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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?"
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)
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.
"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)
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
So basically they still haven't learned their lesson. Cost of doing business.
It is more than just a cost of business. Microsoft is saying that they can shift their cost curve, customers will pay, and there is little repercussion for the company. The only times that a company can get away with this is if it is either a monopoly or sells addictive products. This is why the government can jack up the prices of cigerettes cia taxes. Microsoft is admitting that it is a monopoly cuz I highly doubt that most people just can't get enough of XP.
Wrong! Only a monopoly can pass all costs to the consumers. Anything other than a monopoly can only push up prices so much before sale start to diminish.
By saying this, Microsoft, in effect is admitting to being a monopoly.
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!
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
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.
it would be so much easier if people could be prosecuted for "being a dick".
it could be an on the spot fine of 0.5% of your total value.
an officer could just follow Gates around handing him tickets like toilet paper and saying "stop being a dick Bill... Bill, stop being a dick... you're still a dick Bill..."
Darl McBride? what a dick, every time he opens his mouth shove a ticket in.
those retards who have crap cars but think making them really loud makes them good, "hey, you're car sounds like a dying go-kart you dick!". kaching - more money for schools and hospitals.
Linux is fine to use, until something goes wrong.. wireless is unfortunately a good example of this. I know two people who were trying to install wireless drivers on their laptops. Both drivers needed kernel headers. One required some very strange methods in order to make it work, and I had to MODIFY THE BLOODY SOURCE CODE to get the other to compile. Unfortunately, most end-users do not know, or care about GNU Make and GCC.
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.
if Microsoft wants to raise prices on their products, they have full right to do that.
If they were not a monopoly, that would be true. Market forces would serve to correct their behaviour. But it turns out that certain kinds of software... any software with a complex and closed interface like Windows... is a natural monopoly: you can't buy Joe's OS and expect to run software written for Bill's OS on it, so if the majority of the software is written for Bill's OS that's what you're going to buy.
So they are not sufficiently subject to market forces for your scenario to play out. Thus, they are a natural monopoly and should be regulated on that basis. If they don't want to be regulated, they should modify their software to remove the "applications barrier to entry" that causes the lock-in.
And it's not just cost that's involved here. I want to buy a copy of "minimal Windows" for a server, a copy without Internet Explorer or Outlook Express or Windows Media Player or the Microsoft HTML Control, because these components reduce the security and reliability of the system even if I don't want to use them. If there was an effective market for operating system software, I could buy that and still run Windows server applications on it. As there isn't, not only can't I buy it... I can't create it myself by starting with a full install and stripping components out.
The fact that Microsoft hasn't been forced to either abandon their business model for one that is compatible with competition, or been placed under strong regulation and become effectively a public utility, is just one of many warning signs that should give us all pause.
You didn't understand the parent post; the only "laws" it refers to are those of economics. It made the point that Microsoft can simply pass on these costs only because it is a monopoly. If it were in a truly competitive industry prices would be set by the market, and if they attempted to raise prices unilaterally to cover extraordinary costs (like fines), they would lose business to their competitors.
Imagine two convenience stores across the street from each other. One gets robbed and its owner decides to double all of its prices to recover the loss. Perfectly legal, but it would never happen, would it?
The issue is that if they weren't a monopoly it would be impossible to "pass such costs on to customers". It's basic econimics. Assuming no change in per-unit production costs, there is a single fixed product price that will maximize profits. A company would already be charging that price. Any increase in product price would then result in a decrease in profits.
If that weren't true then the company could have imagined they already had some sort of cost to passed on and charged that higher price in the first place, then simply pocket that imaginary "passed-on cost" as more profits and been making more profits in the first place. QED.
So either (A) he's blowing smoke out his ass with bogus threats of "passing on costs to customers", or (B) he's actually threatening to abuse their monopoly position to extort monopoly rents out of the public.
So either Microsoft was LYING to the court in an effort to dodge court ordered damages, or Microsoft was threatening to abuse their monopoly to extort monopoly rents.
Neither option reflects particularly well on Microsoft. Not that either sort of bad reflection could possibly tarnish their image any further.
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- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
There are no laws saying MS can't jack up their prices, but there are laws saying MS can't be a monopoly.
Um, it's quite the opposite actually. Microsoft is free to be as much of a monopoly as it wants. If its products are that good that everyone wants to use them, hurrah for Microsoft. It becomes against the law when the monopoly uses its position of power to lock-in consumers, lock-out competitors, dump product below cost to destroy competitors, jack up prices to ridiculous levels while no competition is in sight and various other underhanded tactics often used by Microsoft. The Sherman Anti-trust Act is called 'Anti-trust' for a reason. A monopoly has complete control over its market. Rather than simply disallowing this from happening when it might've happened for a good reason (See: Google) instead the public trusts the monopoly to behave responsibly. When that trust is violated, that's when they need to be nailed by the law.
Random and weird software I've written.