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DOJ Calls EU Microsoft Decision "Unfortunate"
ogma writes "This one is especially ironic after the recent slashdot story on more of Microsoft's underhanded actions coming to light. It seems that the DOJ thinks Europe was too hard on Microsoft in its anti-trust ruling.. According to Assistant Attorney General Hewitt Pate, the fine 'may send the wrong message about antitrust enforcement priorities'..." Open Council writes "The Register points out that the EU has provided Microsoft with a major victory over its Open Source rivals because it will now be allowed to pursue royalty revenue from the APIs it publishes. Jeremy Allison says that the projects such as Samba, which he jointly leads, may face a prohibitive hurdle. The size of the fine is peanuts to MS but will be a bargain if it can lock out Open Source projects from using its API's."
It surpasses fines the Commission has imposed on price-fixing cartels and that may send the wrong message about antitrust enforcement priorities, Pate said.
It seems like it sends a perfectly clear message. DO NOT FUCK UP OR WE WILL HUNT YOU DOWN. The fine wasn't all that steep for what MS can afford. It was another quick bump in the road. What it shows me is that the EU cannot be bought as easily as the US can.
"Imposing antitrust liability on the basis of product enhancements and imposing 'code removal' remedies may produce unintended consequences," Pate said. "Sound antitrust policy must avoid chilling innovation and competition even by 'dominant' companies. A contrary approach risks protecting competitors, not competition, in ways that may ultimately harm innovation and the consumers that benefit from it."
I really don't believe that MS purchasing companies and rolling their products it into their OS makes it any better for the consumers. In fact, I find that updates to software by smaller companies comes often and usually w/o large upgrade fees. To upgrade software once it is rolled into the OS requires you to usually pay for another version and may take years. Sure, WMP9 came out but at the cost of a very harsh EULA that had consequences that outweighed its benefits.
Had the DOJ followed through on it's case properly earlier, I don't think that the EU ruling would have been so harsh. The EU felt they had to send a message that someone was going to stand up.
Hell, if the DOJ had pursued real resolution there might not have been a case in the EU as Media Player might have been unbundled then.
Media Player is not the biggest anti-competitive piece they have anyway.
It is more productive to voice thoughtful opinions (reply) than to judge (moderate) others.
Ah, yes, sending the wrong message about antitrust enforcement policies. Like, when someone is found guilty of anticompetitive behavior while a monopoly - actually enforcing a penalty so they don't do it again?
Sorry - my bad, what was I thinking of.
I am somewhat concerned with the EU's choice to allow MS to "license" the API's. From my perspective, those API's should be fully published with no license behind them. MS should not have to reveal the code behind how they work, but the API's should be publicly available, and any updates and changes to those API's (say, though a patch or service pack) should be immediatly updated.
Just my $0.02. As always, it's just my opinion, and I could be wrong.
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I don't think fining a business with 40 billion in the bank 500 million is harsh. I think the DoJ wanted them to get a slap on the wrist like always.
Yeah, it may send the "wrong" message about trust enforcement priorities.
Their job is to enforce antitrust legislation. To the extent that they have not enforced it upon Microsoft (and numerous other conglomerates) they are not doing their job and are guilty of dereliction of duty.
Are they worried this "wrong message" might get people thinking about what should be done to aggressive monopolies, and get people talking about the fact that pork and kickbacks are now driving policy in the US under the current administration?
A fine that large ain't hay, even for the $loth.
Intolerance for ambiguity is the mark of the authoritarian personality.
Microsoft programs are generally bug-free. If you visit the Microsoft hotline, you'll literally have to wait weeks if not months until someone calls in with a bug in one of our programs. 99.99% of calls turn out to be user mistakes. I know not a single less irrelevant reason for an update than bugfixes. The reasons for updates are to present more new features. -- Bill Gates, on code stability, from Focus Magazine
Fining Microsoft sounds fine but it's the wrong tool for several reasons. First, it will force Microsoft to raise prices in other ways, so the fine is a hidden tax on consumers. Second, it does not change the underlying problem, which is that Microsoft have been allowed over the last decade to establish a position from which they can control prices in a market almost devoid of real competition. Third, the timing is poor, since the EU and US are on the edge of a trade war, and the US will certainly use this as an excuse to raise barriers on EU businesses. Lastly, Microsoft will appeal and this will take years, during which there will be much argument and hostility, with no positive changes to show for it.
I don't believe for a second that Microsoft will take this fine as a warning that merits a change in behaviour. They will simply spin it into an advantage, one way or another.
What needs to be done is establish and enforce international free-competition standards via the WTO. Then, if a US company is found to be breaking these, the problem can be addressed to the right place, namely the US government.
The EU could achieve much more in the arena of competition by correcting the injustices of the patent system (which turns it into a tool for market control by large businesses), and by mandating the use of OSS licenses in all software that is developed for the EU bodies themselves.
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Naturally, installing "Windows" was the first user mistake.
Hardly surprising, giving R. Hewitt Pate was one of the men who imposed MS's wristslap by the DoJ. I wonder if there might be a conflict of interest here.
Note : Allowing your senior DoJ / government lawyers *cough, Ashcroft* to be in hock to major corporations might not be a very wise idea.
In fact, it does - what if MS files patents on the CIFS APIs ? Samba has no means how to license those, and even though, theoretically, the API is "open", it is not, in fact. And Microsoft is filling patents one after another these days. This is exactly what Register tries to point out and you have missed. Regards, Jan
From Groklaw :
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Washington State's Senator Murray Asks Bush to "Engage" the EU
"'This ruling is yet another example of the EU assaulting a successful American industry and policies that support our economic growth,' said U.S. Senator Patty Murray, a Democrat from Microsoft's home state, Washington. . .
"Murray called on the Bush administration to 'engage' the EU in settling the case. 'The EU has now directly attacked the authority of the United States and our economy in general,' she said in a statement. 'American jobs and economic interests are threatened,' she said."
Um. "Engage"? She doesn't mean sending in troops or anything, does she?
Joke.
Wait a sec. Who assaulted who? Isn't the issue whether Microsoft broke the law over there? If they did, does she suggest it shouldn't matter, because they simultaneously give Americans jobs? The article points out that corporations that do sufficient business in Europe are subject to their laws, something they could avoid by not doing business there. They could also avoid consequences by not breaking any laws. I believe that would entail reading them
Why not an injunction instead of a fine? Removing less than a billion dollars from Microsoft's $50 billion in cash isn't going cause Microsoft to do anything differently. At most it will be a embarrassing publicity problem.
The EU's goal is to provide a competitive environment where other companies will have chance. This can only be done my making Microsoft compete fairly, which means forcing a change in their corporate behavior. This won't happen by confiscating 2% of their yearly revenues.
Microsoft has shown multiples time that it is unwilling to do business on a level playing field. So instead of a fine, how about immediately imposing an injunction on Microsoft making it illegal to sell their products in Europe until they comply with the EU's terms. I think this is the only way to get them to change their corporate behavior.
---- It won't be as bad as you fear or as good as you hope, but it will take twice as long as you plan.
My understanding of US government is somewhat lacking, but what does this have to do with the DoJ? MS broke EU rules, and the EU has made a decision based on that (right or wrong). It probably does have something to do with whatever department(s) handle foreign trade and relations, but what way is that the business of the DoJ?
$500 million is enormous to most companies, but it's 1/80th of the CASH that MS has in the bank. Not 1/80 of the company's total value, 1/80th of the amount that they can write a check for. Most companies would give far more than 1/80th of their cash if it meant that was the cost of maintaining a monopoly. From a cost/benefit standpoint, MS is getting off easy. That's why certain European countries have started making traffic fines a percentage of a person's income, rather than a flat rate for everyone. $150 will make me think twice about speeding, but it's the price of lunch for a millionaire. It's the same for MS. Let me ask you this. Let's say you lie, cheat, and defraud people in a completely illegal manner for years until you've become the richest man in the world. You have $40 billion in the bank. The fine for having done all of that is $500 million. Do you think that's excessive? You get to keep the other $39.5 BILLION that you extorted from people. In the world of individuals (as opposed to corporations), thieves, extorters, and embezzlers don't get to keep what they've stolen. But MS does. At least 79/80ths of it. Peanuts my friend, peanuts.
If you mod me down, I shall become less powerful than you could possibly imagine.
this is the same protectionist EU which is absolutely drunk in love with GI (geographic indicators).
Geographic Indicators are a good idea. If the packet says parmesan cheese, that's what I want, not some inferior cheese that has chosen to exploit the popularity of parmesan. The crazy thing is that in the USA, a company can Trademark a name like "parmesan", even when parmesan has meant something very specific in the rest of the world for hundreds of years.
I think the reason the US doesn't like GI is because it doesn't have so many food products that are linked to a region like Europe does. But really, if the USA expects everyone to respect their trademarks, they should respect our product labels too. Come up with your own names for stuff, don't rip off names that have been respected in Europe for generations.
Instead of which, the little Commissars of Brussels royally screwed up by allowing MS to levy a fee for their interface specs. Which guarantees that Open Source software won't be able to use them.
Do you realize what it means?
Ii means that in one fell swoop, the Commissars kicked OSS competitiors out of MS pathway in the file and print server business. If it has been the result of bribery, I'd say "kudos to the bastards". But here, the incompetent Brussels morons apparently wanted to promote competition in this field. Unfortunately, as good carreer bureaucrats, they completely ignored the technical and market environment and used ideologically tainted views instead of reality as a decision basis. Whatever the intent, here is the result: Samba will be unable to develop new versions to follow MS changes without paying. Which they can't. So Samba will become incompatible and irrelevant. Linux will not be able to interface with future Windows 200x servers. The lock-out will be complete.
To paraphrase Linus, the destruction of Samba will be "a completely unintentional side effect". Nevertheless, that's what the Brussels Buffoons achieved. Which was to be expected, since after all, they are bureaucrats, not techies.
Heck, paying $600M for this result is a piffle. MS would gladly have payed ten times that to kill Samba, only people would have cried foul. But I'm sure Balmer is giggling right now: "Hey Bill, look at that, the Linux crowd is cheering 'cuz we have to pay the equivalent of 3 weeks of revenue!" - "Yes, Steve, little do the fools realize that we just completely won."
Once again, EU snatches defeat from the jaws of victory. And there was much rejoicing (in megacorp orations' board rooms).
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