Microsoft Loses EU Anti-Trust Appeal

Kugrian writes "Microsoft has lost its appeal against a record 497m euro (£343m; $690m) fine imposed by the European Commission in a long-running competition dispute. The European Court of First Instance upheld the ruling that Microsoft had abused its dominant market position."

Comments

This isn't justice: too little, too late

[jafoc]

While the Free Software Foundation Europe (FSFE) which fought for this long and hard can justifiedly rejoice (FSFE press release), overall, I'm still very unhappy about the state of antitrust "justice".

The biggest problem is that it took 10 years to get to this point, and Microsoft still hasn't disclosed the specs for how to make interoperable products. We're fortunate that the Free Software way of doing things is rebost enough to survive in spite of this, but profit-oriented companies simply can't hold out long enough for this kind of legal system to really help.

What we need is clear legal rules that vendors with dominant market positions must adhere to genuinely open standards for all protocols and document formats, and of course we also need a genuinely non-corrupt standardization organization Microsoft doesn't sell us something as an "open standard" which really isn't.

Re:This isn't justice: too little, too late

[gravos]

Good points all around.

Though I do wonder what level of fine it would take for Microsoft to really change it's way of doing things instead of just making whatever paltry change the regulatory body required (like selling a version of Windows that probably no one is going to buy without IE bundled in).

I wonder because even after some pretty hefty fines in the past they seem to have changed direction very little as a company.

Re:This isn't justice: too little, too late

[jkrise]

The problem with this idea for policy is defining the point at which a company becomes dominant and what happens if they get there with closed proprietary systems that are not anti-competitive in nature when they are created...

There is no problem even in that case. There are close to a billion computers right now; and Microsoft software runs on well over 80% of them all. So what if they weren't a monopoly 20 years ago? The protocols in use RIGHT NOW must be open for public access.

By any yardstick, it is very clear that Microsoft IS A MONOPLY in the massive worlwide PC market.

Re:This isn't justice: too little, too late

[imr]

By any yardstick, it is very clear that Microsoft IS A MONOPLY in the massive worlwide PC market.
It is also clear that they maintain their monopoly by abusive practices and that the US government doesn't do anything to fix this. See the outcome of the microsoft US trial.
So it's now clear that microsoft is used as a leverage by the us government and other governments have to step in and protect themselves. Which is happening.

Re:This isn't justice: too little, too late

[Tom]

Though I do wonder what level of fine it would take for Microsoft to really change it's way of doing things 50% of their cash, with a promise that you take the other half if they don't shape up by the deadline.

Unfortunately, you can't do that anymore. Liberals may not win any elections, but they sure won one part of the "small, powerless government" agenda, and it ain't the "small" one. There's very little a government can do nowadays about large corporations. The problem, as others have pointed out, is that the justice system just takes too damn long. If a corporation can afford the fine, it can afford to simply wait out, because by the time the judgement comes down, it'll be mostly meaningless.

So fines don't cut it, unless you go to extremes like in my first sentence.

You need something equivalent to what we consider totally normal if the criminal is an individual: Lock him up during the trial, so he can't kill/rape/rob someone else in the meantime.

If MS were in danger of being shut down until the case is closed, I'm pretty sure they would be much more enthusiastic of following what's essentially their probation conditions.

Re:This isn't justice: too little, too late

[Chandon Seldon]

As a test, I just tried to beat this pc to death by multitasking the following: excel 2003, excel 2007, word 2003, word 2007, access 2003, access 2007, publisher 2003, publisher 2007, visual studio 2003, visual studio 2005, windows media player 11 (playing an mp3 with visualization running, coldfusion studio, firefox, ie7, opera, photoshop 7, thunderbird, and last but not least, Taskman.exe.

Wait a second. You're telling me that your OS can handle 17 idle processes and one active one when they all fit in RAM? That's amazing. Or at least it would have been in 1972...

Least important part of the judgement...

[Anonymous Coward]

...given the size of MS coffers.

Of more significance is the fact that MS will be forced to release more code to allow competitors to compete on a level playing field with MS applications...

Microsoft lost its appeal?

[petercruickshank]

I think Microsoft lost its appeal a long time ago...

Go Samba

[Marcion]

The Court of First Instance's judgement, like the commission's before it, sees Samba as the means for competition, in the Work group server space (i.e. file servers, print servers, etc). All potential competitors to Microsoft are using Samba, (the commissions own research found that 98% of competing products in this space use Samba), so it is good that the commission and the CFI are keen to get the documentation from Microsoft in a form that open source projects such as samba can use.

P.S. Shamless plug, I ranted a lot about this on my own site

Court's press realease

[zombie_monkey]

http://curia.europa.eu/en/actu/communiques/cp07/aff/cp070063en.pdf

They have not yet paid another fine that was imposed on them for not paying this fine, as the BBC article mentions, although in no great depth:

Last year, Microsoft was told to pay daily fines adding up to 280.5 million euros over a six-month period, after it failed to adhere to the 2004 decision. http://news.bbc.co.uk/2/hi/business/4552214.stm - another BBC piece specifically about the daily fines. Does anyone know if they've paid them or not by now?

It's not about fines, it's about Samba and freesw

[H4x0r Jim Duggan]

Ignore the fines, they're nothing.

The important thing is that when MS eventually publish their specs, they will not be allowed exclude free software from using them.

This is what FSFE and Samba have been working for since 2001, not fines.

http://fsfeurope.org/projects/ms-vs-eu/

Re:A Pittance of a Fine.....

[zebslash]

The problem for them is not the fine, but instead, from now on, the compliance to the ruling, which will lead them to change the content of Windows software, the parts they will be able to install on new computers. That's a lot more important than money.
Don't forget the ruling is 152-page long, and therefore, they will have to digest and comply with all the court orders to avoid paying even more fine. That may be difficult for them in a market that becomes more competitive.

Re:Please queue the anti EU replies here

[Corporate Troll]

Won't queue anything here. Anyone who knows a bit about the EU, know that this is bollocks. They go after anyone abusing the market. As Volkswagen, for example... Not a US company at all...

Re:Quel surprise!

[Bogtha]

Surprise surprise, a European court decided to rob an American company of half a billion dollars

Surprise surprise, a European court punished a company for breaking the law. Don't blame the EU for not slapping them on the wrist like the USA did. Perhaps if the USA enforced its own laws properly then it wouldn't have been necessary for the EU to pursue this case.

Re:Damages, but sanctions?

[sepluv]

The fines will increase (exponentially I believe) until they pay. The court can freeze and seize their European assets and they have much of their money within the EU in Ireland as a US tax dodge. Also, the EU is by far MS's largest market. Not complying would be a BAD idea.

BTW, the legal detail is over at Groklaw (basically the court sided with the EC except a minor point about the EC giving too much power to the MS appointed monitoring trustee) and there is a joint FSFE/Samba press release. Also, the the court published the full judgement and other court docs.

Re:legislating market share?

[Marcion]

It a mainstay of classic economic thought that competition is good and monopolies are bad, the classical definition of monopoly was actually 25%. The problem with having companies have more than that is that they start to wield control over the rest, their size allows them to game access to customers and suppliers.

You argument seems to stem from the misbelief that Operating System software is a competitive market and that Microsoft got to 90% by competing fairly. If so then you would be very wrong.

If you read today's judgement, you will see that Microsoft has regularly abused its' position by bundling, threats, bribes, agreements with OEMs and so on.

Operating Systems is not a competitive market at all, if you use Linux then you will know that the biggest problem is not Windows itself but the fact that it is so dominant. As soon as you use Linux you find that shops, ISPs, firms, manufacturers and so on treat you as a second class citizen. This needs to be broken for the social good.

I still don't like it.

[140Mandak262Jamuna]

Big as it is, 600 m$ is chump change for MSFT and it would shrug and treat it as cost of doing business. Further this creates a "rally around our flag" effect kind of support of MSFT. Many Americans would go, "The damned Europeans, the gall they have punishing a Red White an Blue company.." .

What I would really like to see is that the customers of MSFT see that it is in their best interest in having an alternative to MSFT in the desktop, server, office documentation products arena that will benefit by perfect 100% compatible interoperability. No customer would buy a Samsung TV that can play only Samsung DVD player. But why these corporations don't demand such compatibility?

One answer is that, MSFT tax is not very big. Just 40 billion dollars a year max. For most companies, payroll, medical insurance, office rent, furniture, liability insurance, transportation, travel etc cost more than office PC/laptop. So they are not looking for savings here.

Second, companies only focus on the differentials with their competitor. Stated differently, Coke does not care how much it spends on pc/laptops and office software as long as its competitor, Pepsi, is not spending a significantly lower amount on the same category. This explains the herd like behavior of the corporations. No body looked to outsource to India till about year 2000. One did. Showed some possible cost savings. Whether or not the savings were real, that first company's investment in India is real. Suddenly every suit is asking, "what if it pays off big time for them? What if we get left behind. Let us play it safe, hedge our bets and let us also have a presence in India."

I don't know when it will happen. But at some point some big company would make it a priority to have a second vendor in the office software arena, and invest a sum to show it is serious. Like a herd every suit who was asking, "What is our India strategy?" would be asking "What is our second vendor for office strategy?". Of course, not without some serious kicking and screaming and "Total cost of ownership" studies funded by MSFT. But when the corporate pendulum swings, it swings inexorably and usually it will go well past what is reasonable reach the other irrational extreme, corporations investing so much on "second vendor" strategy that the saving don't justify the investment. But that won't deter these suits, It never has.

Re:who cares..,

[headkase]

As for a CD player "bundled" with a car, CD's follow an ISO standard so with all manufacturers following a standard the consumer is completely free to replace the player with another from a different supplier. This means that competition is unhindered so the market can work as intended - the case of providing a CD player with a car is a matter of convenience for the customer not an anticompetitive act.

It's ironic choice of car analogy

[EMB Numbers]

It's ironic that you chose your particular car analogy, because there was a famous USA court ruling that car manufactures could not artificially restrict the ability of third parties to install car radios not supplied by the car manufacturer. USA auto manufacturers tried to force customers to buy radios exclusively from the car manufacturer by using non-standard electrical connections and deliberately restrictive physical constraints. Then the car manufacturers claimed that their physical constraints and connector designs were protected intellectual property.

The fight continues to this day: See the "Right to Repair" act. http://www.aftermarket.org/Government/Government.asp