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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.
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.
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?
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?
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....
"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.
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.
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