MS Faces Hard Sell in EU Antitrust Case

juicy_pants writes "The software giant emerged virtually unscathed in November from an eight-year battle with U.S. federal and state authorities over how its violations of antitrust laws should be rectified. But it may not fare as well in another major antitrust case, now entering its final phase at European Union headquarters in Brussels."

Comments

Lawsuit XP

[kbonapart]

The Justice Department released today the long awaited upgrade to the "Lawsuit `92" This update will fix the "Well there is always Linux" bug, and the ever persistant crashing or the case's funding.

This quote is priceless :)

[graveyhead]

Microsoft worries that competitors such as Sun Microsystems Inc. would use that information to clone its servers.

Oh yeah, THAT'LL happen... I can just imagine Scott McNealy saying "Hey, I got a great idea! We've been spending far too much time and money on this 'Solaris' thing. Let's implement Windows NT!"

I think what they don't really want to come out and say here is that they don't want Solaris to play nice with Windows (wasn't there a fiasco with Samba a couple years ago?)

Re:This quote is priceless :)

[DrXym]

Itemise all the things that would be required to make Solaris or Linux a drop-in replacement for NT and protocols would be top of the list.

I can well imagine that if all the various protocols implemented by MS were fully documented that Sun or others could very well sell a box that mimiced an NT to such a degree that people would be able to migrate away from it completely.

That's what Microsoft is afraid of.

Cool

[autopr0n]

Lets face it, this is really all political. I doubt the EU will be as lenient as the US has been, simply because it's not at all in their interests to have a powerful company based in the US controlling their desktops. Not that the US really does, but M$ is really a huge and powerfull company. It's value to our economy is enormous.

The really intresting thing is that for the first time there's a real alternative to microsoft in the form of Linux and Free software. The rest of the world is jumping on it in order to escape.

Re:Cool

[NigelJohnstone]

"Not that the US really does, but M$ is really a huge and powerfull company. It's value to our economy is enormous."

Do you really think so? I don't.

For a few reasons:

firstly the various companies (Netscape, Novell, Real etc.) that they have killed or are attempting to kill are all US companies, so success or failure in killing them doesn't help the US.

Secondly, they have 40 billion tied up in defensive investments and cash - thats dead money in the US economy.

Thirdly, they are no different from Wang, Polaroid or any other large company thats had success and simply churns the same old ideas. If Wang was allowed to lock us into wordprocessors, we would never have had the PC. If polaroid locked us into instant cameras, we would never have had the digital camera and so on. Who knows how many great new ideas would have come out if the PC software market was not locked down.

Fourthly, a large chunk of that money is going on foreign subsidies in markets where Microsoft isn't strong and on new development centers in India and China. They're training the US's future competition just as much as the next major US corp.

Fifth, the License 6 money came from markets where Microsoft dominates, which for the most part means they took it straight out of US IT budgets (their biggest market).
They contributed to the wave of IT sackings, but they don't pick up the unemployment cheques.

Sixth, these license revenue tricks makes their earnings look better, so US NASDAQ money goes into Microsoft shares instead of other NASDAQ startups. Those other companies may be the *next* Microsoft.

So no, I don't think this is healthy, even for the US.

Re:Cool

[fymidos]

>It's value to our economy is enormous.

really think so? Its' impact on the economy is enormous, its' value though...
The presence of monopolies is devastating for the free economy. I remember reading an article back in '98 stating that microsoft would actually like a fall of the dot.com business, as it is big enough to handle it, while all those rising little companies would be eliminated. The field is clear on the web business, 4 years later.

Re:Cool

[Melantha_Bacchae]

autopr0n wrote:

> Lets face it, this is really all political. I doubt the EU will
> be as lenient as the US has been, simply because it's not
> at all in their interests to have a powerful company based
> in the US controlling their desktops.

That's true. But normally they would face intense pressure from the US government to drop it. However, now they are facing intense pressure from the US government to march on Bagdad, which means they might slip a judgment in against Microsoft relatively unnoticed. The US (my government) appears to be getting quite frivolous in the random slapping on of economic sanctions, as they are proposing slapping them on Germany for daring to disagree over Iraq.

Once sanctions have been used, what does the US have left to twist the arms of fellow nations over Microsoft? Mind you, the US should not be arm twisting sovereign nations, but I don't think Bush views other nations as all that sovereign. His loss.

> Not that the US really does, but M$ is really a huge and
> powerfull company. It's value to our economy is
> enormous.

Microsoft is a medium sized corporation (IBM is far larger). Its value to our economy comes from illegally abusing its monopolies (it butchered other companies and achieved a strangle hold over its markets). From that economic value, you must subtract:

1) the massive profit margin on Windows and Office milked from its customers.

2) money extorted from companies via Licensing 6 and costly BSA audits.

3) the productivity cost and damages to data from Microsoft's swarm of bugs and security holes.

4) the cost to our technological future by having a monopoly squashing other companies and the innovations they would bring to the market.

The result of your subtraction: it becomes obvious that a big greedy tick has hung on the side of the US economy for years. A tick that would be painful to remove, but that must be removed for the long term health of the economy.

> The really intresting thing is that for the first time there's
> a real alternative to microsoft in the form of Linux and
> Free software. The rest of the world is jumping on it in
> order to escape.

First time? Gee, where has Apple been all these years? Apple is better positioned as a desktop competitor to Microsoft. Don't worry though, Linux can make it on the desktop. Watch us, we'll show you how it's done. Then we can play all kinds of fun, healthy competitive games while sharing our open source with each other (like KHTML). It'll be great! You little waddling penguins are gonna have to get into shape though, if you are going to out run a Jaguar and out fly Mothra. Catch us if you can. :)

"Mothra Leo, the fluttering of your wings is Life!"
Japanese language song "Mothra Leo", "Rebirth of Mothra"
(Mothra resurrected an apple tree and the surrounding 8,000 acres of scorched earth,
six days before Apple's surprise announcement of the return of Steve Jobs.)

They were going to bribe the EU politicans

[gatesh8r]

But they couldn't figure out how to convert US dollars to Euros...

Re:They were going to bribe the EU politicans

[MonTemplar]

But they couldn't figure out how to convert US dollars to Euros...

Swap the Dollar symbol for the Euro symbol, like everyone else, surely! :)

Mario Monti

[Vollernurd]

Mario Monti, the EU competition comissioner is a real ball-buster. MS will have more trouble "buying" the trust of the Eurocrats than they did in the US. It will just be interesting to see what they end up doing.

BTW, when I say "US", I refer, of course, to the administration, not the citizens.

Where does the money go?

[caluml]

I'm sure it's partly due to the fact that Microsoft is a US company, and is a large money spinner for you guys.

Over here, slowing down the torrent of money that floods out of Europe into the US can't be a bad thing for us.

It's another reason why Open Source is good for non-US countries - money doesn't go to Microsoft, Sun, IBM etc - it stays in the local country (consultants, etc)

PS. I'm posting this over 3G - is it a first for ./ ?

Painful to watch

[rhyd]

MS will be found guilty and given the biggest fine ever. MS appeal - and the appeal process takes forever - RealPlayer fades away (nobody notices or cares)- Bill Gates donates $100M to fight AIDS in eastern Europe and is lauded as Europe's hero, a selfless white knight whose moral integrity should never be questioned again.

Re:Painful to watch

[Selanit]

MS will be found guilty and given the biggest fine ever. MS appeal - and the appeal process takes forever - RealPlayer fades away (nobody notices or cares)- Bill Gates donates $100M to fight AIDS in eastern Europe and is lauded as Europe's hero, a selfless white knight whose moral integrity should never be questioned again.

Here's an alternate scenario.

MS is found guilty and given the biggest fine ever. (10% of their total global revenue is the upper limit, according to the article - so 2.8 billion dollars.) They appeal. The appeal takes forever. RealPlayer fades away, and there is much rejoicing.

Now the interesting part: the appeals run out, MS is still guilty, and with all appeals exhausted, they have to pay the huge fine. They pay it. The EU promptly uses the money to hire a bunch of crackerjack programmers to make the Linux desktop a true drop-in replacement for Windows. The code is GPL'ed.

Or, on an even wilder flight of fancy, MS in its arrogance refuses to pay the fine. The EU slaps a heavy tariff on all MS products, and diverts the revenue from that tariff to Linux desktop development. The code is GPL'ed, and the ongoing revenue stream from the tariff means that they can keep working on it till there's no good reason not to use Linux.

Not that I think that MS would be stupid enough to refuse to pay a fine. But one can always dream, right?

Where was the anti-trust officer re Opera ?

[NigelJohnstone]

Yeh they really blew it with that Opera attack.

Where exactly was the anti-trust officer when Microsoft's websites were sending Opera bad style sheets? Isn't this exactly the sort of thing he was appointed to prevent?

So they proved to the world that the enforcement officer was just a sham concession.

Also another question. If MS can't see anything morally wrong between throwing a bad style sheet to disadvantage a competitor, how do we know that Microsoft doesn't also make the cache a little slower for Oracle, or the sockets a little slower when connecting to Sun?

I mean if they did that to code that we can see, what the hell are they doing with the code we can't see in Windows?

Re:Where was the anti-trust officer re Opera ?

[rseuhs]

I mean if they did that to code that we can see, what the hell are they doing with the code we can't see in Windows?

This is probably one of the most insightful sentences I have seen lately on slashdot.

A simple, easily implemented suggestion for EU

[Anonymous Bullard]

EU should require that file formats being used in software sold in Europe are publically documented in full to prevent the twisted (and existing) situation where customers are required to unnecessary buy upgrades for their software when other parts of the whole environment are made obsolete. Users should never be forced to pay just to continue accessing their own data. That would go a long way towards solving the root of the problem, instead of only chasing the ever-changing symptoms. Such requirement would also be totally fair since the real innovation lies in developing new features and ideas on manipulating the data and not in intentionally obscured ways of putting strings of data on a file.

Also, Microsoft's anti-competitive power and their ability to use it is not just about Windows and its ever-mutating versions. Having some government geeks take a peek at the OS "shared source" does nothing to guarantee a competitive marketplace. It's about the apps. Requiring standards compliance allows the all suitable, competitively priced and well-supported software to succeed yet without locking anyone out of the market.

Re:A simple, easily implemented suggestion for EU

[Anonymous Coward]

> Users should never be forced to pay just to continue accessing their own data.

As we go from a software buy to a software rental model, users are going to pay to continue accessing thier own data.

That's the whole idea of software rental.

GE couldn't make EU to say "Yes"

[LinuxXPHybrid]

> I doubt the EU will be as lenient as the US has been...

MS has been spending a lot of time and $ and lobbying in Washington to handle the anti trust suit domestically, and they've been very successful. However, apparently, even with that money and power MS can't handle European politics.

> ... whose past victims include General Electric Co.'s legendary former chairman Jack Welch (from the article)

The article is talking about Honeywell acquisition right? MS is becoming a big player in Washington, but I'm guessing that GE is still a bigger player in Washington and the world politics. They couldn't make EU to say "Yes", so it'll be tough for MS. Of course, it's not that I'm taking their (MS) side though.

Nothings changes, move along...

[rusty spoon]

Maybe I'm being too cynical but I seriously doubt anything will change.

The worst that will happen from MS's POV is that they'll waste a bunch of money on lawyers and maybe pay a big fine...and *possibly* have to publish documentation for some stuff they don't currently publish.

I'm pretty sure it will be a harder punishment than the US gave them but it won't be enough to hurt.

Nothing will change, just like nothing has changed since the US anti-trust stuff.

Re:nothing to lose

[gotan]

The USA's was supposed to "screw" Microsoft, because Microsoft so blatantly screws their competitors and their customers. But it wasn't to be, Mr. G. W. Bush announced, even before he cheated his way into the white house, that Microsoft would get off easily and so it happened. So the USA decided not to apply their own laws to get a grip on Microsofts monopolistic bullying, and now you're complaining when other countries don't let Microsoft as easy off the hook as the USA? The EU would probably benefit more from regulating the MS-monopoly than the USA, but how is that a reason not to apply EU law in this case?

Re:EU here we come: I wouldn't recommend it.

[moonbender]

(Note: I'm German. We've got problems of our own, but nevertheless:) Agreed, the state of affairs in Italy is pretty terrible. I'm always horrified when I see a TV report on Berlusconi's latest madness, I can't believe stuff like this is happening in 21st century's Europe. I wish some European politicians would speak up (as they did in the case of Austria's Haider - this seems more serious and thus far worse to me), but I assume they can't afford more open internal distress at the moment. Or something.
Of course, your laws on marijuana are apparently a bit more advanced than ours. ;) But I think we're getting there, too.

Oh and I know this is off-topic. I don't care - this is important enough to burn some karma on.

How about the bundling of Windows with hardware?

[irexe]

All the anti-MS cases so far have focused upon the fact that Microsoft bundles software with its OS. There is another, more serious matter going on though: Try to buy an A-brand laptop these days without Windows. It is virtually impossible.

Microsoft's OEM license differs from the normal Windows XP license in that it shifts the refund burden upon the manufacturer. If, by chance or design, the manufacturer does not want to give you a refund for Windows, you are stuck with a top-dollar license for an OS you are never going to use. Microsoft cannot be blamed, because it is apparently the free choice of the manufacturers to ship whatever they want with their laptops.

In Europe, there are laws against bundled sales. Basically, they say that you can't force a consumer to buy a product A when buying a product B. While these laws would certainly inhibit Microsoft from bundling their software with their OS, it does _not_ stop laptop manufacturers from bundling the OS with the hardware. Why not? Well, let's do the math:

An exception to this bundled sales law states that, if a retailer has less than 30% of both markets (in this case the retailer is, say, Sony and the markets are the OS- and laptop-markets) then, the retailer _can_ bundle products. So, if all the laptop manufacturers ship Windows with their product, that is perfectly legal, as long as no single manufacturer grabs more than 30% of the laptop market. Divide and conquer.

Of course, since nearly all laptop sales are from said big manufacturers, somewhere along this line, the consumer is screwed. It boils down to the choice of buying either a B-brand laptop without Windows or an A-brand laptop, at the cost of a voluntary 260 euro donation to Microsoft. This is immoral. It is however not illegal. Shouldn't it be?

and more...

[Ender Ryan]

Microsoft is also attempting to lock down the computer so it is no longer a general computing device. The are attempting to turn it into a black box that you can't fiddle with.

If they are successful, where are all of the U.S.'s future programmers going to come from? They won't be allowed to tinker with computers in any way not sanctioned by MS, enforced by U.S. law, so either the pool of programmers will shrink to the point of disappearing, or they will come from outside the U.S.

But what about security profressionals? While we will still have some programmers, because MS will allow people to learn the MS way of doing things in schools, security professionals depend on researching how to break systems, hack into them, how the system works on the lowest level, etc.. Are we going to hire foreign security experts to work on things our national security depends on? It will become literally impossible to legally become a security expert in the U.S., and in fact that is already starting to happen.

We're really shooting ourselves in the head, over here in the land of the "free".

Another step further

[WindBourne]

MS charges various prices on different products in different countries. In china,XP is USD 5.00. MS now ssends 100's of millions of USD to China in an attempt to keep Linux out. China has not put that much money into MS's coffers. Most of those "donations" is coming from the US economy as we are paying the top dollars. The same goes for India, Africa, and South America donations. Basically, we get screwed all the way around by MS.

Media player bundling and innovation

[jonabbey]

Microsoft's position has been that unbundling Media Player would tear an irreparable hole in Windows and stifle future innovation.

This is one of the more blatant examples of Microsoft's attempts to monopolize through bundling.

They made a similar case with IE.. "if we rip out IE, all the programs that have been written to include web page display functionality will break. <heavy sigh/> we could hide the icon, maybe."

The thing is, if they ripped out media player, what it would break would be the ability of software written for windows to display.. some Microsoft proprietary data formats.

Of course, this is one of those areas where you have a tipping point.. get enough users to write 'software' in your media player, and pretty soon you can't have new competition, because your new competition will be legally prohibited from playing your content, either through copyright law, patent law, or DRM/DMCA.

The EU is right to be looking at this.