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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.
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?
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As of July 5th, 2006: 567 days * 2.51 million per day = $1.423 BILLION Is there any way to avoid this fine?
From TFA: "I can assure you that we are continuing to work day and night with our 300 dedicated engineers to create documentation which is complete and accurate to satisfy the European Commission."
No wonder then! If it takes 300 engineers, several nights and days to document the protocols of an obsolete OS..... we should be surprised if Vista ships before 2010!
If you keep throwing chairs, one day you'll break windows....
hmm, ~1.4 billion...
guess bill can only buy 2 small countrys this year,
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.
An EC spokesman was unwilling to comment.
Seconds earlier that night, said EC spokesman was was overheard in an Amsterdam cafe, "Dude! Can you believe it? $1.4 Billion. Pass that shit over here, some jackass American reporter is ringing my mobile."
__ Someday, but not this morning, I'll finally learn to use the preview button.
300 engineers to document some protocols? I could believe 10, maybe 20 could get the job done in a few weeks. How on earth could 300 engineers work together on such a (excuse my ignorance/naivete) trivial job for two years? Hasn't this guy heard of The Mythical Man Month? MS aren't idiots; they've designed the process to fail. They deserve every cent of the fines.
Is that like double secret probation?
I do think some aspects of what Microsoft does will have to change, the fine is not just backdated but also continues every day until Microsoft compiles. Yes Microsoft has a lot of money but that's a lot of money to bleed every year and shareholders will not like it at all.
I do not know what will change, but it's a situation that cannot stand - not to mention that if Microsoft simply coughts up the fine indefinatley it will be raised to an amount they cannot ignore as easily.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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?
To me it's a sad day for America when we have to rely on other countries to police our corporations for us. Of course, I wonder if the EU would have been as hard on Microsoft if it were based in, say, France?
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?
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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.
2.51 million per day backdated to december 15th
202 days
$507,020,000 USD
plus 2.51 each day til they are im compliance.
thatsa pretty big chunk o cash.
they expect to make 11.5 - 11.7 billion this year, losing 5% is pretty bad.
"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.
You have got to be kidding. Microsoft is the only one _you_ see on the news probably. The EU is very strict on this sort of things. Have a look at the EU vs Alitalia or the EU vs Olympic Airlines, or the EU vs BMW and GM. The EU even goes against its own country members if they fail to comply with EU law. No matter how people want to see it, microsoft is not the innocent victim here...
[Offtopic]Congrats to Italy for Barrying Germany 'Squadra Azzurra' Style! I hope you guys lift the cup in the end![/offtopic]
Well it's a corporation. You can't jail it so you have to fine it.
... but one building has all the server farms, and the other building has all the presentation boardrooms ... so they just walk back and forth like it's a regular day at Microsoft. Perhaps they mutter under their breath about the wastefulness of the court's judgment as they go.
Ahh, but there is an alternative punishment - something we can do to corporations that we can't do to people. Cut them in half!
However this raises an immediate question: How do you ensure that the resulting two (or more) entities don't just collude and price-fix their way along as if they were still whole?
It's easy to imagine - two big campuses in Redmond, one given the MS Office suite, one given the Windows codebase - each told by judicial decree that they can no longer cooperate
This is why I wish that as part of a Windows interoperability and documentation settlement, the EU had the authority to say, "Okay, Microsoft. You know that corporate branch you have in Mountain View, where you run all the hotmail services? They're a separate company now, and THEY own MS Office. Expect a phone call from the department chief down there in about a week, asking for all the source code. I'm sure he'll want to establish a relocation package for all your Office coders, too. By the way, the new company is called Officesoft. Play nice with them."
You'd be amazed what a difference physical separation can make in terms of corporate attitude... Unfortunately, the opportunity for a remedy like this for Microsoft withered down to nothing in the first year of Bush Jr(tm)(r)(c)'s reign. Now innovation on the OS front has been STALLED, for 95% of the world, for the past FIFTEEN YEARS. >:(
To be fair, actually using Microsoft products tends to increase my hatred for the company one click at a time.
Contemplating their business practices merely inspires loathing.
i honestly see this as a money grab more than anything else
You need to clean your glasses. This is not a money grab. This is Microsoft CHOOSING to give away money.
Microsoft was convicted of breaking the law, and the fine and penaty was ZERO. NO FINE, NO PENALTY. This is like you break a storefront window, and the court orders you not to break any more windows and to clean up the broken glass all over the storefront and to replace the window you broke. The court requires you to stop breaking the law, and to remedy the damage you did. You (and Micrsoft) get the chance to away scott-free with NO PUNISHMENT for breaking the law.
But then you do something really stupid. You replace the window you broke, but you willfully act in contempt of court and refuse to sweep up the broken glass all over the sidewalk in front of the store. The court gives you a week to sweep up the broken glass, and still you refuse to comply. The court then levies a contempt of court fine of $X per day. And then for the next YEAR AND A HALF you still refuse to sweep up the broken glass. And you call it a "money grab" when you rack up over a year and a half of fines?
Microsoft was given ample tiome to comply. Microsoft CHOSE day after day to willfully act in contempt of a lawfull court order. Microsoft CHOSE to rack up a dailly fine. Microsoft basically CHOSE to give away money day after day. Microsoft could have gotten off scott-free with $ZERO fine.
they'd refuse to pay it
Are you STUPID? Do you seriously think that you can hop on a plane, set up shop doing business in some other country, that you can BREAK THE LAW in that country day after day, and that you could get away with simply refusing to pay court ordered fines?
No, you do not go into some country and dick around with the government like that. At first the courts are nice and simply ask you to pay the money you owe. If you are a moron and attempt to refuse to pay a lawful debt to the government, then the government simply orders the banks to seize and turn over the owed debt from any accounts. And the government can simply order customs to seize any imports/exports from the territory to pay the debt. And then the government can simply order the police to physically seize any physical assets and any and all buildings and land. And if you really piss off the government they can order the police to start physically arrest and imprison the individuals stupid enough to persist in disobeying the law and disobeying lawful court orders.
watch the uproar that would ensue when it became illegal to sell Windows in the EU
Oh, that one is my favorite part! LOLOL!
Let's assume that Microsoft somehow managed to empty all of the money from all EU bank accounts and had no future payments due for collection from EU companies, so that the courts could not simply order banks to hand over the money owed. And let's assume that Microsoft somehow magically owns no offices and owns no seizeable assets and property anywhere in the EU. And let's assume that all Microsoft employees manage to flee the countries and are unarrestable for noncompliance with the law. And let's assume that the courts in the US and Japan and the rest of the planet decline to honor debt collection in cooperation with the EU courts and decline to locally seize any bank accounts and assets.
Let's assume ALL of that. Let's assume that Microsoft could successfully play a game of "Nya nya nya you can't catch me!" with the EU legal system.
Then it gets REALLY fun! Because if Microsoft dissess the entire EU court system and cuts off all contact with the EU legal system, then GUESS WHAT! Then Microsoft cannot avail themselves of benefits and protections of the EU court system. The EU courts can refuse to accept any cases from Microsoft attempting to sue for enforcement of copyright or patent or trademark infringment. The EU courts can effectively null and void all of Microsoft's copyrights and patents and trademarks. All of Microsoft's software would effectively become public domain.
So rather than "illegal to sell Windows in the EU", in fact it could ultimately become perfectly legal for anyone and everyone to copy and modify and sell any and all Microsoft software at will.
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- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
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.
Yes, very insightful.
Apart from the fact that Debian would include several media players and browsers, none of which were produced by themselves and would probably be delighted to include others of sufficient quality. So the monopoly abuse question (which is what the MS issue is all about) would never arise and your example is total bollocks.
Also the fact that anyone is free to take the debian source, make a totally compatable distro and include whatever media players etc. that they like (which can't be done with windows) makes your example double extra mega total bollocks.
I wish I wasn't forced to post as AC (by slashdot's bizarre IP address blocking which seems to exclude entire ranges from logging on for no apparant reason) so I could see if you attempt to justify your amazingly ignorant opinion which always crops up at least once every time the MS/EU issue is discussed.
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I can run a mixed Windows and Linux system in either a flat TCP/IP network or a Microsoft style Active Directory. I can even use a Linux box as the DC. How exactly does that not mean "interoperability"?
Because MS does everything in its' power to make it not interoperate.
because offering a peek at the goddamned source code didn't go far enough, right?
No, it didn't. Not when the "peek" meant that you can't actually fscking use anything you might learn from it. If the "offer" didn't include a draconian NDA, then it might have come close.
What great MS spin you have there. You must work for the justice department.