Slashdot Mirror
Doing the Math in the Microsoft Anti-Trust Cases
coupland writes "Bob Cringely has posted this week's column and has made some interesting comments. He says that regardless of what happens in the EU, DOJ, and class-action proceedings, Microsoft can't lose. Why? Because they make more money by paying lip-service to the law and accepting the occasional fine than by complying. He even does some simple math to prove his point. Fascinating stuff."
Judges should act quicker and allow for much less delay is anti-trust cases, because time plays against the ones they're trying to defend.
After 3 days without programming, life becomes meaningless
- The Tao of Programming
What whould you do if the parking ticket cost less than the parking meter?
To err is human. To arr is pirate.
Previously, the FCC was limited to fining $27,500 per offense - and Clear Channel, pulling in many millions a year syndicating Howard Stern, would gladly pay the small fine knowing that the 'controversy' only increased his ratings, resulting in even higher profits for them. When the FCC recently changed their fine structure to $275,000 per station per offense, that could result in many millions in fines each time... which is what resulted in Clear Channel dropping Stern from most of their stations.
In both this and the EU/Microsoft cases, small fines don't work, and large fines will either be appealled and reduced or attacked as being unreasonable. The only solutions that will actually change behavior are the ones that will cause serious economic harm, without seeming unreasonable - suspending licenses of non-complying stations, or forcing Microsoft to open code/APIs and unbundle apps (or even splitting up the different sections of the company.)
-T
Where are you from? I didn't know of anyone outside of South Dakota, who even knows about Janklow.
But you are correct, he even got a large number of "warnings" while in office. Once he got elected to the house he should have gotten a driver to drive him around (espically if the health concerns he used in his defense were vaild).
Oh, and to stay on topic. Yes, I do believe that one day MicroSofts flouting of anti-trust laws will actually get them in trouble. But, it took Janklow almost 30 years to get in trouble driving, so it might be a while.
Why? Because they make more money by paying lip-service to the law and accepting the occasional fine than by complying.
Sounds kind of like corporate corruption. If you are a corporate officer and you can pillage $100M and face a 10% chance of being caught and receiving a slap on the wrist (paying a $5M fine, being banned from being on a board for directors for five years, and publically announcing that you will stop breaking the law), what would stop you?
In Microsoft's case probably most if not all of their $52B cash pile is ill-gotten and their EU fine is what, $620M? Most government taxes are higher than the 1.2% ill-gotten-gains tax.
Happy Trails!
Erick
http://www.busyweather.com/
"The forced open-sourcing of Windows is the way to go!"
I hope to God you are kidding. Not only would this be completely unfair, but it would also be an admission that Open Source cannot compete with MS.
If you think forcing MS to open source is fair, maybe you wouldn't mind if the state turned your lawn into a public park? Property is property.
Be happy. Nothing else matters.
Step 3 is: Make so much money that the fines just become a cost of doing business.
I seem to remember[1] this being a problem with the EPA laws years ago. The cost of disposing of waste legally was more expensive than dumping it illegally and paying the fine. It's a no brainer from a business point of view. As long as non-compliance makes them more money than compliance, even with the fines, guess which they're going to choose.
[1] this might be an instance of "creative memory" rather than actual fact, but the analogy still holds.
People's desire to believe they are right is much stronger than their desire to be right.
In other news, I wouldn't care about traffic fines if they only cost a quarter.
This reminds me of the scene in the movie, where Ed Norton's character explains that if it is cheaper for a company to pay fines, than to recall a potentially-deadly product, then they will opt for the former.
This is one rather unfortunate downside of capitalism; it only works when government has enough regulatory power to compell companies not to harm its citizens. Once a government is in the pockets of business, the citizens are in big trouble.
Tubal-Cain smokes the white owl.
What not have the Federal Trade Commission declare Microsoft OS defective and pull it from shelves?
IANAL, but I believe that a product can only be pulled if it poses a (physical) danger to its users. Buggy as Windows may be, I hardly think software poses that kind of threat (unless it is used in life-threatening environments, which the EULA specifically prohibits, anyways).
In any case, there's a difference between going after a company for its behavior and removing products from the market for political reasons. Nobody should be forced to buy Windows; but if I want to use it, there's no reason I should be prevented from doing so, either.
He seems to base his whole article around the idea that Microsoft appeals simply to postpone any form of compliance so that they can continue to make as much money as possible.
I wonder if it occurs to him that maybe the appeal because they don't feel what they're doing is illegal, or at least feel the punishment handed out is too harsh.
-
There is nothing to stop the EU from retrying them and upping the fine if they keep it up. That's like saying you should get life for your first parking ticket.
Did you actually RTFA? Cringley points out that even that won't matter. The justice system moves so slowly that by the time the new trial winds down and MS has to pay the fine, they'll have earned billions more than the fine costs them, even adding in interest from the original fine date. The EU's max fine isn't enough to even dent MS.I hate to say it (because I don't care for Microsoft's actions) but I'm afraid Cringley is right, MS will win no matter what as far as the courts and anti-trust goes. Ironically the biggest threat to them is possibly Wal-mart's new PCs coming with Sun's Java Desktop on them. What's so ironic about it is that Wal-mart is another example of a company so huge that it can just ignore compliance because it'll cost it less to pay the fines.
Instead, go out and elect a President who will appoint an Attorney General who thinks that anti-trust laws need penalities that actually hurt.
These two are mutually exclusive. Anyone who can get elected will have had their campaign financed by someone that this hurts. Anyone who hasn't had their campaign financed by someone that this hurts can't get elected.
People's desire to believe they are right is much stronger than their desire to be right.
-
He kept on "paying the fine" until his car met a motorcyle and the person driving the latter was killed.
An apt analogy considering how many small companies Microsoft has killed over the years through its practices (both legal and illegal ones).But killing companies is legal. In fact, it can be good business practice...
Doesn't it make you feel good to know that our freedoms are protected by politicans, lawyers and journalists.
I don't think it's just about drivers. The hardware I use at work is pretty locked down in terms of hardware but these W2K PCs just get slower and slower as time goes on. Every so often (approx. once a year) I have to reimage my hard drive to clear out whatever it is that makes things run slow. Even my wife's PC, on which we install next to nothing beyond what it came with, is beginning to get annoying after only 4 or 5 months.
Doesn't it make you feel good to know that our freedoms are protected by politicans, lawyers and journalists.
Not only would this be completely unfair
You mean, like Microsoft's anti-competitive practices?
but it would also be an admission that Open Source cannot compete with MS.
It would be no such thing. Whether the source code to Windows is open has no bearing on how other open source products perform, except how they interact with Windows components. But closed source products would benefit the same way.
Property is property.
Intellectual property is NOT property.
People's desire to believe they are right is much stronger than their desire to be right.
What they needed in this, and many other anti-trust cases, is to think outside the box: why not use the RICO statutes? What not have the Federal Trade Commission declare Microsoft OS defective and pull it from shelves? Why not go after Bill and Steve like they did with Enron's Skilling and Lay?
Actually, Cringley peripherally touches on that question, too, by noting that Microsoft has a lot of political allies. It is, of course, a matter of popular wisdom that money buys legislation, but that's not strictly true. You are, for example, not ever going to cough up enough dough to get Tom DeLay to advocate for same-sex marriage or to get Teddy Kennedy to sponsor a bill in favor of racial segregation. All but a few of these people really are ideologically driven, and all the money buys you is wiggle room, which is significant for most politicians, but not all-consuming.
The real problem is that there is an ideological faction in Congress -- which is primarily but hardly exclusively Republican -- which sees business and making money as a good thing, and which naively reasons, therefore, that bigger business and more money must be a better thing. These ideologues are not (especially) corrupt or stupid, but they are blinded by their own dogma. The libertarian wing of the faction is particularly blinded by their adherence to the doctrine of a self-correcting market because they refuse to recognize that, all other things being equal, wealth is itself a competitive advantage.
This will not change except at the ballot box, and it will not ever be the primary issue: the average person doesn't care enough about this to choose a candidate on the basis of their feelings about Microsoft or antitrust laws.
Now, mind you, I'm not arguing against being politically active by any means, but the best way to fight Microsoft (and Oracle, Adobe, Macromedia, etc., etc., ad nauseam) is to write excellent free end-user software. Sure, it's still necessary to fend off the more ridiculous legislative initiatives and vote wisely, but in the end, making the better product will win out.
(Now, by "better", I mean better in the eyes of the average consumer, not the average software engineer, but that's a rant for another occasion.)
Proud member of the Weirdo-American community.
This reminds me of the scene in the movie, where Ed Norton's character explains that if it is cheaper for a company to pay fines, than to recall a potentially-deadly product, then they will opt for the former.
But that's the way it's SUPPOSED to be.
The company is in business solely to maximize profit. This makes it's behavior fit the definition of psychopathy/sociopathy - like about one/three percent of the population.
The government is in business to co-opt vigilantism by providing a coherent and understandable set of rules, including punishments for non-compliance that:
- convince most psychopaths/sociopaths that their best interests are served by following the rules, and
- taking out of circulation any that don't follow the rules, once it becomes clear that they won't follow them.
If the fines and other sanctions are low enough that businesses find it more profitable to be scofflaws than law-abiding, it's the fault of the GOVERNMENT, according its own legal theories.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Finally, someone else sees this. I've seen for years how MSFT signs contracts with companies it needs software of information from. They usually end up with the product one way or another and the original owner attempts court action. Microsoft drags it out long enough that the other company has no more income and must settle for pennies on the dollar for what the technology would have been worth.
Cringely takes this up to the monopoly cases and class actions but it's the same game. This is why I've been saying, since the mid 90's, that any company that works with Microsoft is on the road to distruction. Sure, you might find one or two companies that were bought out and survive within the walls of their Redmond offices but most are just crushed and their bones just tossed out with the trash.
I still can't believe Sun Microsystems tried to use another legal document to settle with Microsoft. Look at all the stuff Sun and Microsoft agreed to. Dumb! Dumb! Dumb! They should have just taken the $$$ and walked away. IMHO.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
The threat to Microsoft is not the fine. Its restrictions on bundling and opening up APIs, and its likely that these are going to imposed pretty much immediately. The reason these are significant is because of Microsoft's business model. They rely on sales, not services. This means that they need users to buy software and upgrades and they need to constantly expand to new markets. At the moment, these strategies aren't working very well. There are major complaints about support and licencing of existing installations and the attempts to expand look successful at first but are loss-makers: Last year MS server sales made a loss, and X-Box has always been hugely subsidised. Even worse for Microsoft, they are being threatened in their core market, as Linux on the desktop is starting to be taken seriously - especially in the corporate market. Microsoft is desperate to expand into the multimedia market: they want you to use Microsoft TVs, home media centres and portable media players. To do this they have to be able to sell XP embedded and bundle media player. These are key parts of the on-going EU investigation.
Microsoft is a lot less strong than it looks - its all based on share value. If in a few years time desktop share starts to fall due to corporate Linux use, users are even more reluctant to upgrade yet again or purchase 6GHz machines with 4GB memory to run Longhorn, and they have no escape route into other markets because of EU action, they won't be a happy company.