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Deadline Looming for Microsoft in Antitrust Case

gaijincory writes "The International Herald Tribune reminds us that the end of the month is Microsoft's deadline to comply with the European Commission's antitrust ruling. The fine for non-compliance? A cool $5 million per day."

32 of 397 comments (clear)

  1. And at that rate... by T(V)oney · · Score: 5, Interesting

    ... they would have a few months to figure out what they wanted to do about it.

    1. Re:And at that rate... by MisterLawyer · · Score: 4, Informative
      Actually, at that rate, Microsoft would still be able to function indefinately. (ceteris paribus, of course)

      Microsoft has an average daily global sales revenue of $100 million. $5 million is about 5% of their global sales. Their profit margins far exceed 5%, therefore they could continue to pay their daily fine to the E.U. and still make a profit every day.

      Also, the E.U. already fined them about $600 million in addition to the prospective daily fine. Thats the same as about four months worth of the daily $5 million fine.

    2. Re:And at that rate... by strider44 · · Score: 5, Insightful

      They are a publicly traded company who's shares haven't gone up anytime recently. I'd give them a couple of weeks paying that sort of fine before they implode under the weight of shareholders.

    3. Re:And at that rate... by flyingsquid · · Score: 4, Funny
      Actually, at that rate, Microsoft would still be able to function indefinately. (ceteris paribus, of course) Microsoft has an average daily global sales revenue of $100 million. $5 million is about 5% of their global sales. Their profit margins far exceed 5%, therefore they could continue to pay their daily fine to the E.U. and still make a profit every day.

      The other thing is they could just say, "Due to unforeseen expenses, Microsoft will be increasing the cost of all products sold in the European Union by 50 cents per day."

      Hell, as long as the courts have labelled you a monopoly, you might as well act like it.

    4. Re:And at that rate... by should_be_linear · · Score: 4, Interesting

      Not really. If regulation bodies in EU recognize that MS is happy with 5M/day, commision will be glad to increase it. Don't forget that majority in EU parliament and commision are leftist parties (socialists, greens). It would be political suicide for them to be fooled by mother of all evil (in their mind): Giant American Corporation.

      --
      839*929
    5. Re:And at that rate... by MoonBuggy · · Score: 4, Interesting

      Ignoring stockholder issues that others have mentioned, here's how the fine breaks down:
      MS reported $2,560,000,000 profit last quarter. Spread over 90 days that's $28,444,444.44 profit per day. That means that $5,000,000 per day is about 17.6% of their profit. If the EU provides less than 17.6% of MS's market then it'll be actively costing them money to remain operating in Europe.

      The question then is how much money is it worth to retain worldwide dominance? If they loose Europe, it's a massive crack in their market since the multinational companies will have to be interoperable with non-MS software. MS does have a strong incentive to comply here, AFAICS.

  2. Cost of doing business? by nacturation · · Score: 5, Insightful

    If Microsoft is making more profit from its business practices than $5M a day, they've shown before that they'll happily pay the fine rather than change practices. Is domination of the European market worth $1.8 billion a year in fines?

    --
    Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
    1. Re:Cost of doing business? by eric76 · · Score: 5, Insightful

      Actually, Microsoft has matured into a company that cannot afford to pay such fines for long.

      The hit on Microsoft's bottom line and the failure to meet earnings projections would have adverse effects on its share price.

    2. Re:Cost of doing business? by Kinky+Bass+Junk · · Score: 4, Insightful

      "Kroes and the 24 other commissioners would then decide whether to impose fines, which could amount to as much as 5 percent of the company's global daily sales, or $5 million, a day."

      5% of global sales? They'd be fine then... not to mention the fact that that is the maximum fine. It's just like getting the maximum fine for graffiti on trains - you never get it.

      --
      Anonymous Coward
    3. Re:Cost of doing business? by nickco3 · · Score: 4, Insightful

      It's just like getting the maximum fine for graffiti on trains - you never get it.

      Not even rich and powerful graffiti artists with a history of giving the judge the finger?

      --
      -- Nick "Hallo this is Beel Gates, und I pronounce weendows as ... WEENdows"
  3. what is to stop the EU by Dance_Dance_Karnov · · Score: 4, Interesting

    from increasing the fine if MS doesn't comply and just pays it out?

  4. MicroWing by boisepunk · · Score: 4, Funny

    Bill: What happen?
    Executive: Somebody set up us the lawsuit.
    Executive: We get subpoena.
    Bill: What !
    Bill: Main screen turn on.
    Bill: It's you!
    Judge: How are you gentlemen!
    Judge: All your $5 million are belong to us.
    Bill: What you say!
    Judge: You have no chance to win the case make your time.
    Judge: HA HA HA HA

    --
    main(0)
  5. Way too little by kernelpanicked · · Score: 4, Insightful

    "If Microsoft's final offer fails to satisfy the regulator, or if the company does not make its submission in time, the commission will write a formal letter to the company, outlining its concerns."

    A formal letter? When did the world officially lose all its balls.

    Unfortunately $5 million a day to Microsoft doesn't really mean much. A real way to get their attention would be to tell them comply or peddle your crap OS elsewhere.

    --
    Ubuntu: If at first you don't succeed, blindly slap a sudo in front of it
  6. Re:Funny thing is... by LarsWestergren · · Score: 4, Insightful

    This is almost like a personal vendetta on Microsoft directly from the EU. Noone really cares about the Microsoft anti-trust case in Europe, and the Windows XP 'Reduced Media Edition' is a flop.

    It doesn't matter if the average European citizen doesn't care about this, or haven't even heard about it. The European Commission aren't involved in a popularity contest, they are supposed to enforce EU law.

    Why would you buy a copy of a 'crippled' XP over a full-featured one.

    "Vote Cuthulu. This time, why settle for the lesser evil?"

    Its not like you cant just disable the features you don't want in XP (well, for the most part).

    It is the "most part" that is a problem. Also, they are using their OS monopoly to also gain a online media monopoly. This is illegal.

    Even the biggest Linux Zealot would need to admit they have come a long way since Windows 95 and are making improvements in terms of security, etc...

    This is NOT about the quality of the products, this is about predatory business practices designed to enforce an unfair monopoly and kill innovation and competition.

    --

    Being bitter is drinking poison and hoping someone else will die

  7. Re:This the same EU? by 0x461FAB0BD7D2 · · Score: 5, Insightful

    Microsoft is just another company. The EU, even without its Constitution, has taken on the cosmetics and electronics industry, and won. Don't forget that the EU constitutes a larger market than the US.

    As for the EU's inability to get their member states to vote favorably on the Constitution, many believe this has more to do with Europeans' sentiments about their national leaders which are pushing the Constitution through.

  8. Re:Funny thing is... by Anonymous Coward · · Score: 5, Insightful

    This is almost like a personal vendetta on Microsoft directly from the EU.

    Excuse me? Forcing Microsoft to comply with a court order that resulted from them losing a lawsuit because they broke the law is some kind of personal vendetta?

    Just because the EU doesn't roll over and let them off like the USA, it doesn't mean they have a personal vendetta. They just make sure people pay for their crimes, even if they are rich.

    I wish the EU would, uh, 'bugger off' and leave MS alone to correct their ways.

    Why on earth would Microsoft do that? Does a thief stop stealing if he knows he's not going to get punished?

    Even the biggest Linux Zealot would need to admit they have come a long way since Windows 95 and are making improvements in terms of security, etc...

    This isn't about software quality. This is about illegal anti-competitive actions.

  9. Re:This the same EU? by Anonymous Coward · · Score: 5, Insightful

    The one that can't even get member states to vote for the body's Constitution?

    If the countries couldn't say "no" then there would be zero point to the process. And you're right, the countries probably will say "no".

    The EU is not a country, it is a conglomeration of countries.

    Agreed. So Microsoft are pissing off a conglomeration of countries that form the largest single market in the world.

    What is their actual power to enforce these laws?

    The pooled sovereignty of multiple countries... remember your previous sentence?

    Especially seeing as how banning Microsoft on a continent-wide level would be an infringement of each country's right to self-determination.

    Don't be absurd, it would be an expression of their right to self determination just like any other multi-lateral arrangements they enter into. Not that Microsoft would get "banned", just compelled to obey by whatever means it takes including power provided by new legislation if it comes to that - playing chicken with governments on that level is just stupid.

    I think that someone is going to get a huge wakeup call and I doubt it is going to be Microsoft this time.

    In your dreams, sure.

  10. Re:This the same EU? by Anonymous Coward · · Score: 4, Informative

    As for the EU's inability to get their member states to vote favorably on the Constitution, many believe this has more to do with Europeans' sentiments about their national leaders which are pushing the Constitution through.

    Have you tried reading the draft constitution? Seriously, they need to scrap it and start again. Not because it's bad but because it's barely comprehensible. You can pick bits and pieces you like or dislike and try to sell it on that but trying to sell the thing as a whole is impossible - anyone who pays attention will say "no" simply because they don't understand what they're being asked to agree to.

  11. Re:wtf by Kinky+Bass+Junk · · Score: 4, Interesting

    (From The Seattle Times) "It amounts to about $3,000 per hour for one lawyer, more than $2,000 an hour each for 34 other attorneys and $1,000 an hour for administrative work."

    Yes, i know that's an old article, but it would more than likely be similar. When worked out as a 8hr day (9-5), i got $65,400 - not quite $5 million a day.

    --
    Anonymous Coward
  12. Re:This the same EU? by kentmartin · · Score: 5, Informative

    You might want to do a little reading before spouting off. EU law supercedes the law of member states when the 2 come into conflict. The recent developments in the IR35 debacle in the UK are a fine example.

    This is why, as per the article you mention above, there is a lot of dissent among member states about what the constitution is, they are agreeing to that law for themselves.

    Further, my understanding is that the policies with regard to monopolies and competition have already been agreed upon, hence, the 'European competition regulator' whose existence is made possible by The Treaty Establishing The European Community, article 81, at least I think it is 81. Either way, there is a list of what is already in play from that treaty with respect to fair competition here.

    Take a glance at The EU online, and I would strongly suggest you do a modicum of research before spurting disinformation presented as fact.

    People like you piss me off.

  13. Most likely payment method... by jkrise · · Score: 5, Insightful

    would be in the form of free copies of WinXP and Office XP to schools in Europe. And a dinner with Blair while making the announcement, perhaps? -

    --
    If you keep throwing chairs, one day you'll break windows....
  14. Re:They will never pay by rhizome · · Score: 4, Funny

    >It's spelled 'ridiculous' you fucking nimwit.

    It's spelled "nitwit" you fucking dimwit.

    --
    When I was a kid, we only had one Darth.
  15. Re:Bill Will Fill by ottawanker · · Score: 4, Funny

    .. if you consider $5 million a day free, could you please shoot some money my way? thanks.

  16. As the old joke goes... by shadowmatter · · Score: 4, Funny

    Man, if only Bill Gates had a nickel for everytime Windows crashed, he could pay his way out...

    Oh wait, he does.

    - shadowmatter

  17. Re:Explain to me... by yuriismaster · · Score: 4, Insightful

    I think it's because Microsoft sells their product (at a high price) to consumers, has deals with computer chains (Dell, HP, IBM), and FULLY INTEGRATES their products into the OS. If you wanted to remove Firefox and install Opera, you could easily do so. Trying to remove IE results in utter failure, and any attempts to "Set Access Control & Defaults" to remove IE access also fail. MS just doesn't encourage the use of IE, it FORCES them to. That's the difference. MS doesn't have to offer an IE-free WinXP, just one the user can remove without breaking the whole system.

  18. graphics error by Tom · · Score: 4, Funny

    Funny how a story about EU politics is on a US flag background. :)

    --
    Assorted stuff I do sometimes: Lemuria.org
  19. Re:Explain to me... by oddfox · · Score: 4, Insightful

    The main difference between the bundling of applications that goes into the making of any Linux distribution and the bundling of applications and services Microsoft does with Windows (XP especially) is that the bundling Microsoft does is irreversible, you cannot remove Windows Media Player without it seriously hindering the system, you cannot remove Internet Explorer without doing likewise. Windows Messenger often bothers many newcomers to XP who are unaware of how to remove it completely (Granted, a Google search will cure most any problem like that).

    I would not mind at all that Microsoft bundled Internet Explorer, Windows Media Player, Windows Messenger, or any of their other products, so long as they provide the ability to easily and safely remove those and not damage the system's base. They made the OS require all these applications as dependencies, they're more than able to re-work the sytem to accommodate competitors and make it much easier for them to settle in.

    Another thing is that we have yet to see a Linux distributor sued for anti-competitive practices that are illegal.

    --
    "We invented personal computing." - Bill Gates
  20. Re:Why exactly.. by unapersson · · Score: 4, Insightful

    It's not the same at all. Linux is represented by a large number of competing distributions. Linux distro makers can ship whatever media players they want by default, often several competing ones and they're not designed to lock you in to RHMF (Red Hat Media Format). So a distro is perfectly able to not install XMMS by default.

    Is an OEM free to sell a Windows computer with a competing media player instead of Windows Media Player?

  21. Re:Compliance by Raphael · · Score: 4, Informative
    I doubt they make 5 million+ a day in europe,

    The fine mentioned by the EU is up to 5% of Microsoft's worldwide sales (the absolute maximum according to EU law is 10%). As they currently make about 100 million a day, that translates to about 5 million. I expect that more than 5% of their worldwide sales come from the EU, so they probably make more than 5 million a day in Europe.

    On the curiosity side, would someone care to outline exactly what it is the EU is demanding that MSFT do to 'comply'?

    This is mentioned briefly in the article. Compliance requires basically two things: distribute Windows without the Media Player and document the API or protocols used in some server products so that competitors can create products that can talk to Microsoft's products.

    Personally, I am more interested in the second requirement as it could be beneficial to Linux and free/open source software. I also heard that the EU is not happy with the way Microsoft handled that part (restrictive licensing for the documentation) so there is hope that they will force Microsoft to be more open.

    --
    -Raphaël
  22. Re:Explain to me... by IchBinEinPenguin · · Score: 4, Informative

    Monopolies are bad for consumers, so the rules change when you're a monopoly.
    If I make 1% of all cars on the road, and decide to 'bundle' the cars with a certain roadmap, that's OK. Other mapmakers can still compete, consumers still have choice, that choice allows them to exert pressure on the mapmakers to improve their product. This is how capitalism is supposed to work: consumers vote with their wallets to make producers compete.
    If I make 90% of all cars on the road and do the same bundling, other mapmakers are effectively excluded from the market. Consumers no longer have any choice, therefore no way to exert pressure on the mapmaker to improve the product.
    As an example, plot the 'growth' in IE. During BrowserWar1 (IE vs Netscape) IE improved in leaps and bounds. Then it was mostly dormant for a few years (except for patches). Now, with BrowserWar2 (IE vs Firefox) IE is being improved again (IE7 is being released with tabbed browsing).

    competition = choice = power for consumers = better products
    monopoly = no choice = powerless consumers = stagnation

  23. Re:This the same EU? by guet · · Score: 5, Insightful

    Not because it's bad but because it's barely comprehensible.

    Would you care to elaborate? I found it inspiring, not as stirring as the American Declaration of Independence, but good nonetheless, and clear when it dealt with the inevitably complex relations between still sovereign states. From the preamble...

    Our Constitution ... is called a democracy because power is in the hands not of a minority but of the greatest number.
    -- Thucydides II, 37
    Conscious that Europe is a continent that has brought forth civilisation; that its inhabitants, arriving in successive waves from earliest times, have gradually developed the values underlying humanism: equality of persons, freedom, respect for reason,

    Drawing inspiration from the cultural, religious and humanist inheritance of Europe, the values of which, still present in its heritage, have embedded within the life of society the central role of the human person and his or her inviolable and inalienable rights, and respect for law,

    Believing that reunited Europe intends to continue along the path of civilisation, progress and prosperity, for the good of all its inhabitants, including the weakest and most deprived; that it wishes to remain a continent open to culture, learning and social progress; and that it wishes to deepen the democratic and transparent nature of its public life, and to strive for peace, justice and solidarity throughout the world,

    Convinced that, while remaining proud of their own national identities and history, the peoples of Europe are determined to transcend their ancient divisions and, united ever more closely, to forge a common destiny,

    Convinced that, thus "united in its diversity", Europe offers them the best chance of pursuing, with due regard for the rights of each individual and in awareness of their responsibilities towards future generations and the Earth, the great venture which makes of it a special area of human hope,


    It is not the blueprint for a Utopia, but then I don't see any but failed Utopias looking around, do you? I'm paying attention, and I'm going to say yes. Personally I think you're playing to the gallery. Just what would a your constitution for a continent with 25 different countries to be united (some of which don't like the idea of a federal parliament at all) look like?

    Now you can quote some section of legalese from within the 200 pages which you feel is opaque, but in general I felt it was perfectly readable by ordinary citizens of the union when taken together - that to me is a great achievement, particularly considering it's been written in several languages at once and attempts to integrate treaties going back 40 years. Writing a constitution for a group of countries merging is not the same as writing one for a newly formed country and that is reflected in the length and complexity.

    I don't think Europe is yet ready for this kind of ambitious integration, but it will happen at some point in the future.