Microsoft Settles Be Antitrust Suit for $23.25M

ewhac writes "Without admitting wrongdoing, Microsoft today agreed to pay $23,250,000 to Be, Inc., to settle anti-trust claims against the software giant. The payout is anticipated to be used to complete the orderly dissolution of the company. Shortly after announcing sale of key assets to Palm, Be, Inc., filed suit against Microsoft in February 2002, alleging destruction of its business via illegal exclusionary and anti-competitive business practices."

Comments

It is suggested

[mao che minh]

How does one willingly pay $25,250,000, without trial, and not admit to wrong doing? An admittance of guilt is suggested under such circumstances.

Re:It is suggested

[boneshintai]

It's mostly to keep it from being used against them later in court, when other people sue them for the same type of thing.

I believe that was the grandparent's point. A settlement this large is a de facto admission of wrongdoing, regardless of the wording of the settlement. This should be usable against them in court in the future, whether they want it to be or not. It's no longer up to them, ideally.

They are paying off a complaint because they do not feel that the legal system, which is ultimately designed to protect the innocent[0] will protect them. Ergo they must feel, on some level, that what they did is seen by the masses as wrong.

Legal boilerplate should never overrule common sense, but it does. Frequently.

[0] implementation consequences notwithstanding, that is the intent.

Re:It is suggested

[Anonymous Coward]

It really has nothing to do with what they "admit" or "feel" -- A federal court found them to be an illegally maintained monopoly, and that means cash in the bank for anyone who was competing against them.

Settling these cases gets them out of the quarterly reports and gets Wall Street to stop thinking about MS's legal problems.

Also, this settlement is jackshit. Even DR-DOS got more money.

Re:It is suggested

[1029]

Gee, thats such an astute observation...

Of course it is totally wrong. It is called a settlement for a reason. You settle the dispute without any more court hearings and without admitting to anything. You simply pay an amount of money you find acceptable to not have to deal with the situation anymore.

Why is it that because MS can afford $23million without blinking that they must be admiting guilt? Would it be the same if the settled for $1 million, $1000, $1? Because all of those amounts are too much for MS to simply toss out there to get things done with and over.

That said, past behavior dictates erring on the side of MS using illegal tactics to squash competition. But it still doesn't mean paying $23mil means admission of anything, other than admission that MS has at least $23 mil in the bank.

Re:It is suggested

[eddie can read]

They are paying off a complaint because they do not feel that the legal system, which is ultimately designed to protect the innocent[0] will protect them. Ergo they must feel, on some level, that what they did is seen by the masses as wrong.

You're confusing a lot of things.

1) What a judge will rule is not equal to what the masses think, so your comment about the masses doesn't follow from their action.

2) Just because the justice system is "designed" to protect the innocent doesn't mean it actually protects the innocent, so your comment about feeling or not feeling innocent doesn't follow from their action.

There is the chance of an unjust ruling which has to be taken into consideration when deciding whether to settle.

There are the costs of defending themselves in court which may or may not be recovered by the innocent party.

3) Your logic applies also to Be, since the fact that they settled could be taken to suggest that they don't think they have much of a case.

Interesting

[GigsVT]

While $23 million is peanuts to MS, it makes you wonder why they would even bother settling this, it's not like Be had the resources to fight them in court.

Re:Interesting

[mod_parent_down]

Probably afraid of what might have been revealed publicly by the lawsuit.

And now we can only suspect, speculate, and wave goodbye.

thats

[minus_273]

23 million well spent. probably cost less than an Ad campaitgn on the major networks.

Not good for Linux

[chill]

The suit was about MS pressuring OEMs to not install other OSes on hard drives of machines they shipped. They did NOT want to see a dual-boot situation.

One of the big issues is getting end-users to install another OS. Since most people never have to install an OS, it is a daunting concept no matter how easy it is.

The whole effort in making Linux so easy to install derived from this.

Now, with the settlement, MS doesn't have to defend this practice in court. They don't admit guilt and can keep on pressuring OEMs to not install alternatives to Windows on new machines.

$23+ million is chump change if it avoids getting dragged into court and having this practice under scrutiny.

Re:Not good for Linux

[Darth]

Did you miss that whole anti-trust thing? MS WAS dragged into court and all the lured details came out. MS won and came out stronger then they were before

technical correction:

Microsoft lost and came out stronger than they were before.

Here is what this means

[erikharrison]

The essence of the "voluntary" dissolution of Be means that this money will not go to a sudden resurrection of the BeOS, as some have thought (foolishly hoped, perhaps).

Be Inc wisely (I think) dissolved "voluntarily" and did its best to ensure that investors did not get the short end of the stick. Be sold off all their intellectual property to Palm, and passed the cash amongst stock owners, minus costs. Be then had a single purpose - pursue the MS lawsuit. This money will be passed about, minus expences, to stock holders.

Then all Be will be is a trademarked logo.

MS employee karma

[EreIamJH]

I wonder what the morale must be like among the programmers/technicians employed by MS? Every day they must be reading about MS security holes, crashing MS apps, or the latest MS abuse of market power. Their karma must but so low when they shuffle off to pick up their pay cheque.

Re:Microsoft Owns yahoo?

[xonker]

The ending paragraph of that article

It would be disturbing if it were an article, but it's a press release, not an article. Press releases frequently carry such garbage.

Re:Now that's justice...

[enkidu]

If they were trying to prevent OEMs from shipping another OS altogether, then maybe I'd take up a pitchfork too. Be had a chance to be competitive and chose the whine and sue road to success.

Uhmmm, if you don't know shit about what happened, shut the fuck up. Sorry for the strong language, but that is precisely what Microsoft did. Not only were vendors prohibited from shipping dual boot machines, but if they tried to ship machines with only BeOS on them, Microsoft would have

• Still charged them for the Windows license
• Changed their "partner status" so they wouldn't get anymore kickbacks discounts etc., raising the costs of ALL of their copies of Windows.

Be offered their BeOS for FREE to any OEM who would install it on their machines. The end result was not a single top-20 pc manufacturer shipped any machines loaded with BeOS or dual booted with BeOS. A few manufacturers shipped with BeOS on hidden partitions requiring an arcane complex series to steps to activate.

$23.5 million? Chump change. They should have gotten at least $235 million if not $2.35 billion. There is no justice.

Re:Drop in the bucket

[tambo]

Once-invulnerable Microsoft has now had to settle a number of actions such as this.
Yeah, but here's the problem: a one-time fee penalty can't really remedy never really compensate for the permanent elimination of a market competitor. By eliminating Netscape, Microsoft secured a permanent (and quite effective) internet browser monopoly.

Look at it a different way: Microsoft can continue to own that market and cannot get sued over this incident again. So instead of thinking about the fee as a legal penalty, you can think of it as Microsoft buying a (very expensive) license to monopolize the market. It works out the same way.

Eventually, the legal system will have to come to grips with the fact that its current M.O. of penalizing corporations isn't deterring anyone. They smile, pay it, and move on to bigger and better market exploits.

What they really didn't want was a full-dress jury trial where all of what Microsoft did to them would have been fleshed out for all to see.

Eh? Why would they care? They've had several incidents of antitrust very publicly resolved against them. (Netscape; Lotus 1-2-3; that DoubleSpace case... and a hundred small cases of patent theft or breaches of contracts with small companies that were decimated in the struggle.) The public knows they're monopolists - it's been a consistent business method for much of their existence. What's one more suit?

Nah, the real reason is that it's just the cheapest way of resolving this claim. They have no hope of winning or swaying public opinion; they don't even care any more. Just cut bait at bottom dollar and move on.

- David Stein

Re:Anticompetitive?

[fermion]

The thing is that competition is good, and MS just does not have enough to be forced to create a truly great product. They could if they had to. They just don't have to.

Let me tell you a story. I once worked for a company that was able to charge a lot of money for an adequate product. There was no competition, so we could pretty much name our price. We had to keep quality at a tolerable level, but not the level the customer really wanted. We tended to use processes and equipment that was quite old.

These factors caused many economic problems. The company had money, but was not developing or consuming new technology at a rate comparable to the amount of cash on hand. This probably resulted in few overall jobs, but richer principles in the company. Also, the companies customers had to spend time working on our quality issues rather than creating better products for the end user. Also, the companies customers had to pay our 'inflated' prices rather that using that money to upgrade their facilities.

Eventually competition came in the form of Asian manufacturers with modern equipment and processes. The company spent money trying to quickly upgrade equipment and procedures. The competition produced products of equivalent quality at about half the price. Things were no longer great for the company, but times were much better for the companies vendors and customers. Quality increased and jobs were created in the US as the company was forced to modernize the facility.

Which is to say that the free market and capitalism depends on active competitions. While there may be nothing wrong with MS maintaining a monopoly on x86 systems, it does not help the American economy. Manufacturing jobs are being lost at an alarming rate, programming jobs are being lost at an alarming rate, and MS sits there with billions of dollars in the bank and an OS that desperately needs improvement in quality. They could do it.

But there is no competition. There is no other OS that threatens their market share. The vendors are in trouble because MS had no need to upgrade their facilities. The customers are in trouble because MS does not have to charge true market value. There has been no significant feature changes in Windows or Office for at least 5 years. Yet there has also been no retail price change. Admittedly Office now contains VPC, but still we are paying $200 for VPC and $250 for a five year old office suite.

I would suggest that if competition did exist the customer would pay a lower true market price. I suggest that MS would have to hire programmer and buy equipment. I suggest that the previously unemployed programmer would have money to buy durable goods. The manufactures of the durable goods would then hire workers to create the goods. And so on.

This is certainly a simplistic economic view, but the point is that we allow companies to create monopolies and these monopolies cause nothing but problems in the free market . Money collects in unproductive spaces. Technology and process stagnate. And China and India create better cheaper products while American CEO claim ignorance and disbelief at the unfairness of it all and demand that congress enact dangerous protectionist measure to help keep American jobs. They could have just spent some of thier cash reserves on implemeting the new technology, but that never occurs to the CEO.

Re:If I understand correctly

[Alsee]

The PC vendors asked Microsoft out on a date... After dating for a while, a new girl shows up (Be), and some PC vendors ask her to dinner... decide they prefer Microsoft, so they leave Be to go patch things up with MSFT.

You have it about right, except for the fact that Microsoft violated at least a half dozen laws in the process. Microsoft is that psychotic girlfriend who makes making illegal threats to anyone Be works with, illegally sabotages the strip-mall where Be gets a job, and who illegally interferes with Be's bank affairs.

Try reading the legal complaint. Hell, Microsoft has already been convicted on most of these charges. It's more like the movie Fatal attraction with the added bonus that Glenn Close is a prison babe on parole and Michael Duglass decides to marry the psycho bitch to avoid getting killed by her.

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