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Microsoft Fails to Comply With EU Requirements
sebFlyte writes "ZDNet is reporting the news that the EU has rejected Microsoft's attempt to wriggle out of it's legal obligation to open up Windows protocols. Microsoft was attempting to bypass the regulation by offering a license totally incompatible with the GPL and which has an absurdly high fee attached. If Microsoft don't come up with a solution that the EU finds acceptable, then they can be fined $5m a day. They've also got some commentary on why Microsoft's behaviour cannot be allowed to stand." The BBC has commentary as well.
$5 million a day? Big deal. Remember in the People vs Larry Flynt how the court fined him $10,000 a day until he complied with their request. $5 million a day is something like 1.8 billion a year. Somehow I think Microsoft would pay that just so that they can remain in control. From their point of view, the value of keeping their protocols closed is worth more than $1.8 billion a year. After all, they have enough cash in the bank to pay that fine for the next
15 years.
The EU would have to charge them $50 million a day before they'd really
care.
Microsoft seems to be pretending that they are dealing with a customer, not a goverment. This kind of tactic will shoot them in the foot because they are ignoring the sovereignty of the EU. The EU won't put up with it since it will dilute their power.
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If Microsoft don't come up with a solution that the EU finds acceptable, then they can be fined $5m a day.
I have no illusions that Microsoft would actually pay that - it's an exorbitant amount.
The worst punishment the EU can mete out is to bar Microsoft from doing business in participating countries.
If/when that happens, what will European Average Joe consumer reaction be?
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As a reminder, Microsoft makes up to $ 1 billion of profit per month according to Cringely.
$ 5m per day is something like $ 1.8 billion dollars per year. So, it hurts bad, but it's still something Microsoft can afford.
This being said, the EU could also decide to slowly raise the fines over time. That would probably make Microsoft move. I just hope they are not going to introduce Windows XP Starter Edition in Europe... Scratch that, I hope MS is going to do just that, since that would make many europeans switch to Linux.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Because it's been solidly demonstrated that if you don't do something very large to dissuade Microsoft, they will ignore you.
In this case they were told they needed to open up their protocols and stop being anti-competitive, or they'd face something like this.
In their usual way, they've decided that charging you large amounts of money to have access to those protocols, as well as preventing everyone in the open source arena from actually using this stuff was what was called for. Basically this violates the letter and spirit of the ruling against Microsoft.
The US DoJ basically stopped pursuing this when Bush got into office. At least the EU actually has the smarts to actually enforce their rulings.
It is entirely against the long-term interests of the entire industry for Microsoft to say 'you can't write software that talks to our software'. All Your Base is not acceptable in this case.
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These fines are being levied by the same EU Commission that is forcing through changes in EU patent law designed to allow companies like Microsoft to profit handsomely? Which EU commission shows all signs of being... how can I put this politely... bribed by Microsoft?
Why do I feel we are watching a made-for-public-viewing spectacle that will ultimately result in a trivial fine being paid and the continuation of business as usual?
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Normally you would be right, that MS should not be forced to give up trade secrets or patents, etc., but if you look at the facts of the case, it is not what it appears.
See, it works like this, MS is a vertical monopoly, and therefore they also develop software for their OS. If they use their superior position in the OS arena to help build their own applications, they are abusing their monopoly vertically.
That means, that if they use hidden or secret procedure calls, etc. to give their software an advantage, they are abusing their monopoly and therefore should be punished for it.
Remember, its not illegal to have a monopoly, but it is illegal to abuse that position.
You're making it sound as it the EU arbitrarily decided to start fining MS. There are laws that have been passed through democratic process. MS was tried in a court of law and found guilty of violating those laws. Now they're guilty of failing to abide by the court's ruling. If they want to do business in the EU they need to comply with the law, or they can stop doing business there.
Tyrannical? I'm sorry but the Law is the Law, and Microsoft have broke it in a place where they wish to do business. They have the option to obey the law and do business or not do business at all.
The fine is becasue they are not obeying the law still. So how is this abusing Microsoft? They're making a big deal about legality of software and media and patents etc.. They can't want the law in one case and not in the other.
You see nothing wrong with using the tyrannical force of the state to take money from one party to give to another?
I'll remember that argumenet the next time I have a speeding ticket.
The local government uses its tyrannical power to fine me and then give that money to the local school system or some other party.
Microsoft has defied a court order here. They should be fined. Or maybe you believe that all global megacorps or indeed anyone should be able to defy court orders with impunity?
The price of freedom is eternal litigation.
All this arguing about $5 million per day and why should MS care what the EU thinks is completely missing the point. Mega multi-nationals like MS are the servants of capital markets. 95% of the time, the markets don't give a shit what kind of trouble a company has if the profits are rolling in as expected. But, trouble like getting shut out of a market the size of the EU would be disaster. The markets would punish MS severely.
A company that can't do business in the EU is not a global company, and their growth prospects would be drastically reduced. Remember that there's nothing personal here. The stock is worth the market's estimation of all future profits discounted for inflation, capital cost, risk, etc. $5 million a day in fines would have a much lower impact on MS' stock price. That's because the fine is quantified, predictible and likely short-term. But to be shut out of a market the size of the EU is unprecidented in modern corporate history. No corporate leader could possibly risk such an event. Imagine the shareholder lawsuits if MS stock price fell because they refused to comply with a the law in a juristiction the size of the EU. MS would knuckle under far before such a thing could happen.