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EU Fines for Microsoft Approved, Off the Record
mattaw writes "The Register is carrying a report that all 25 member states of the EU have found Microsoft guilty of non-compliance, off the record. Microsoft is in line for a fine of $2.51 million per day backdated to December 15th 2004 for failing to meet the terms of the EU commission's ruling."
It doesn't really mean all that much. Microsoft will do some kind of wheeling and dealing efforts to 1) lower the fine and 2) establish an even stronger marketshare in the EU such as giving away windows/office/etc to schools, businesses, etc. Sadly, in the end it all works out for redmond.
It's just too bad that the only one they ever seem to go after is Microsoft.
If you think a goverment is anything more than a corporation with guns, you're fooling yourself.
Yet, it's probably less money than they gained from their anti-competitive practices during that time.
Opus: the Swiss army knife of audio codec
My first reaction was "w00t, MS is being fined > 1 billion". But, then I thought about it for a bit. Does even microsoft deserve that kind of ruling? They actually have made some changes, like the windows version without windows media player. And > 1 billion hardly seems to be a fair amount to charge for not documenting your software properly, even if you are a monopoly. It just somehow feels like theres something not right about it, even if it does give me the "eat that microsoft" feelings... call me strange if you want.
IMO, that's about as likely as Microsoft actually paying such a fine.
I mean, seriously, what's to stop Microsoft from just saying they aren't going to pay. Has the EU really got the balls to stop them trading (in EU)?
I, for one, don't think so. I wish they did, but...no. There'll be some big argument over the whole thing and they'll come to some 'compromise', just like they did in the US.
Max.
MS is getting off cheap. The EU can currently fine a company 10% of their GLOBAL annual turnover. So a fine of only a billion or two is just a warning.
But, really, what can you say about a company who seems to be unable to produce _usable_ technical documentation for their headline product?
If they really cared about this fine they'd refuse to pay it and watch the uproar that would ensue when it became illegal to sell Windows in the EU.
It will never happen. Even if (which I doubt as they'll at least try to kill eons with negotiations) Bill has to write the check (and keep writing them daily until the EU is satisfied) there is no way in hell that M$ will just let the EU default to linux or the various bsd's.
As for the price per day, ISTR seeing someplace that the fine was chosen to match the estimated sales per day within the EU. Can anyone deny/confirm that? If true, then I don't see it as excessive. Were I setting it, given the testimony thats been given ink that I've seen, I think I'd have chosen it to be a net loss per sale, of the price of the sale, or 2x the street price.
I'm with Linus in this: "If we change how microsoft does business, then we will have won".
As for the billions Bill has, I would wager that if he actually did business on the merits of his product, 2 things would have already happened. 1. Windows would be a hell of a lot more stable and secure than it historicly has been, and 2. He would have made even more money! Of course that would have had to happen 20 years ago in order to head linux off at the pass. I don't recall what his worth was then, but it surely would have been sufficient to survive the corporate direction change that would have required. One things for sure, M$ has enough in the bank to survive a rebirth in the business office, so I fail to see why the hint isn't being taken other than the corporate blinders are causing a total, identifiable by any optometrist, case of tunnel vision.
--
Cheers, Gene
Now roll that 1 billion dollars into OSS development to bring an open source OS and applications up to truly competitive levels with MS. Hell I'd even be satisfied if they paid EU software companies to port their application software to OSX. Just get some freaking competition in there already...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
It might be "chump change", but it seriously eats the daily profits of the company all the same (As in the damn fine eats approximately 1/20th of the profits per day...)- and ultimately they're answerable to the shareholders. They could have avoided this drag on profits- which is what is going to be the only thing they're going to see.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
Nope. I think you have it the wrong way round. The fact that Microsoft is an (illegally maintained) monopoly, is what *allows* them to sell an operating system for 300 - 400 instead of a more reasonable 50 - 100.
So roughly that's a year plus 7 months is ~575 days * 2.51 million, that's ONE BILLION DOLLARS! (1,443,250,000) Who let Dr. Evil run Europe?
1. Maybe the judges reckon that MS made much more than ONE BILLION DOLLARS with their anti-competitive practices...
2. Maybe they felt that the fine should be high enough to deter continued violation, but lower than MS's profits in the EU... thus MS would consider compliance the better policy?
3. Maybe the judges aren't so happy to let the Corporate Mr. Evil run unchecked in Europe?
If you keep throwing chairs, one day you'll break windows....
So I don't know much about this, but according to a quick search I came up with 13 200 000 000 as a rough estimate for europe's GDP for 2002. Is 1/132th of a percent of their GDP going to make a difference in their budget spending? doubtful. But it will make a difference to Microsoft. I don't think this is a money grab at all, but that's just me.
"Microsoft, being at the top of the OS market, will simply add the costs of the fines to the price they charge for their OS."
That's not how monopoly pricing works; that's how a perfectly competitive market works. In a perfectly competitive market, adding to the costs increases the price because the price is driven down to the cost (the supply curve). In a monopoly, adding to the costs has zero effect, because price is determined by *demand*. I.e. they sell the OS for the most that they can get already. If they could sell it for more, they already would.
With monopolies, prices are chosen because an increase in price reduces the quantity of sales such that total revenue drops. Similarly, a decrease in price reduces revenue by more than the increased quantity of sales, so that total revenue drops. This fine does not affect that calculation in any way. Therefore, for them to increase prices, they would either have to accept lower revenue or they would have had to have been underpricing their product. I.e. charging less than the market would bear.
> "what's to stop Microsoft from just saying they aren't going to pay"
My god, did you really just say that? And you even got an "insightful" mod--that's just sad! Microsoft has billions and billions invested in Europe. They have money in European banks, they own property, etc. They don't have the option of refusing to pay! The European governments can, if they want, just take the money! Bam, done! Heck, a billion dollars probably wouldn't even put a noticable dent in their European assets.
And anyway, Microsoft isn't going to fight over what amounts to a slap on the wrist. At least, not if it looks like they're risking losing even more. Even with this fine, Europe is still an incredible, unbelievable source of profit to Microsoft. Collectively, the second largest economy in the world, IIRC. There's no way they're going risk all that money just for this tiny little fine that is more-or-less the equivalent, to them, of some change found under the cushions, to you and me.
The fine is backdated to Dec 15 2004.
At some point it becomes criminal, and you start hauling directors and execs off to jail.
In general big companies may play around where fines are concerned, but when it comes to the things that might send directors to jail they play by the rules.
They very much take the attitude that shareholders money is theirs to play with, but when it's their own ass on the line they're more circumspect.
--Q
You mean Microsoft has done no wrong and no damages in the EU, only the US? Welcome to a more global world.
True confidence comes not from realising you are as good as your peers, but that your peers are as bad as you are.
There is no reason to even discuss the idea of stopping them from trading. There is a standard and established process for getting the money from people who default and that is to take away their property. Microsoft has a lot of property in Europe, far in excess of this penalty and the courts will take possession of that property if Microsoft fails to pay. There is no problem here at all, the courts have been doing this for 100s of years.
I love stacking my barbecues in the shed at the end of summer - you can't beat a bit of grill on grill action.
This is what happens when state-enforced monopoly (copyright) and state-enforced competition (anti-trust laws) collide.
Set your phasers on "funky"!
After seing many of the posts here on /. i don't understand this "poor Microsoft evil EU mentality".
You see, my biguest personal grip with the law in capitalist countries at the moment is how disproportionaly harsher it is on individuals that it is on companies - for example, if an individual kills someone due to negligence he/she goes to prison, while if a company kills multiple people they get a fine.
Even more relevant to this situation is the disparity when both the individual and the company do something for which they are fined: the issue here is that, proportionaly to the annual income of the individual and the company, a fine with the same value usually is a much higher burden for an individual than for a company. Worse still, for equally harming crimes, companies often get lower fines than individuals since they have beter lawyers, beter connections and the law is (thanks to many years of lobbying) skewed to be harsher on the types of crimes done by individuals than one those done by companies even when both crimes do the same amount of harm.
So back to the fine on MS and to put things in perspective:
- MS had in the year of 2005 a net (thus after taxes) income of $12254 millions, a fine of 1.400 millions is thus 11,4% of their net income.
- For an individual making $150000 bruto per month, with a 30% flat income tax (thus $105000 net income), an equivalent fine (thus 11,4% of their yearly net income) would be $11970
Thus, Microsoft's fine is equivalent to a $11970 (in one year) fine for an individual with an well above average income.
Actually, it sounds like a small thing because that's not the whole thing, and it's the least of the non-compliance problems too. MS was basically ordered there to _also_ sell a version without it, which isn't even much of a punishment when they can keep selling the version _with_ Media Player too.
The current fighting is over the other, and more important part there, namely APIs and protocols. MS has been given a list of stuff it must provide adequate documentation for, and to everyone. That's all.
Basically what the EU is saying is "wtf? A situation where only Windows workstations can talk to a Windows server is a recipe for a monopoly. Do be so kind and provide the documentation for those protocols." It's just telling MS that its products should compete with others on their merits, not on being the only thing that can interoperate with their other products. It shouldn't be years of guesswork and reverse engineering just to get a Linux or Solaris box to talk to a Windows server.
And MS so far has been playing hardball and turning it into a media battle. It started by pulling stunts like selling some libraries and docs preferentially and putting some stupid conditions on getting them. (E.g., literally, you can't use them in an OSS product. Literally.) Then it offered a bunch of undocumented and incomplete implementation code. (The EU says: sorry guys, we asked for protocol documentation. Be so kind and provide the docs.) And so on. And, again, it's been busy astroturfing and turning it into a media posing contest.
And IMHO the court has played pretty nice so far. Even the fine is "backdated" and thus so large, because, seriously that was the final date at which MS was ordered to provide those docs. At some point, after giving MS ample time and letting them delay for years, the court basically said, "No, this is final. At date X you must provide those docs or pay a fine per day." It still gave MS more timeouts even after that, and a chance to not pay those fines, but under the explicit condition that, seriously, if MS still doesn't comply than the original date still stands.
Basically, seriously, if I did half that shit in a court of law, I'd be in contempt and probably facing some quality time behind bars. I'm not anti-MS or anything, but at some point a court of law must be able to enforce compliance or it becomes just a joke. You can't allow someone to basically just refuse to obey for years.
A polar bear is a cartesian bear after a coordinate transform.
If you think that a corporation is anything more than a government without laws, representation or even a theoretical interest in human life and dignity, you are fooling yourself.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Relieving Microsoft of their copyrights within EU member states would only serve to worsen the addiction to Microsoft's proprietary software. The present path is best: financial incentives to comply with a demand for documentation so that other software companies can develop software to inter-operate with Microsoft's offerings on the same footing as MS has.
Were the EU to deny Microsoft copyright protection in its member states, I suspect that the Microsoft would lobby the US Government to act in WIPO and WTO (with other small countries bullied) to impose sanctions upon Europe. It's been a while since we've had some empire-wrangling (well, since the allegations that Saddam Hussein was planning to sell Iraq's oil in Euros before 2003's 'liberation') and that could interesting times indeed.
Why not use the SI (metric system) prefixes and avoid any ambiguity?
US Imperial SI
10^3 - thousand - thousand - kilo
10^6 - million - million - mega
10^9 - billion - milliard - giga
10^12 - trillion - billion - tera
10^15 - quadrillion - trillion - peta
10^18 - quintyllion - quadrillion - exa
"National Security is the chief cause of national insecurity." - Celine's First Law
I know this is a little upside down compared to other parts of the legal system, and that counterintuitive element is probably one reason why the issue is sticky. For example, in the realm of personal conduct, the law works better when it tells people what they can't do (you can't hurt other people) instead of what they can do (Conduct Code Article 2,334,202 (a)(iv): you may brush your teeth with either your left or right hand).
But with the Microsoft situation, it's different. I think it hurts consumers when you tell Microsoft they can't bundle office and media player and IE and whatever other functionality in with the operating system. I'm a consumer, and I would like those things bundled. So I don't think it is necessarily a good thing for the courts to tell Microsoft "you can't include this or that feature with Windows." But I think the court definitely should be able to say, "you must provide documentation and APIs and whatever else to make your stuff interoperable with other company's products and services." That makes much more sense to me.
Basically, it levels the playing field not be crippling Microsoft, but instead by enabling others to better get a toe in.
In principle, I don't think it is fair to cripple the more-able just for the sake of making things fair for the less-able. When I was a kid in Michigan we had 'accelerated' gradeschool classes for gifted kids in math and whatnot. Then during the political correctness craze they got shut down for being 'unfair' to other kids. Maybe it has since changed back, I'm not sure.
It's basically the Harrison Bergeron Principle (after the 1961 Kurt Vonnegut short story). In that story, "equality has been achieved by handicapping the most intelligent, athletic or beautiful members of society down to the level of the lowest common denominator." [wikipedia]. The point is, that is the wrong approach. While I may not be Microsoft's biggest fan, I think it is the wrong approach with Microsoft as well.
A-Bomb
If you think a goverment is anything more than a corporation with guns, you're fooling yourself.
All the more reason to keep the corps and the gov against each other since when gang up together against us it's the worst of both worlds.
You're funny. You think that Microsoft keeps all their assets and money in a big vault in the USA where the EU can't reach it. Do you think Microsoft only exists as a walled citadel in Redmond and a big delivery truck drives out every week with a 'Europe' sticker on its side? Do you think that once the EU is thwarted they will throw a huff and outlaw Microsoft products?
What's more likey, (meaning it's only slightly more likely than something that's never going to happen in a billion years) is that if MS doesn't pay, the EU would withdraw all legal protection from MS products and licences. Effectively make them free in the EU.
Disclaimer: I'm an American.
You're the kind of idiot that makes us look bad.
You want to sell products in Europe? Play by Europes rules.
You want to sell products in China? Play by Chinese rules.
Tell me, how do you feel about it the other way around? Do you think BMW should be "forced" to abide by American safety standards on its cars?
Do you think the Airbus should be "forced" to pay attention to the FAA when building its planes?
Do you think that French wine manufacturers should be "forced" to agree to FDA labelling requirements?
What about the U.S. "winning" the battle against European subsidies for Airbus. Sounds like 'foreigners' doodling with a European company.
What's good for the goose is good for the gander. If you're going to play on the world market, expect to following the rules of other jurisidictions. Otherwise, pull your products out.
MS doesn't have to pay the EC. They could simply withdraw from Europe, and totally ignore the EU's rules & fines & taxes. It's no one's fault but Microsoft.
WhiteWolf666 an exBush supporter. All you new-school,compassionate,save the children Republicans can rot in hell