separately.

When BeOS was purchased not too long ago, they reserved the right to sue MS based on the judgement of the court in the DoJ trial. Since it appears that the DoJ sold out, Be is finally doing what they should have done earlier.

Better late than never. Good luck, Be!

The Death of a Thousand Cuts Begins

[sterno]

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.

Re:What a surprise...

[Doomdark]

Well, it's hardly a secret that, yes, Microsoft has had (perhaps still has?) the problematic deals with hardware manufacturers. Problematic in the sense that the practices were closer to mafia than normal businesses ("we'll make you an offer you can't refuse"). It's not that big dealers got discounts; it was that the choice was pretty much down to "pay for windows install for every single machine you sell or we won't sell you any copies, ever, you pirate scum". Guess if it's easy for any other OS vendor to get their OS pre-installed as Microsoft-tax has already been paid?

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)

BE is going to win or lose

[da_Den_man]

I think people are missing the brilliance of this tactic. Yes, Be is no more. It has ceased to Be. (haha) However, they are illustrating the WHOLE POINT of suing by being out of business.

What better way to illustrate a Monopoly that prohibited vendors from bundling competing products, therby limiting the market and competition to any Microsoft monopoly, than to be a competing product driven out of business by the same monopoly?

Now, as long as they can afford the legal fee's, they may actually have a chance at illsutrating WHY MS should be broken up, and WHY MS IS a monopoly in the truest sense of the word.

Re:Unpopular opinion follows

[RelliK]

Oh please! Let's beat the dead horse again.

Signing exclusive agreements is NOT illegal!

This has been covered extensively in the antitrust decision (which, BTW, was upheld unanimously by 9 appelate judges). The exclusive agreements are illegal when you have a monopoly in that particular market. Microsoft has a monopoly in the OS market. (*) Therefore, the exclusive agreemets are illegal. End of story. You'd do well to actually get a clue before spouting nonsense.

(*) Oh, and before some moron decides to beat the "MS is not a monopoly" horse, I will not argue with that. I'll merely point out that the district judge and 9 appellate judges disagree with you. And they probably understand the laws a bit better than you.

Kind of funny seeing this on /.

[sheldon]

I recall all the articles posted to slashdot about BeOS, and how nearly every one of them was greeted by jeers and disgust.

"Be wasn't free, it wasn't open source. Who wants to use that crap anyway?" was the response of the /. masses.

Now the slashdot masses want to complain that Microsoft killed Be?

This is hilarious. :-)