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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.
1. The fine has to be big enough to sway the company receiving it. A billion dollar fine would be overkill for most companies, but MS isn't most companies. Consider that they made much more than this from the European Market in the meantime.
2. And also to be fair, from what I have seen, MS has been bobbing and weaving like an aging boxer to avoid most of the spirit of the rulings. The commission gave them, up to now, 1.5 years to comply. And the company has been dragging its feet in every direction. This didn't come out of the blue.
3. If you think this is harsh, consider that an American judge had ordered to split the company up completely.
BTW, I am not for the commission completely (as I am not pro-EU, the EU tries to get into every aspect of European life which I abhor) but MS doesn't have to do business in Europe. I don't know if this will finally pass but it just has the balls to do what the US Justice Department was too corrupt (from up top) to finish.
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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.
"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.
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]
And > 1 billion hardly seems to be a fair amount to charge for not documenting your software properly
Because that is NOT what they are being fined for.
Microsoft was convicted of breaking the law, and the court levied NO punishment - I repeat *NO* punishment for that crinimal behaviour. The court merely ordered that they stop engaging in that criminal behavior, and ordered a remedy merely to stop the damage to the market from continuing. The remedy specifically being an order to permit a version of Windows with Media Player unbundled, and to document the protocols to permit competition in other software markets on an even footing. (Note that the US anti-trust conviction of Microsoft was purely remedy and carried no punative component either.)
So why is Microsoft being fined well over a billion dollars? Because they did something else illegal!
Microsoft is being fined for willful contempt of a lawful court order! The conviction and cort order was long ago. Microsoft deadline for compliance with the court order was over a year and a half ago! And like an overdue library book, Microsoft has been racking up a daily fine for their willfull disreguard with a lawful court order.
Microsoft has drawn out this battle for so long that Microsoft gets to reap the rewards of their illegal behavior, and any remedy to terminate that particular illegal behavior becomes null and void. By the time this fight ends, Windows Vista will be just about to hit the market. Any documentation for working with previous operating systems becomes pretty well moot. Microsoft is using an illegal delying tactic to defeat the court order - to defeat the court itself. And delaying and refusing to comply with a court order carries a very specific penalty at law. That illegal behavior carries a signifigant $ daily fine. And that fine is entirely under Microsoft's control. Microsoft has chosen day after day to continue violating the law. Microsoft has chosen day after day to increase the fine they have to pay. Microsoft could have gotten off with $ZERO fine had they complied a year and a half ago.
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- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
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.
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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