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Microsoft Blames Anti-trust Legal Fees for Price Increases
jm.one writes "BBC news has an article about the Californian anti-trust case and points out that Microsoft tells users would suffer from this: 'Somebody ends up paying for this,' said Microsoft attorney Robert Rosenfeld. 'These large fee awards get passed on to consumers.'
Do they really understand why there are laws?"
I remember when MS got slapped with that fine. People said, "Eh.. it's no big deal to them to begin with, but with what they lost, they'll gain back with a simple price adjustment."
So basically they still haven't learned their lesson. Cost of doing business.
We have secretly replaced these Slashdot mods' sense of humor with a rusty nail. Let's see if they notice!!
With a bit of luck, this will come back to bite them in the gonads.
price increases steadily, security holes found repeatedly, consumer's irritation growing until they say "Well you know what Billy boy, up yours, we're switching to linux (or OS X)"
I just hope there's a viable simple alternative by then to which the customers can switch.
This is the sig that says NI (again)
This is a good thing.
-WolfWithoutAClause
"Gravity is only a theory, not a fact!"I gotta buy some of their stock one of these days... it's not that I believe in the concept or think it's right... it's just working for them so well!
Agile Artisans
Nice to let your customers bleed for your criminal conduct... More reason to leave them and use a real OS.
Im getting SO tired of us paying for their mistakes? There outta be a law to prevent companies making people pay for them getting pasted with fines due to their own law breaking policies ...
hey mr. policeman.. you better not give me that speeding fine.. or else.. somebodies bank will get robbed.. you know, somebody ends up paying for this.
Only morons moderate based on a sig.
Lord knows they can't afford to take the legal fees out of a measly 500% profit margin or the big stockpile of cash they are sitting on.
These large fee awards get passed on to consumers.
Like MS couldn't settle for something a little more reasonable than their 80%+ profit margins on Windows and Office. This is such bull. It's designed to get the government and public to be more accepting of their outrageous pricing.
It may sound "unfair," that Microsoft is somehow getting out of paying for its actions, but all expenses paid by all businesses for all reasons are always passed on to customers.
"Mr Crew has billed Microsoft just over $3,000 an hour for his own work, as well as more than $2,000 an hour for other lawyers on his team. " What lawyer is worth even $200/hr (more on par on normal) much less several thousand dollars per hour. Cause I'm sure no one else could have done Mr. Crew's job just as well for less. definately something wrong if that was approved for lawyer fees after Microsoft lost. (but hey who didn't know that there was something wrong with the legal system in the States)
the company should pay the price of the fines, it should not be turned back to the customers. maybe a price increase is just what's needed to get those thinking about other options to just go out and implement them sooner. sounds like a pretty pathetic plan to me.
this is just the cost of doing questionable business, and it's not like they can even begin to say 'we didn't know we couldn't do that'. it's just fucking rediculous what these asshats are trying to get away with.
Creationists are a lot like zombies. Slow, but powerful and numerous. And they all want to eat our brains.
Happy Trails!
Erick
http://www.busyweather.com/
$3k/hr sounds stiff. But what did he actually provide?
Would a less expensive lawyer been as successfull?
I think certain cases can demonstrate what a difference between a good, great and the best lawyers can have.
Maybe if we had a bit better performance the DMCA wouldn't exist. Maybe OJ would be in jail, who knows.
But when it is my ass or $$ on the line, I'd want the best, and the citizens of California deserve it too.
Allright, now I realize you all like to bash MS as much as possible, but from the article: Mr Crew has billed Microsoft just over $3,000 an hour for his own work, as well as more than $2,000 an hour for other lawyers on his team.
Jesus! I'd object to having to pay that as well.
Wouldn't it be nice if all that money went towards, you know, the users that were "harmed" instead of to the lawyers?
RTFA people. Microsoft isn't complaining about the fines (or settlements) here. They're complaining about the plaintiff's legal fees (which they're being required to pay).
And, quite frankly, I think they have a point. The lawyer who lead the class action lawsuit may be a really good lawyer, but I don't think his time is worth over $3000 per hour.
Tarsnap: Online backups for the truly paranoid
Users get $10 coupon on newest version of windows.
Newest version of windows price increases due to litigation by $40.
Two years later, court says "no no no", consumrs get $15 coupon towards new windows.
They don't get it. The fine is because they over charged people.. They're not allowed to "make it up". They are supposed to distribute that 50bln their hoarding back to the people the stole it from.
Open Source Java DAO Generator
If you are angry, then this is why you should be uing Linux.
If you are increasingly interested in Linux, but do not know where to start, grab knoppix.
Download here.
No installation required, try it from the CD and if you decide you want to make the jump to the penguin world,. just run the install to disk program. Best of all, it is free. If you don't have the bandwidth, ask a freind, I have given out over 20 knoppix disks to my freinds, and 15 of them have converted to Linux 100%. Don't forget to checkout Wine and Crossover office, It will help your transition!
OK, Microsoft says its legal bill is too high, so it has to overcharge its customers. But why did it get that legal bill in the first place? From the article:
"The legal costs are part of Microsoft's settlement for over-charging consumers buying its software in California."
Sigh...
"Backups are for wimps. Real men upload their data to an FTP site and have everyone else mirror it." -- Linus Torvalds
One of the unique aspects of a monopoly is the inelasticity of demand on the price of their products. In other words, MS can change the price of their products and, since they have a monopoly, roughly the same quantity of their products will be consumed. Of course, this is not black and white. They cannot make their products 100 times more and expect the same amount to be consumed (though, I know of some MS shops that would have no choice . . .). However, they can raise their prices much more than probably any other company without having a significant amount of revenue decrease.
This means that additional costs to Windows can pretty much be passed 100% down to the consumer, and the EU's monetary penalty is really just another form of tax on the consumer. Perhaps we could call it an "excise" tax on windows.
No, the real way to punish MS is to break up the monopoly and introduce competition, then charge a monetary penalty that cannot simply be passed on to the consumer, because if the new MS enitity/entities were to raise their price so many people would buy the competitions' products that MS would actually experience a decrease in revenue.
Sdelat' Ameriku velikoy Snova!
Do they really understand why there are laws?
No. Plus they have a cash reservers that can last them 5 years of $0 in sales. they can easily eat it up. It is more of a scare tactic to prevent the states from doing it again. In fear if they do it again then then they will need to rase prices again. This does really hurt consumers in many levels including people who wish to purchase commercial distributions or linux, What business like to do is keep their prices no more then half of their competiors prices, so when Microsoft sells XP for $250 its competiors like Apple and the Linuxs will sell it for $125. If Microsoft sells it OS (like back in the good old days) for $80 Apple and the Linux's would sell for $40. The problem is that there are to many Supid consumers out there combined with their fear of computers. Makes this worse. People see something expensive they think "gee it must be good" and then they see how many people are using the product then they go "Well if everyone else is using is then it must be good" While the minority who actually knows economics and goes well I see that everyone is using it so demand is up so the price will rise, no mater what the quality is. So I will look for a product that is just as good but is not much in demand then buy that because it will be cheaper. Popularity and Price have nothing do with the quality of the products. If everyone went to Microsoft your prices are to high we will switch to an other os unless you lower your cost. Then Microsoft will lower its cost no mater how many states are suing them. Microsoft is working with a 20's mob mentality, with out perhaps the drugs and murdering.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Darwin said it best. Microsoft has to compete or they're dead in the water. They can't compete if they jack up their prices. The MS mentality is to offset court expenses with product prices, but that road is mined heavily. They should know better than this, really. Oh wait... nevermind.
The dangers of knowledge trigger emotional distress in human beings.
This is nolonger the 1990's, Linux is easy to use now.
Yes, modern linux distributions such as Fedora, Mandrake, SuSE and even Debian put a browser ICON right in front of your face! There is a lot of work to get winmodems working, espceilly in the pay for distros.
Why do people keep spreading fud about Linux being hard to use? I think everyone who claims that should try KDE 3.2 or GNOME 2.6.
for time wasted for reboots ?
I hope soon consumers realise that MS is gouging them so much that they should give them the finger. It's just goddamn stupid, that's what it is, and the price increases are nothing to do with "antitrust action". Even if they were being sued for antitrust all the time, they'd still make sufficient profit from their (IMHO insanely inflated) current prices.
It's to do with them realising that consumers think that higher value == higher price and vice versa, and so they can get as much as they want out of them for Longhorn etc.
At this rate, the OS will be more expensive than the PC it runs on. Oh wait, it is!
I'm amazing. You aren't. SUCK IT
..should be able to see through that argument. They took monopoly profits before, they take monopoly profits now. Sunk costs like legal bills have absolutely no effect on the optimal price/quantity point. It only comes into play if there's competition.
This is simply trying to shift the blame of why they're extracting monopoly profits: "Damn M$, stop bleeding us dry" to "Damn justice department, stop suing them so we don't pay the bill". When in reality, they would have taken that money anyway, because they can.
Kjella
Live today, because you never know what tomorrow brings
Their objective TCO studies will still show Windows is cheaper than Linux.
Dear Will, the plums were poisoned. -- Cheese Club
I'm amused at the outraged postings of people shocked by the fact that Microsoft passes along settlement costs to the consumer through price increases rather than cutting into their profits. Look, they'll raise their prices first, and if demand drops off or they're afraid that their market share is shrinking, then they may lower their prices again.
Litigation resulting in cash penalities are the easiest for corporations like MS to handle. I believe that state and foreign governments sue not for whats "right" or "fair" but because its a backdoor method of taxing the public.
IMHO, the best solution to deal with MS was the original penalty of splitting the OS and Apps segments of MS into two separate entities. You can't pass that along to consumers. No wonder MS fought so hard to get that reversed.
BTW - Here's another little fact. Corporations don't pay taxes (technically) either. So before getting all huffy that MS is getting away with it again, take a good hard look at the runaway litigation in the world and ask yourself where all of the money is going!
They have every right to adjust their prices to reflect these additional costs.
Actually, no, they do not. This is yet another example of them abusing their monopoly position within the marketplace. That's what all of the legal action has been about.
The fact that Microsoft can nonchalantly pass on these costs to the consumer with litte concern for its loss of market share shows how much of a monopoly they truly are, and how much they know it to be so. When an pattern of existence dominates an environment so completely, "evolution" ceases to be an issue - short of cataclysmic or revolutionary change.
Galmarley - Free research on economic hi
This whole idea reminds me of something I see all of the time -- people supporting a government program, but not realzing that someone has to pay for it. For example, here in Florida, voters a few years ago backed a bullet-train overwhelmingly, not realizing that the money for such a train had to come from somewhere. We enjoy no income tax here, so it comes in the form of higher sales or property taxes, which affect us all.
On the same vain, everyone cheers when Microsoft gets whacked with a big judgement or settlement. But, the money has to come from somewhere -- and it will likely come in the form of higher prices. And since 90% of desktops run Windows, it will likely affect you in some manner down the road.
With that said, the attorney's fees in this case (and many others) are outrageous. The judge for set them more modestly.
Jason
...make them cease to exist and no longer legally able to operate within this country.
Technology has been hindered because of Microsoft. Reports have shown that innovation and advancment in technology has been deeply stifled by at least 10 years because of the monopolistic influence that Microsoft imposes on others. Microsoft has (on many occasions) paid other companies (Intel) to NOT release a certain product for fear that it would, in some manner, hurt profitability of Microsoft.
Their Blatant disregard for law is disgusting. Law doesn't affect them. They simply have way too much money. Instead of fining them $600 million, fine them 75% of their assets. Since this won't happen, they will continue to trample all over the law and simply shrug it off with a, "OOhh teehee, I'll just throw cash at it till it disappears.." They are no different than your street thug going back to jail for repeat offenses. Eventually the thug will get life in jail, but what will MS get? Nothing.
They do nothing positive except generate enough revenue that makes the govt grin in the amount of taxes they pull in. Fucking get rid of them. Make a law specifically for Microsoft that prohibits them from further operation.
This NEEDS to happen.
This is an example of how fucked up our laws are requarding businesses. This isn't a Microsoft is evil example this is a basic corporate fact and is an example why corporations exist. Corporations are by design intended to protect individuals(the owners ) because the only thing you can do to a corporation is take it's money and as it job is to make money it will simply treat such an event as a loss of profit and it will react as such. If other operating costs go up then that would effect the price too. The only way you are going to change corporate behavior is by holding those in charge responsible for it's acts not the corporation. Except for a corporate charter many actions could be tried under conspiracy or even racketeering laws but that corporate charter insulates the owners from that. Change incorporation laws and this would stop.
Slashdot, home of supporters of free software, free music, and free speech.Except for Moderators that disagree with you.
Bloody hell, I am going to a law school. $3000/hour is crazy and sounds great. I do not understand why MS is bitching about the fees; it is still pocket change for them. Why should the consumers have to pay for their criminal conduct? They can't be so greedy that they will pass the bill to the consumers. They do have $50 billion in the bank. A few news stories on this, a few ugly bugs (security issues), and they'll lose many customers. The potential loss is bigger than the gain if they pass the bill to the consumers. Remember, this was the lawyer talking, not someone who makes the decisions at Microsoft.
Consumers to the burden of proof, added their personal information to the cost of using MSFT's software, and software prices went down across the board, right? Quite the contrary, you now get the burden of proof, a hoop you have to jump through every time you change hardware, AND higher prices.
Hey, as long as the MSFT sheeple keep taking it up the pooper you can't get mad because Redmond takes advantage of the situation.
Just got done isolating the last Windows machine on my network so it can't access the Internet. That's a Win2K box. The last piece of MS crapware I purchased at home since...2001. Wow, time flies when you're having fun instead of spending all you time patching Windows.
And I have to say it feels good when stories like this and the virus of the day come by. Not that I'd ever taunt the sheep by saying something like NEENER, NEENER, NEENER. And though I might be tempted to think they're technology LOOOOOOSSSEERRRS, manners would prevent me from saying so out loud. Instead I'd pretend to be sympathetic and understanding and wait until their back is turned and they're a polite distance out of earshot to start laughing.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
I would consider this to be "abusing their monopoly power." Shouldn't the law consider it the same, thus allowing the DoJ to bring another anti-trust suit?
Oh wait... Bush would just quash this one like he did the last.
In a sense this is still good because it contributes to the erosion of their customer base.
So, this guy just "wins" a case against someone for price gouging... then turns around and price gouges, but that's ok, becuse it's MS he's doing it to... Toss this one in the blindly biased bucket.
... they would push to make sure the majority of the "benefit" would go back to end users. But that wouldn't serve their purpose. After reading the article and a million different posts... they're just angry about having to pay their opponents' lawyer's fees. Hey, I would be too.
Not that I care for MS or their tactics, but isn't it a bit sad? If there are 13 million Californians who are going to recieve the benefit, a $10 coupon would not cut it. That gives you $130 million to the end users and $260 to the prosecuting lawyers. Looks like they'd have to double it... the saddest thing is that the big winners in all this are the lawyers and not the people.
FLR
I blame Microsoft on Microsoft price increases.
It seems like a lot of people here think that passing along the expense to the user is unfair. These are the same people that are proponents of Linux. Do the math ... Windows costing more means that there will likely be fewer users of Windows because they can't afford it in their or their company's budget. Anyone that pushes Linux over Windows should be HAPPY that the cost is being passed onto the users.
1: Run other companies out of business and become a monopoly .
2: Profit
3: Get sued for Anit-trust violations
4: Pass legal fees and damages on to the customer
5: Profit
6: Have customers sign up for free software upgrade license agreement for large $SUM
7: Release new software AFTER said agreement expires
8: Profit
9: Extend, Embrace, . .
How do I get in on this?
Go not unto/. for advice, for you will be told both yea and nay (but have nothing to do with the question)
Add to that the average pro sports career is just a couple of years - don't blame them for making hay while the grass is green.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
I'm surprised that no one figured this out before...all companies do this (pass costs on to their customers).. It's just like these people who constantly want Corporations to "pay more taxes"......Companies DO NOT PAY TAXES !!! They only collect the taxes from YOU (the consumer ) and then pay Uncle Sugar to re-distribute as the Politicians see fit. Great system, isn't it. Time to go to the Flat Tax System (as the RUSSIANS have !!) -no income tax, only consumables are taxed - everyone pays the same flat rate. I doubt it's possible in the US though... the IRS and Tax Attorneys are too powerful...it would put them out of business.
Linux has made great strides in usability...but its got a way to go. Why did I just need to recompile my madwifi drivers with my kernel update? Why does Fedora's kudzu insist all ethernet interfaces start with "eth" (madwifi uses "ath")?
*I* know the "whys" for all this because I've been using Linux for years...trying to explain this process to someone less familiar, and they'll think I'm nuts for going through this process when my Windows XP setup "just works".
if any law infractions revolved around named human beings, and not this non person person they call a corporation. If we re adjusted the laws back to named humans are responsible for their actions, and if the fines came out of personal bank accounts of whomever issued the orders that resulted in the crimes committed, you'd see a lot more honesty with companies. And the government could mandate a price freeze as well on their products to go in conjunction with any fines, or they could actually institute a "three strikes and you are out" provision like they have with human beings, and in the case of corporations, just completely revoke their charters after a third conviction. But they don't do that too often, companies are allowed crime after crime after crime after crime, yet they still stay "in business".
You make Bill Gates pay a big chunk out of his pocket, then make him do 500 hours community service picking up trash next to the road,after a few months in lockup, like any regular guy would get for stealing those sorts of sums, you'd see changes in his company's predatory practices, and pronto. You give him a perpetual get out of jail free card, he'll keep using it. It's that simple.
There's a variety of techniques that could be used to make corporations more honest, but bottom line is, nearly all the legislators, judges, and people in the executive branch make the bulk of their money from being stock holders and/or being in ownership or management positions in corporations, they profit handsomely from this corporate insulation, so they will NOT write, vote for, or sign into law anything that could hurt them personally. They keep up the laws that benefit corporations, and they keep up that level of legal armor and shielding that corporations have, that private individuals don't have.
If YOU defraud someone, it comes out of your pocket and you can't "pass it on" as a cost of doing business. If you do it a few times, you will personally go to jail, some times even one time depending on the crime. Pass a bae check over 100$, it's a felony, you could serve time. a corporation defrauds thousands of people out of billions, or puts a competitor out of business using questionalb tacts, those corporate officers hardly ever see any jail time. It happens, but it's extremely rare. Corporations can just keep getting away with it, time after time, and when they are so huge as to be dominant market players, it never results in any significant changes to the corporation, other than they learn to obfuscate the bookeeping better, and THEN they figure out what new laws that would benefit them better, that might keep them from getting caught, etc, that need to be passed, and then they go to work on that with campaign contributions and lobbying, using money they half stole in the first place. It's a corrupt vicious cycle, organized gang activity basically, and gates and company are just one example of many.
The system is so broken and so corrupt there is little hope that it will get fixed any time soon. I doubt it will frankly. And there is so little difference between "government" and really really large international corporations that we should probably just end the illusion that there is.
That out of all of Microsoft's business costs, the only ones "somebody has to pay for" are the legal costs with the government.
For example, wouldn't it make more sense to point at the approximately three hundred million dollars per quarter that Microsoft has been pissing away on the XBox venture since it began with no apparent plan to move to profitability in sight, and say that perhaps that is the cause of the cost increases? Or what about the MSN division, which last I checked has run very slightly profitable for only one quarter (sometime last year) once with only losses for the entire rest of its entire history? Or-- say-- Windows Media Player? Microsoft's giving it away but there's clearly development costs. Doesn't someone have to pay for that?
It seems absolutely bizarre that Microsoft seems to be trying to make the implication that ventures such as the original IE, or Windows Media Player, really are "free", and just attempts to "stay competitive", and the fact they have all this money from their OS and Office divisions doesn't give them any unfair advantage. Yet then once it becomes advantageous from a PR perspective to do so, they begin trumpeting about how all their costs get passed on to consumers. Well, gee! If the costs of doing business are getting passed on to consumers, then aren't the development costs for IE and WMP being passed on to consumers as well? And if IE and WMP are being paid for via costs passed on to the people who buy Windows, then why does Microsoft claim that these are anything other than forced bundling? Why the "it's free" charade that seems to be the basis of their claim that IE and WMP aren't illegally anticompetitive actions?
I'd say the costs passed on to consumers from Microsoft paying slap-on-the-wrist fees for monopolistic practices are dwarfed by the costs passed on to consumers from Microsoft actually engaging in monopolistic practices in the first place.
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
It's a common misunderstanding that costs are always passed on to consumers. Most companies actually sell at whatever price they can get (the price that the market can bear). They then make a profit by having costs that are lower than that, the lower the costs the better the profit. In a competitive market, there is normally a fairly clear price which things can be sold at set by the price the competition is charging.
Where does money for this come from? Simply, existing shareholders in a company which is making less profit get less money.
If a company is a monopoly with a captive market, the calculation is completely different. The question is "what price can we get away with charging without someone stopping us". The idea, in this case, is to try to increase the "percieved value" of the product (so people are willing to pay the price) and to increase the "percieved cost" of the product so that people feel that the cost is justified.
All of this is the reason why the statement from Microsoft is tantamount to and admission of being a monopoly, and further, given that this is a discussion about illegal overcharging, it seems like a clear admission that Microsoft intends to break the law again.
The fact is the MS is in a position that most other corporations would love to be in - not simply just being a monopoly but actually dictating to it's customers whatever it likes, rather than in most other industries when the customer has the power of choice and some influence over product pricing.
Whether this is good for Linux or not is irrelevant - the fact is that the user base MS has is no longer a customer but a dependant in the same way a drug addict needs a dealer - in other words, customers taking some control and forcing MS's hand.
What this needs is a few big MS customers to simply refuse to pay those license fees and to stop upgrades (and no, I'm not talking about just moving to Linux) - then there is some likelihood of vesting power back into the customers' hands such that MS products are bought based on their quality and pricing, rather than just because they are depended on.
It is very dangerous to allow a corporation to have this much influence & power over its customers - if the customers just "lay down and die" now, then this kind of event will happen more frequently as MS gets more confident in its bullying tactics. This will get *much* worse unless people start acting now.
Incidentally, before anyone accuses me of Linux zealotism, my attitude always has been that Linux's continued success should be based on the postivie aspects of delivering what people want rather than MS negativity forcing people to migrate to it.
In this case, migration to Linux is an option but hitting MS in its corporate wallet is what is needed to counter this action - users should just continue using the MS software they have and not upgrade. Corporate users should look at the licenses they have a maybe start cutting back on Office licenses, possibly handing out Open Office to users who don't need the full capabilities of MS Office.
These are actions that can be taken that will not necessarily affect the user environment greatly but that will send a message to MS that the bullying must now stop.
Gentoo Linux - another day, another USE flag.
If someone persistently breaks traffic laws, they lose their priveledge to pilot an automobile. If you break anti-competitive laws, you get barred from that marketplace.
It has been said that it's hitting people in the wallet that really hurts. I don't think so. Hitting them in their ability to fatten their wallets is what truly hurts, and hurts in a way feared in advance and not easily forgotten. Stop Microsoft from developing or releasing anything related to IE or Windows or Office products for two years. Now that would get their attention and cause them to pause before acting with reckless abandon and total disregard for the law.
Those who think that 'what is good for Microsoft is good for America' say that because they fear that hurting Microsoft hurts themselves. But that is simply not true. Sure, there are a lot of jobs at Microsoft, but those jobs exist to answer market demand for the products offered. Bridling a ferocious company like Microsoft does not in any way destroy market demand. In fact the innovation permitted by the destruction of such a dictatorial central planning authority is often the best thing that can happen to an ecosystem. Especially when you consider that Microsoft does not innovate in markets, they distort.
Think of it this way. If you suffered from blindness and could be cured, would you worry about your cure putting your overcharging Braille publisher out of business?
What if you were running a small business, and for some reason, got hit with big fees of some kind?
...
If I were runing a small business and got hit with fines for violating the laws that regulated my business, say I was a hotel chain that got hit with a fine by the health department, and I raised my rates and put a sign in the lobby saying "we apologise for the rate increases, but the health department forced us to raise rates", and didn't actually do anything about what I was doing... how long would I be in business?
The only small business I can think of that can get away with saying "the government's really cracking down so we have to raise prices" are criminal enterprises: drug dealers, illegal gambling joints, loan sharks,
Is that the analogy you REALLY want to use for Microsoft?
Doesn't matter if its Microsoft or any other corporation, the costs of punishment ALLWAYS end up in the lap of said companys customers one way or another.
The only thing that's effective is either fine (or jail if appropriate) the owners of the company or force a liquidation, anything else is just a strike in the air.
/greger
Regardless, YOU DO NOT HAVE TO RUN THEIR PRODUCTS ON YOUR PC. No one does.
Walk into any computer store and try to buy a non-Windows PC. I've tried it at MicroCenter, CompUSA, and Fry's. Fry's offered a Yellow Dog distro system that was a Celeron 1.2ghz system. That was it. Granted they have an alternative, not only is it using older technology, but it's using a Chinese Distro with it's default language of Simplistic Chinese selected. MicroCenter's Sales Associates told me the reason they don't offer Linux is "Everyone wants Windows, and Windows is the best." -- I asked them to tell me why it's the best "Because it is more stable, it can run for over a week." I laughed at them for that. CompUSA refused to answer, they just tried to influence me into a Windows box... I told them I know enough about computers to not run a Windows infested machine that the minute I hook it to the net I'll have viruses, worms, and trojans.. before I have the chance to update.
Public. Linux + StarOffice - Get real. The configuration woes of setting up Linux are what us geeks when through in our DOS and Win3x days. Do you think anyone wants to do that now? Run Mandrake, or Fedora. It'll install everything clean and simple. Although the higher end Linux users detest running those simplistic distros once you get the feel of the Operator system, they are great. Hell if you want really easy to use, use Lindo--Linspire.. (*ducks from flying fists*).
The fact is, Microsoft is passing the fines to us because they have a monopoly. You said it yourself. With only having Windows boxes in computer stores, there is no alternative. I've been asked if I run Windows at home by a few general computer users, I said no, they asked if I had a mac, I said no... they asked what I run. I told them Debian Linux... they asked what Linux was. That's the problem. Microsoft is hiding it's competition (which can be good or bad depending on your view).
Why does this remind me of a sweatshop mentality?
"Anyone who reports of abuses in this shop will be beaten severely!"
"No problem. I have the capacity to do infinite work so long as you don't mind that my quality approaches zero."-Dilbert
Laws are for controlling the common folk.
I'm not sure exactly who the "they" is in your question, but this default case covers most situations:
In this supposedly enlightened age, as the roots of globalization branch, grow and strengthen and nations install governments that are little more than paid operatives of corporations, said corporations develop a sense of omnipotence and the companion view that laws that do not work in their favor are mere repairable obstacles on the road to greater corporate wealth; an artifact of a less enlightened time that can be removed with the judicious application of money and, until they are removed, the penalties for the violation of which are entered into ledgers as just another "cost of doing business" that will ultimately passed on to the consumer. The sad, albeit anthropological, fact is that since greed and vanity are key characteristics of most politicians, many politicians are happy to accept deferred positions on that road repair crew in exchange for assistance in their appointment. They may end up repairing the road to hell, but that is irrelevant to them since they probably won't be around to see it completed and would likely never be held accountable for the impact of their work, since they tend to control the formation of laws that would hold them accountable.
So, to answer you question: to many corporations, understanding why there are laws is moot. They understands very effective means to deal with them. Among the those means:
1) Affix a surcharge to the cost of all goods
2) Return a small portion of that surcharge to people in positions to influence laws and treaties to the corporations' benefit
3) Profit. ;-)
Sigs are bad for your health.
How about a rate of over 791 MILLION DOLLARS PER HOUR?
Mike Tyson made $20 million dollars for 91 seconds work in the boxing ring. $220,000 dollars per second.
For that sort of money *I'd* step into a ring with Tyson. If I ran real fast I'd probably make enough to cover the hospital bills.
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- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
The lesson, if you're not blinded to it, is that you don't need 100% control of something to be an effective monopoly.
Microsoft controlled the OS. If they didn't like you your application would accidently break every time they upgraded the OS. If they decided to compete with you, same thing.
It's like buying every bridge in town (matters more in some towns than others) and claiming that you don't represent a monopoly because you've only got 1/7000th of the road surface in town. Bridges are a bottleneck of driving. Like an OS. Nobody buys a computer for the OS, they buy it to do things, the OS is just like the mechanics of the car - something that makes the car do what you bought it to do.
With Microsoft's control over a large segment of the industry (90%?) they could bully other companies into not writing software for other OSes, or selling computers with other OSes.
In other words, they started to be able to extert non-market pressures. An ideal market has perfect knowledge and perfect availability. Microsoft is trying to remove these as much as possible. They don't want people to know about alternatives, nor be able to use them if they hear about them. If you do buy a competing office suite, which you can't get pre-installed, it'll break when MS "upgrades" something.
A capitalist would embrace the market. They would strive to offer a better service, or a better price, and draw customers voluntarily. Microsoft instead is paying people to mislead you and restrict your choice of competitors. Like bribing the city to rezone your property, or accidently shutting off your electricity, if you dare to compete with them. Or sabotaging their own product (car for instance) when you install a third-party product (stereo) in order to scare everyone away from non-Microsoft add-ons.
Actually, complete and utter irony would include an excise tax on all MS products to cover government legal fees, enforcement, etc.
Not suing MS because they will raise prices is akin to paying the mob shakedown money to be left alone.
What will happen when they start being sued for product defects?
'These large fee awards get passed on to consumers.'
I've heard this one before, and it makes me (as an armchair economist) absolutely livid. There is absolutely no correlation between Microsoft's cost of production and their market price. The idea that legal fees and fines or taxes get passed on to consumers is only true in competitive markets with a limited supply of the goods in question. Microsoft is selling a product with zero marginal cost (after producing the first copy of a new version of windows, each additional copy has effectively zero cost) in an extremely non-competitive market. Cost of production has absolutely nothing to do with their market price - it is determined entirely by the demand side.
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If you study the economics of monopoly behaviour, then you know that firms set prices and output based on the demand for their product and the marginal cost of producing that product in order to maximise profits. Since I doubt the marginal cost of printing a CD, a box, and a manual has changed, then the price hike can only be attributed to a change in the demand of microsoft's products. Fixed costs such as lawsuit payoffs do not enter the pricing formula unless they raise the expected future cost of lawsuits as an increasing function of units sold. That could be, but I doubt it. For sure, Microsoft has always been maximising its profits and continues to do so. The price hike is completely unrelated therefore to paying for the fixed cost of the lawsuit.
That's how business works, folks. It's just like conservation of matter, energy and momentum. When costs go up, the money to pay for them has to come from somewhere, and a corporation's money ALL comes from its customers. It doesn't matter if the reason is material costs, rents, interest rates, criminal fines, whatever.
Look what happened after the great, historic, multi-billion dollar tobacco industry settlement. The price of cigs went up, that's all. After politicians stopped blowing their trumpets of victory, everything was the same except the government was making more money from smokers.
In principle a company loses market when it has to raise prices, but for Microsoft this probably isn't the case any more than it was for Phillip Morris. Millions of people already buy software from Microsoft, even though the equivalent is available for free. Are they going to switch because it gets a little more expensive? Probably not.
This is a good argument for penalizing corporate executives personally for their business decisions instead of letting them hide behind the corporate shield. Think about this when politicians talk about taking the tax burden off the individual and putting it on wealthy corporations. It's a smoke screen. They all get their money from the same place: you.
This swindle shows the central problem with M$ monopoly crime: corporate liability protection. Properly administered, monopoly crimes would be remedied and punished at the corporate level, directors and owners, as their decisions (active and passive) caused the damage (and continue to do so). But the corporation construct protects them. So they pass the costs along to their customers. As a monopoly, their customers can't just switch to the competition.
.NET vs. VisualStudio, Office vs. Works, Consulting 1, 2, 3. Decimating the company would have unleashed value for everyone, including ginormous shareholders like Gates and Ballmer, who would see the combined value of their parts grow more quickly than the monolithic entity. But their personal power, which chokes the industry and its dependent markets, would be diminished. And a model would be installed for killing these giant krakens before they strangle us with their endless tentacles. Instead, we are dragged to the maelstrom.
Even though Ashcroft's Justice Department and Bush's FTC have obviously given a pass to M$, exactly their kind of corporation, they're just the sizzle on the rotten steak of the original penalty judgement. The only remedy to a monopoly corporation is to destroy the monopoly. M$ should have been split into its vertical components: OS, development tools, applications, media, and consulting. Probably some of those components should have been split into directly competing companies:
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make install -not war
IANAEconomist, but all of the folks saying, "It's econ 101! In competitive industries, companies can't change prices, MS is warning that they're going to change prices, ergo they're a monopoly!" should be aware that economics has retreated from this simple "price setting" == "monopoly" claim since the 1930's. Now, it so happens that microsoft really is a monopoly. However, the fact that there is some elasticity in their pricing doesn't prove it.
By the "economics 101" definition, common sense tells us that very very few modern industries are "competitive," because in almost all real industries, companies have pricing power. E.g., Nike is not a monopoly, but they obviously have a lot of latitude in how they price their shoes.
The classical market model, wherein producers have absolutely no control over the prices of their products, was a great model for the mercantile systems of the 18th and 19th century, when they were developed. If you're a cotton planter, or molasses distributor, or lumber baron, etc. your production accounts for a small enough fraction of available goods that you really can't effect prices at all; you have no choice but to take the going price.
Very few modern industries fit this model, in part because not many modern industries involve true commodities; there's always some difference between McDonald's and Burger King that's important enough to some consumers that they'll pay a bit extra for their favorite. But also because most industries have a few behemoth leaders that are responsible for most of the production. But even for chemically identical commodities like steel and salt, companies end up having pricing power because so few companies account for so much of the production. In the US, if C&H stopped selling sugar, there would be a noticeable "sugar crunch"; this effectively gives C&H an ability to price sugar, since consumers can't credibly threaten to just get all their sugar somewhere else.
(Been reading Galbraith on my AM commute lately. Would genuinely appreciate any real econ types smacking me down.)
There is a growing law practice in the US for knocking these fees down. I have been hunting for the article and can't find it. Anyway, in several large recent class action settlements, the class was not satisfied with getting a coupon, while the lawyers walked away with millions. After the case was won, the "class" goes and hires another law firm to attack the initial firm for excessive fees. The fees get significantly reduced. If you find the article, please post it!
Gee, no room in the 80% margin to cover the costs incurred establishing those same margins.
life sucks being them
Basically, Microsoft is so entrenched now that they can dictate terms to governments by threatening economic slowdowns, and hence, poor showings on election day.
Essentially, Microsoft now has enough economic power to also possess de-facto political power.
- undoware.ca
A company that is convicted of being a monopoly can't be sued into behaving. It has to be dismantled. This is a perfect example of why that's the case.
The fines that are awarded, alternatively, could be secured by seizing the companies assets and either placing them in the public domain, where IP is concerned, or auctioning them to pay some recompense to the people hurt by the company. But even so, if you leave the company intact, it will just do the same thing again. I know of no example of any monopolistic company giving up it's bad behavior if it could continue to break the law and still make a profit.
-All that is gold does not glitter - Tolkien
www.ra
Do a google search on Santa Clara County v. Southern Pacific Railroad Company. You'll find references.
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"A company that is convicted of being a monopoly can't be sued into behaving."
I don't disagree with your point, but I do have semantic correction to make: A company cannot be convicted of being a monopoly, as being a monopoly is not an illegal offense. A company can be convicted of abusing the powers that they possess as a monopoly and THAT is what MS got in trouble for.
-=(Lord Crosis)=-Andy Rooney of Borg: "Ya ever wonder WHY resistance is futile?"