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'No Alternative' To Microsoft Fine
An anonymous reader writes "News.com is running an interview with Neelie Kroes, the competition commissioner for the EU. She confirms that the massive fines to Microsoft are absolutely necessary, and goes into some of the commissions reasons for slapping the giant down." From the article: "Microsoft has claimed that its obligations in the decision are not clear, or that the obligations have changed. I cannot accept this characterization--Microsoft's obligations are clearly outlined in the 2004 decision and have remained constant since then. Indeed, the monitoring trustee appointed in October 2005, from a shortlist put forward by Microsoft, believes that the decision clearly outlines what Microsoft is required to do. I must say that I find it difficult to imagine that a company like Microsoft does not understand the principles of how to document protocols in order to achieve interoperability. "
"I must say that I find it difficult to imagine that a company like Microsoft does not understand the principles of how to document protocols in order to achieve interoperability."
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What's so hard to understand about this? This is a company which regards their software as "most secure ever" just before a several years of gaping security flaws are revealed and exploited. Many of the security flaws are in the gaps between divisions, where one division sees the appropriate way to validate passed paremeters is to trust everything is just peachy.
It's a cultural thing, sieze markets today, and bluff your way past the carnage tomorrow. e.g. revealing Windows security flaws should be halted by the Department of Homeland Security as it represents a threat to businesses which use the software (no liability is expressed or implied by the jokers who make billions selling it, however)
Microsoft should license rights to use those egg-headed Precious Moments figurines and release one each time they're caught bullshitting on trying to quash other markets with bundled give-aways or why some open standard isn't for the best. "Me sowwy!" It always has been and always will be about promoting Microsoft, to keep it relevent and necessary to guarantee the gravy train never ends. Thanks EU for having some balls, which the US DoJ doesn't.
A feeling of having made the same mistake before: Deja Foobar
Something about "old dogs" and "new tricks."
At least this is a bit more than the wrist tap Microsoft received for its anti-trust violations in the US.
Great, they slapped Microsoft hands for this but who is getting all this money and what are they gonna do with it?
I keep telling myself I'm not the desperate type.
How about that?
When does this become more than a case of he-said she-said? Microsoft claims its obligations were not clear, others claim they were. Isn't that the ideal situation for keeping this in the courts indefinitely? I have to think that we would have seen this all across the usual news channels (TV, newspaper, magazines) if this fine was really going to have teeth this time around. The whole case seems destined to simmer beneath the surface. I hope that the fine actually will be paid, but can anyone outline how that could happen?
The Department of Justice did at one point (I mean, they did win the antitrust case against Microsoft you know) but when the regime change occurred their priority system got readjusted. At least, that's how it appeared to me at the time.
The higher the technology, the sharper that two-edged sword.
The Department of Justice did at one point (I mean, they did win the antitrust case against Microsoft you know) but when the regime change occurred their priority system got readjusted. At least, that's how it appeared to me at the time.
Oh, obviously. It's like Bush hung out the shingle "Open for Business with Business" when the greatly watered down justice was finally meted out, and astoundingly Microsoft continues to violate even those terms with seeming impunity.
A feeling of having made the same mistake before: Deja Foobar
Spendid bit of ad hominem flame baiting/trolling there. To be clear. Are you saying that the EU Commission is being "corrupt" in some way here? I'm not a fan of much of the Commission's work and its inability to get it's budget through audit for (how many?) years is ludicrous. In this case though, it appears ti have been transparent and straightforward.
This is a company which regards their software as "most secure ever" just before a several years of gaping security flaws are revealed and exploited.
They said that it was the most secure Windows so far; are you disputing this?
revealing Windows security flaws should be halted by the Department of Homeland Security as it represents a threat to businesses which use the software
I can actually see the logic in that. I do not agree with it (if one person has found an exploitable flaw, chances are someone else has or will), but it's not an entirely stupid idea on the face of it (you have to think about it to realise how dangerous it is).
no liability is expressed or implied by the jokers who make billions selling it, however
Very very few software licences do not disclaim liability, the GPL included. It's extremely hard (and time consuming, and so expensive) to create software that can be guaranteed exploit-free, and this difficulty increases as the complexity of the software increases.
Thanks EU for having some balls, which the US DoJ doesn't.
Well there's one thing we can agree on. I personally think that MS's software often gets too raw a deal here, but some of their business practices are deplorable. It's nice to see that someone finally has the guts to stand up to them and actually impose the punishment they threatened them with for a change.
It's official. Most of you are morons.
I do not agree that paying up the money is a big deal for M$. It will not change it's behavior. I was at M$ one day presenting them a Field Service system. The first quest the program manager of that group asked me point blank was - "How much is it going to cost us so that you do not do this on the Palm?" This is their attitude. Money no matter. The best method to cut this monster to size is to seperate it into parts - OS and development platforms, Office apps, Business Apps.
NO INTEROPERABILITY: This is their established mode of business.
Even this fine is nothing. Equivalent to ten days profits.
All this is is a simple tariff on doing buisiness in the EU.
Paying the fine is the most economic alternative for MS.
And have you heard about competition? It is out there and if Microsoft suddenly increased their prices - woohoo! On the other hand you do know that the EU commission can take action against such measures by Microsoft? You really need to do better research before you post - or at least know something on the subject before you reply.
They could (if the EU does not prevent them), but that would only serve to deter sales, which for large "enterprise" organizations always involve heavy discounts from the "list" price anyway. Unlikely.
But even if that happened, would it be a bad thing? Wouldn't that make Linux or other Windows alternatives look that much better?
If you want news from today, you have to come back tomorrow.
i see government trying to foster competition in the market. what do you see that i don't?
pr0n - keeping monitor glass spotless since 1981.
At least, that's how it appeared to me at the time.
Only if you ignored the appeals court ruling, which Microsoft mostly won. Bush probably did go easy on MS, but the government did not have the court rulings to impose EU-style penalties. This would have been true if Gore was elected also.
Obviously, Neelie is not a programmer and has never tried to write a program in a Microsoft environment, or even tried to figure out what their documentation is supposed to mean... If anything.
The example below is my favourite piece of Microsoftism, from the "I cannot believe that I am actually writing this" department:
IXMLDOMDocumentPtr pXML = NULL;
...
HRESULT hr = pXML.CreateInstance(_uuidof(DomDocument40));
pXML->async = VARIANT_FALSE;
pXML->validateOnParse = VARIANT_FALSE;
pXML.Release();
And yes, this compiles and works. Surely there must be other gems of Microsoft protocols out there. Any other proposals?
I believe the Comission is wrong, and the companies that are lobbying the commission to get access to these protocols are even more wrong. We should not want more software that relies on more Microsoftisms. Au contraire.
I wish I had a list of the companies that are sueing for these protocols being made public. Then I would at least know whose software I certainly do not want to buy.
If the EU fines MS $357M, MS can simply raise the price of their European software by $357M.
MS has been a monopoly for a long time. When a monopoly sets prices, they do it based on supply and demand (not competition). MS could have set the price of Office at $10, which would have increased the number of copies sold, but would have still led to a net loss of revenue because the revenue per copy was so small. MS could have set the price of Office at $10,000, which would have meant more revenue per copy, but much lower sales, and again lower total revenue. Somewhere in between $10 and $10,000 is where they decided was the optimal figure. Even though MS is a monopoly, the number of sales does depend on price. At lower prices, they would make more sales in countries like Greece and Argentina, where a lot of people could afford a license, but use illegal copies instead in order to save some money. At lower prices, they would also make more sales to people who would otherwise have been willing switch to (or keep using) competing products like MacOS, WordPerfect, and OOo. At very high prices, they would retain a lot of Fortune 500 companies, but lose a lot of home users.
Since MS has already set the price of Windows and Office at what it thinks is the optimal level in order to maximize profit, it's not true that they can just raise the price in order to cover the fine, without having it cut into their bottom line. Higher prices would be less optimal for them, which is why they didn't set their prices higher before and simply reap additional profits.
Find free books.
I'm not sure who here is lacking an understanding of the fundamentals of business.
Microsoft is surely already selling at prices which maximize their profit. If they were selling at a lower price, they wouldn't need a fine from the EU to convince them to raise it; they just would, because they'd make more money that way. Since they haven't done so pre-fine, what makes you think they would do so post-fine?
Of course this would be more complicated if they were being fined per copy, or per customer, or some other strange scheme, but they're being fined *per day*. The only thing MS can do to reduce their fine is to somehow operate during fewer days (?) or comply with the EU's demands and end the fine entirely. Irrationally raising prices (and thus *hurting* their bottom line) does neither of those things.
There is a big difference between the people at microsoft knowing how to document protocols and microsoft the corporate entity knowing how to document a protocol.
The main difference is that a corporate entity of the size of microsoft is represented by Lawyers, not engineers.
If they say say they cannot comply, and the lawyers provide lots of reasons which keep the facts in dispute, then they get to pay a nothing fine and maintain their advantage.
Losing their monopoly position would potentially mean the collapse of their major product lines, in terms of market share.
I'd be willing to bet that if microsoft the corporate entity felt this was something they desperatelly needed, they'd throw the engineers at it.
When a sovereign country (or the legal representative of something like a dozen or more sovereign countries....) says you're wrong, you're WRONG.
Your characterization is the equivalent of Charles Manson saying the reason for his prison term was that he didn't understand his obligations.
Microsoft knows damn well what's expected of it, they just don't want to do it because they won't survive in an open market. Too damn bad they're fighting against the commodization of software - a type of fight no one in the history of business has ever won.
My heart bleeds.
Great, they slapped Microsoft hands for this but who is getting all this money and what are they gonna do with it?
/.ers tens of millions wouldn't it? Oh yes, VOTE FOR ME!
I propose that there's some fund so that every time you have to spend 3 hours 'weeding' Windows for your parents or Auntie Doris or whoever you can bill the fund at $100 p/h for your time. Collectively this would make
spoonerize "magic trackpad"
For a company in which just one member of it is worth at least 100 times that, how is this going to do anything?
g islation/98c9_en.html
Look at as a shot across the bow. Maximum anti-competetive fines are 10% of worldwide turnover. And as "aggrevating circumstances" they give examples like:
- repeated infringement of the same type by the same undertaking(s);
- refusal to cooperate with or attempts to obstruct the Commission in carrying out its investigations;
Source: http://ec.europa.eu/comm/competition/antitrust/le
While I agree completely that the EU is just as corrupt as any other government, I would not go so far as to say they are as corrupt as the US government. I'd like to point out that while the (total) fine of around 1 billion dollars, is very large, it is ridiculous to suggest that the EU is in it for the money. The projected EU GDP for 2006 is 13888 billion USD, and 1 measly billion more is hardly gonna make the commission salivate.
Do we know how this fine will be paid? In the past, MS has always tried to pay in gift vouchers, as far as I know - will they be allowed to do so this time? The mention of a blocked account would seem to imply cash, but does anyone know for sure?
Because there's a difference between a companies value and the amount of cash it can afford to spend. How much of that 'worth' is tied up in property, IP, bonds, etc. and how much of it is available as cold hard cash?
The whole point of a fine is to be a punishment, severe enough to bring it into line, but not severe enough to break it altogether. MS Europe's liquid assets also have to pay its day to day running costs, as well as any fines. With that in mind, the EC would be nuts to fine it too heavily.
At least, right now. If MS doesn't come into line, then it's likely that the EC will up the ante and approach the problem from the bottom up - keep raising the fines until they're big enough to make MS come into compliance, as opposed to aiming high and striking the heart with the first shot.
I think interoperability will hurt the bottom line more than the fines, cause they are a multinational that operates all over the world and not just in EU. Full interoperability would obviously hurt sales of Windows licences, esp in the enterprise. And its just what the fine is about, that they are using their market share on the desktop to monopolize the enterprise sector too. Its not about security, which is a technicality and can be improved. Its all about revenue..
True, but they still managed to get themselves ruled an illegal monopoly ... it was the penalties phase that was largely altered by the appeals court.
The higher the technology, the sharper that two-edged sword.
Two versions of 'reasoning':
EU - company found in breach of law, company fined, company chased for the money
US - company found in breach of the law, company convicted, company asked to 'play nice' and nothing else done
I'll take the EU version thanks.
Indeed. Comply to our laws, or else...
If Microsoft wants to play on our playground, they will have to play by our rules. Do you think that is unfair?
'' Do they? Do they really have to pay? Is the EU really in a position to block sales of the worlds most "popular" OS for business? I think while it would not endure Microsoft to the EU, they would be politically unable to ban Microsoft from selling their product to Europeans. ''
If a company refuses to pay a fine, they just send in the bailiffs. They go into all Microsoft offices anywhere in Europe and confiscate anything of value. Desks, chairs, any software lying around, computers. That stuff will then be auctioned off. You might be able to buy Microsoft Office quite cheaply. If that isn't enough money, they confiscate all money in bank accounts anywhere in Europe. Which means that Microsoft employees will not get paid. If that isn't enough money, they order all major customers to make payments not to Microsoft anymore. If that is not enough, bankruptcy proceedings will be started.
Not playing a fine is a very, very bad idea for any company.
like they do in Texas, they demand all others to pay cash anyways.
The EU's "monopoly commission" (equivalent to the FTC in the US) does have teeth, and regularly does impose fines that are larger in proportion to the company size than those imposed against Microsoft.
Most of these, however, are imposed for illegal price-fixing between different companies.
Seriously.
Do you worry where your speeding ticket goes?
Why do you care about where this goes.
It'll go the same place they always go.
would you prefer MS kept the money?
It seems to me this is really about whether governments have the ability to enforce the laws they create. Whether EU legislators truly represent the will of the people of the EU nations is debatable, but the EU is a governmental body that in theory speaks for the people it represents. Here we have a governmental body telling a corporation that it has violated the rules of doing business. The EU isn't telling Microsoft that it can't sell its products anywhere. It is sending a clear message to Microsoft that if the company does business in the EU, it needs to do so under the EU's rules.
It isn't a surprise that collectively the EU prioritizes cultural, economic, and political issues differently than the United States, so it seems absurd to me to expect that they'll change their rules just for you when you do business there. Apple can elect to stay in the EU market and deal with the ramifications of iTunes/iPod-related legislation, or it can stop doing business there. The same thing is true of Microsoft. They make billions of dollars in Europe. They can forgo making those billions, or they can stop whining that they didn't know exactly what the EU wanted, and start complying. It's obvious what the EU wanted, and it's obvious that the EU tired of Microsoft's endless legal maneuverings. Now Microsoft is seeing that the EU is serious. Massive corporations do not have unlimited power, even when they think they do.
Read the EFF's Fair Use FAQ
Revoke M$'s IP rights/copyright in EU as a remedy. Seems right given the issue at the heart of this. That'll get their attention... Doubt thats actually possible, but damn, it could be fun to watch....
-Em
RelevantElephants: A Somatic WebComic...
Oh, come on! This is what? Like 1/20th or 1/40th of what a tiny country like Sweden transfers to the EU budget ANNUALLY. Sure, this will put the budget out of the red if they are in a pinch. Suuuure.
Karma: 2.71828182846 (Mostly due to small, fun pills)
Second, any government power is illegitimate. The EU harms both its citizens and Microsoft by standing in between.
Yes, Just as US harmed its citizens by standing between Enron and all the people they swindled.... Damned that government power, Lets all have a minute of silence for fallen freedom fighter Ken Lay!!!
RelevantElephants: A Somatic WebComic...
There are some rules in the financiaæ world thet requires proper documentetion of allmost everything. Now MS just said to the public that they do not have the proper documentation for the product they sell... so there may just be several large financial institutions (at least in the EU) that may not use MS software due to the now officcally known lack of documentation.
There are already viable OS products being GIVEN AWAY that run plenty of software and are more stable.
Are you stupid? I've seen your rants further up, and you seem to have no idea about the issue at all. Those products you speak of are severely hampered because they can't interoperate with the entrenched quasi-monopolist, and this is what the ruling was about: MS was ordered to document their stuff so that interoperation is possible in the interest of the user. MS didn't comply and thought they can weasle out of this. They have been fined, and rightly so.
"When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
The petitioners are asking for the details of the protocols, not the exact implementation of those protocols. Maybe their code is ancient and crufty and you could reimplement it in 10,000 lines of C instead of 150,000 if only you knew exactly how they worked. That is what they're requesting.
Dewey, what part of this looks like authorities should be involved?
Not really. The court ruled that while there was no actual impropriety on the part of Judge Jackson, there was the appearance of it, and that was largely why they threw out Jackson's breakup order. At least, that's how it was explained in the mainstream media. Microsoft was ruled an illegal monopoly by the original court, and that ruling was upheld by the appeals court. The only issue was what remedies should be applied: Jackson wanted to break up the company according to antitrust law, the appeals court rescinded that order and imposed lesser sanctions, which have apparently had little effect on Microsoft's behavior. Improprieties or not, history will probably show that Jackson was right.
... just ask the antitrust folks at the DOJ. They were pretty torqued off about the whole thing, since all their good work went for naught.
I don't know about "the fundamental sanctity of Windows", whatever that means, but the reality is that Microsoft was taken to court over multiple antitrust violations, perpetrated over decades, involving multiple corporate customers and competitors, and billions of dollars. The company was convicted of those illegalities, and was then let off the hook. Say what you will, Microsoft got a free get-out-of-jail card
The higher the technology, the sharper that two-edged sword.
That's a part of reality. Another part is that MS forged evidence in court and wasn't disciplined for it. (Remember the fake video?)
So even under the Jackson court MS was being given an insane amount of leeway.
I think we've pushed this "anyone can grow up to be president" thing too far.
.....Thanks EU for having some balls, which the US DoJ doesn't.....
I wonder if the issue really is the vaunted MS protocols. Are there no clever people in the EU or elsewhere who could reverse engineer these and make them available to anyone? The EU, or any government for that matter, could amend their laws such that copyrights or patents are not violated if done for the purpose of interoperability. Even if someone distilled or even outright copied the protocols for the SOLE purpose of ensuring interoperability, their laws could be changed to allow for this. France recently went after Apple and their music DRM protocol. Instead of forcing Apple to give that up, why did they not simply rescind DRM protection laws similar to our beloved DMCA? In short order someone like DVD Jon would come up with a way of stripping DRM protections and there would be no law protecting Apple's or any other DRM system.
Doing this of course would subject everybody, including their companies to the same rules. It appears that the EU is singling out the most successful American companies and punishing them because their own businesses are not managing to compete on the open market.
All theory is gray
I have heard enough of their sales pitches to know that Microsoft's concept of interoperability is simpe and they grasp it quite well: "Throw out every piece of software that you currently operate that isn't made by Microsoft and exchange it for equivalent Microsoft products. After that everyting will inter-operate just fine so long as you don't stray form the yellow brick Microsoft road."
Only to idiots, are orders laws.
-- Henning von Tresckow
And that's just what they're waiting for with the EU. Or did you think Mr. Gates was hiding his money over in a huge non-profit for no reason? It protects his bank accounts, it makes a bunch of people grateful, and it gives him a great way to "hint" that Microsoft should be treated nicely to encourage support from the new Gates foundation.
That's how this game is played, folks.
Lets think about this for a moment, what is really going to happen?
How many times have we seen this kind of game from MS? Oh sure, they may actually have to pay EUR280 mil this time, but will that really hurt them, come on, the company still has BILLIONS in cash reserves.
M$ will just try and appeal or negociate to pay as little as they can, then pull it out of their cash fund or something and NOTHING WILL CHANGE.
Until the really big players start telling MS to go to hell and M$ starts getting hit HARD (billion $ fines anyone?) they will just continue as before.
I'm not going to hold my breath.