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."

Comments

"Oh, I'll just pay the fine..."

[vudufixit]

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.

Postponing trials and appealing...

[Phisbut]

Any company that can afford the legal game and then postpone the trial and then appealing the decision will make more money by doing that than by complying. Considering they (Microsoft or any other company) can still use their current strategy during the time of the appeal, or before the final judgment is made (it took what? 5 years for the WMP case in Europe?), a couple of million of Euros is nothing compared to what they did in those 5 years.

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.

What a suprise

[imgumbydamnit]

What whould you do if the parking ticket cost less than the parking meter?

How they'll pay Sun Microsystems...

[Anonymous Coward]

Word on the street is that Sun will get $2 billion dollars of vouchers for Windows 98 and Office 97.

Same concept as the old-style FCC finings

[Theaetetus]

... with Howard Stern.

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

Fines are not Punishment

[erick99]

I think a lot of folks equate monetary fines as the equivalent of punishment. I supposed that the EU and other such bodies might also think that monetary fines are punishing. However, as a psychologist, I know that punishment, by definition, reduces or eliminates the target behavior. I don't think that Microsoft even finds these fines as particular noxious. It's just a cost of doing business. So, if these legal bodies that go after Microsoft want to do something *punishing* so that they can reduce/eliminate certain behaviors, then they have to do something like putting executives in jail. Bill Gates might not care much about a $600M check, but laying down in a cell bed at night and wondering if his 300lb cell-mate is going to get romantic.....

Happy Trails!

Erick

Re:I did the math

[NanoGator]

"2K is barely usable and XP is a joke (IMHO :)"

Those of us that use XP and 2k would not agree with you. They are both a hell of a lot more stable than Win95/98/SE/ME. 2K in particular is very popular with 3D artists who couldn't bear to lose a render to a crash.

Fight Club?

[Aardpig]

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.

Summary

[DarkHelmet]

No need to read the article. Here is what it says in short.

• Microsoft is too big to care about any small-time financial punishment that a government deals out to them, since they still profit heavily in the end.
• Any ruling the DOJ gives Microsoft doesn't mean that Microsoft has to comply to it. This is much like giving somebody who steals 1,000,000 dollars a 1,000 fine, but not force them to give the money back.
• That Cringely guy really likes geometry.

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.

Re:Total BS

[Maestro4k]

• 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.

Doing the math in the Linux cases: Linux cant win

[stratjakt]

0$ profit
-$699 liscencing fee
= -$699 net profit

Re:Well, Duh!

[tsg]

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.