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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.
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.
If you were Microsoft, and you tried that, you might see your copyrights voided in Europe. Oops.
If you were Microsoft ... you'd be stupid.
Wow, I'm trying to think of a better way to make a continent that's already antagonistic towards you migrate even faster to other alternatives like Linux. I can't do it. You're going to threaten to pull out of a multi-BILLION dollar market over some fines, alienating your customers and moving them to consider non-Microsoft solutions.
No, the good idea for Microsoft is to publicly bluster and privately strike a deal with the EU to come into compliance and pay a reduced fine. Microsoft essentially made a gamble and lost and will now minimize its losses.
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.
Some idiot suggests this every time this case is mentioned. No matter how big a company you are, you can't fuck with sovereign governements. They can unilaterally write their own contracts, and enforce them with the full power of the state (i.e., all the way to lethal force). If they want MS software, they can take it and pay whatever they like.
In any case, they could use existing software indefinitely, while assessing the several alternatives begging for a chance to take the market. And that would be the end of MS's monopoly everywhere.
i see government trying to foster competition in the market. what do you see that i don't?
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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.
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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.
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
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who is getting all this money
The EU, of course.
and what are they gonna do with it?
Hookers and beer, just like always.
The more important question is where is the money going to come from?
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KFG
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.
And MS WILL find a way to recoup the money from ALL of us, their customers. ...unless we decide not to be their customers anymore.
And exactly what's in it for "us", their customers? We get to pay a little more to cover Microsofts illegal activities? That's hardly a "critical feature" worth a premium to me.
1) This is bad press for Microsoft. Shareholders KNOW the price of products will have to go up to cover this, and they won't see any return on that increase. Prices and sales will have to rise much higher than otherwise for them to see a return. Companies KNOW they will ultimately pay the price for this, and they have better things to do with their money than pay higher prices to pay microsofts fines.
2) As the price goes up customers get more annoyed, their is no value increase, and microsoft doesn't even see a profit from it. (Even if microsoft does bundle new features in with the price increase, the value increase will still be diluted.)
3) If customers are sufficiently annoyed they will look to alternatives, and reduce their commitment to microsoft.
4) Meanwhile, competition is given a bit of a wedge. The tremendous advantage Microsoft has thanks to its entrenched monopoly is countered slightly by the burden the fines place on the company. When bidding against a microsoft burdened by heavy fines, the competition stands to profit more on any deal at a given price (or break even when microsoft would lose money, etc...) It doesn't level the playing field by any means, but its slightly more level than it was.
'' ...Yes, if I were Microsoft, I'd simply have a so called "news leak" to the press suggeting that we, as Microsoft, are considering withdrawing our offending products from the European Union market. This would allow us "test" the waters and make EU officials think twice about their actions.
How about that? ''
Excellent idea. The next time some government agency in Europe has to decide whether to use open source software or Microsoft software, we can just point out that Microsoft is considering withdrawing their products from Europe, so clearly Microsoft software has to be avoided at all cost to be future proof.
Oh, now it's the politicians' fault MS is breaking the law.
Let's say you are an MS shareholder. A company you hold stock in breaks the law, but, unconcerned, you keep your shares. After years of open non-compliance they finally get fined, a decision which was seen coming from a mi- um, kilometre away. Yet you still don't see how you have any choice or responsibility for your losses? GMAFB.
1) Consumers can choose not to buy MS products.
2) Businesses can choose not to use them.
3) Powerful shareholders can influence the board to do the right thing
4) Powerless shareholders can divest their MS stock for a company that doesn't flaut the law.
And to top it off, MS stock hasn't been doing well anyway for the past few years. Probably because major funds have already discounted the value of the long-anticipated decision in their calculations.
So bottom line, you get no sympathy.
There are two kinds of people: 1) those who start arrays with one and 1) those who start them with zero.
The fine is around 2 million euros PER DAY, not a fixed amount. Dating from the original ruling.
It's also a punishment. Even if they turn round now and obey their instructions, they will still have to repay the fine. If they don't obey the law, they will not suffer just this small daily fine but will likely have further punishments.
It's not a "Pay this amount and we'll leave you alone" deal, it's "Pay this, AND fix stuff, or we'll make you pay even more".
From the FAQ:
Where does the money go?
The penalty payment is paid into the EU Budget. It does not increase the Budget, but reduces the contribution from Member States. The fines therefore reduce the overall tax burden on individuals.
I hope it's in the form of a coupon for 15% off the upgrade to the next version of the fine.
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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.