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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."
Bill Janklow was a recalcitrant breaker of traffic laws. He went on record saying, "Oh, I'll just pay the fine" even though he probably racked up enough violations to have his license taken away. He kept on "paying the fine" until his car met a motorcyle and the person driving the latter was killed.
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
Interesting take on things -- and I will say that I am no Microsoft fan. I was ticked when I had to pay the Windows tax to get a PC during the time period Microsoft got away with such tatics. Working in IT myself and being a business owner I will say that as a end user I do not trust Microsoft anymore. Not for a long time. WFW3.11 and NT had it going on back in the day. 95 came to market too soon (and no, I didn't buy). 98 wasn't any good until the se release. Me was nothing but a money grab. 2K is barely usable and XP is a joke (IMHO :).
:). New desktops are either OS X or Linux based. Period. Where possible (CAD groups) the networks have been segmented off and there's little Windows worlds that, in a couple of my offices ... can't see the Internet. Ever. Yeah, I believe it has come to that (already). Funny, but the networks always ... just work. Always.
... and I believe that it does NOT account for people like me. There's many of me out there it seems. I took my mom and dad off Windows years ago and they THANKED ME. Go figure. My contribution to the Microsoft coffers since 2000? $-0-
:). Mac's are BSD based. BSD is alive and strong, don't think it's not... Novell has gone Linux. HP and Dell want into the mix directly. What do the best tv video recorders all run on?
Funny -- of course the offices all run on Linux (and/or Netware to this day, thank you
There something wrong with this guys equations
It sure seems that with EVERY major computer type company you look at they're all going one Unix or the other. IBM is Linux. Redhat Linux (obviously
Microsoft obviously has enough money to be a around for a long while. Even while their markets are being eaten left and right. Windows is, well, a technological JOKE at best -- comparing it personally to any of the Unix's out there. OpenOffice sure isn't going away. Who knows WordPerfect may decently re-appear and there's always -X- company out there to come along. What else does Microsoft make money at? Not much.
I see their bottom line continueing to be eaten away -- left and right. Mean while their costs will continue to sky rocket and things will be, well, fun to watch...
What whould you do if the parking ticket cost less than the parking meter?
To err is human. To arr is pirate.
They're Microsoft! What, were you expecting them to play nice?
The 411 on Bill Jankow
To make laws that man cannot, and will not obey, serves to bring all law into contempt.
--E.C. Stanton
Word on the street is that Sun will get $2 billion dollars of vouchers for Windows 98 and Office 97.
A plea for relief from Microsoft's escalating anti-competitive tactics.
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
Back during the Watergate scandals, a big corp got caught making illegal contributions to a Republican slush fund. They had to pay a fine, of course. A reporter, noticing the paltry size of the fine, remarked to one of the lawyers, "I'll bet your fee was higher than that." The lawyer responded heatedly, "I should hope so!"
But don't respond with a round of lawyer bashing. That's like blaming garbagemen for pollution. Instead, go out and elect a President who will appoint an Attorney General who thinks that anti-trust laws need penalities that actually hurt.
I thought Bob was unusually long winded this time. All he is basically saying is that Microsoft have so much money that no court-imposed monetary penalty can possibly be a problem for them. This is obvious I would have thought.
Even a forced break-up, splitting up the OS and Office divisions, would probably not slow them down too much. Then you would just have 2 monopolies instead of 1.
The forced open-sourcing of Windows is the way to go!
MS has been doing this for YEARS. He's just catching on now? What about DriveSpace and the lawsuit by Stac? MS had to change a little code and Stac went out of business. MS stole Apple's quicktime coded for windows 3.11 and all they got was a slap on the wrists. Makes you wonder how much crap they actually got away with.
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/
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.
I think he dismisses the killing and maiming option far too quickly.
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.
It's my understanding that this happens very often in large corporations. There was a recent article on a large pipe manufacturer that refuses to comply with OSHA standards for factory safety because it's MUCH cheaper to pay an occasional fine than upgrade; don't think this is a tactic only big n' evil Microsoft uses.
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.
Maybe it's me, but that article was waay too long winded to state the obvious: As long as Microsoft can turn a profit after any sort of penalities given them, they have no motovation to comply to any sort of antitrust regulation.
That, and that Pulpit guy likes Geometry.
/^[A-Z0-9._%+-]+@[A-Z0-9.-]+\.[A-Z]{2,4}$/i
-
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.
0$ profit
-$699 liscencing fee
= -$699 net profit
I don't need no instructions to know how to rock!!!!
Basically Cringely is arguing that the court system, whose timetables are based on pre-industrial information flows (i.e. the time it takes a man on horse and buggy to get the handwritten documents from the lawyer's office to a court house), cannot keep up with the hijinks MS is pulling in the relatively fast-paced digital age. By the time this particular case goes through appeals, etc., the story will be ancient in computer terms. MS will have screwed consumers 50 ways from Sunday in the meantime.
As far as USPS, or European postal systems having to do with MS legal difficulties -- how do you think the documents were presented to the courts? Fax? Email? ;) Now, reflect and understand why the courts can't keep up with MS-BS.
Computers are useless. They can only give you answers.
-- Pablo Picasso
I don't know about lawsuits, but a number of European car makers (BMW, Porsche, etc.) regularly pay fines for failing to comply with the CAFE standards because it would cost them a lot more to increase their cars' gas mileage than it does to just pay the fine.
Rank Presidents by th
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.
A little sauce for the goose, my friend.
l /main552270.shtml
http://www.cbsnews.com/stories/2003/05/05/nationa
This is such a fantastically good idea. Imagine watching our congressppl(on both sides of the isle) try to explain why they can't quite support it.
Hours of entertainment ensue.
At your expense.
Literalism isn't a form of humor, it's you being irritating.
My cat's free next November...
This is the voice of World Control. I bring you Peace.
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.