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Microsoft Threatens Startups Over Account Info

Posted by ScuttleMonkey on from the strong-arm-of-the-law dept.

HangingChad writes "According to Fortune, there are reports that Microsoft is trying to strong arm startups to give preferential treatment to MSN Messenger and are using account information as leverage. 'If the company wants to offer other IM services (from Yahoo, Google or AOL, say), Messenger must get top billing. And if the startup wants to offer any other IM service, it must pay Microsoft 25 cents a user per year for a site license.' Of course, if the company is willing to use Messenger exclusively 'fee will be discounted 100 percent.' Getting detailed information is difficult as many of the companies being approached are afraid of reprisals."

27 of 156 comments (clear)

  1. They are all playing the lock in game by Zeinfeld · · Score: 5, Interesting
    All the social networking companies are playing this game. The only difference is that when Microsoft points a lawyer at you, they are loaded.

    Open Identity systems such as OpenID are the way to go. But how do we break open the proprietary lock? Tim Berners-Lee told me to look at FOAF but we still need to complete the integration into the authentication systems.

    --
    Looking for an Information Security student project suggestion?
    Try http://dotcrimeManifesto.com/
    1. Re:They are all playing the lock in game by Zeinfeld · · Score: 4, Interesting
      Bad form to follow up one's post, but when I said the companies were all playing the same game, I meant the lock in game. The tactics are different but the idea is the same: the social networking company owns the contacts and the data.

      You can export your links to other people in these schemes but the inbound links point in the same place, you can take your data but not your network.

      One step forward here is that Google blogger has at last allowed people to use their own domain name with their blog. So you can move your blog to a different host if you please.

      --
      Looking for an Information Security student project suggestion?
      Try http://dotcrimeManifesto.com/
    2. Re:They are all playing the lock in game by Enlightenment · · Score: 5, Insightful

      I think this quote says quite a lot: "We want to make sure our data is kept between our users and our servers." "Our data"? Is that even a legal position to take? It's sure as hell not intuitively obvious that they should be able to consider data theirs just because they're the ones who keep track of it.

    3. Re:They are all playing the lock in game by Divebus · · Score: 4, Insightful

      Same old head crushers. Are you watching this DOJ? Oh, it's not a threat... it's a choice. An anti-competitive, locked in, service bundling, vendor threatening choice - in the name of beter "security". Puleeeez. We've seen this behavior before and I hope this blows up in their face worse than last time.

      --

      Most of the stuff on /. won't survive first contact with facts.
    4. Re:They are all playing the lock in game by jdevivre · · Score: 3, Interesting

      "Our data"? Is that even a legal position to take? You know, I was all ready to "hear hear" that sentiment, and then I thought of the Postal Service. The content of a letter is mine (keep it simple and bypass copyright, etc), but the responsibility of delivery is theirs. They can't lose it, have it stolen, altered, copied or viewed by anyone (again, simplify) without "failing" their purpose. Same goes for the IM handlers, I guess. Having control over the in- and out- points, along with the channels between is just easier to meet the responsibilities.

      So, not to defend the actions or strategies of MS, but the aspect you've focused on is at least open for discussion.
    5. Re:They are all playing the lock in game by ozmanjusri · · Score: 4, Insightful
      It's their data, we're their customers.

      We're their product.

      Marketing companies are their customers.

      --
      "I've got more toys than Teruhisa Kitahara."
  2. Heavy Foot by mfh · · Score: 5, Interesting

    Microsoft has always had a heavy foot, but waiving fees for those who cut out the competition requires another solution.

    Drop Microsoft! Just drop them. Stop using them. They are old anyway. Let's come up with something NEW!

    Backfires inc!

    --
    The dangers of knowledge trigger emotional distress in human beings.
    1. Re:Heavy Foot by Mateo_LeFou · · Score: 5, Funny

      "Drop Microsoft! Just drop them"

      You're actually suggesting there are viable substitutes for Hotmail?!@!?

      --
      My turnips listen for the soft cry of your love
    2. Re:Heavy Foot by rucs_hack · · Score: 3, Insightful

      Like it or not, they are a major IM provider.

      I'm not an MS fan, but this sort of thing does irritate me. They are *not* strongarming startups. What they are doing is trying to find ways of monetizing their services. These services are free to end users, but why should they be free for other businesses to use? I can't see why. How is it reasonable to use another companies product to make money without paying for that usage? Only if the company wants it to be used for free, and Microsoft doesn't. That's their right.

      Can these startups just avoid using the MS IM protocol? Sure, if they want to drastically reduce their customer bases. That would be unbeleivably stupid in the US.

      And besides, 25 cents per user per year? If the startup is worthy of existence, they should be able to make more than that per user per year, its a piddly amount.

    3. Re:Heavy Foot by MightyYar · · Score: 4, Insightful

      What they are doing is trying to find ways of monetizing their services. All well and good if they weren't shipping the product free with their monopoly OS. They have to play by different rules than everyone else, because no one else has a monopoly to leverage.
      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
  3. Evil is Microsoft's most important product? by Futurepower(R) · · Score: 5, Funny

    Quote from the Fortune article: "This is a great example of why Google is the leader ... and Microsoft is not..."

    Microsoft: Do evil if evil makes money? Or, Microsoft: Evil is our most important product, making money is secondary?

    1. Re:Evil is Microsoft's most important product? by gmack · · Score: 4, Informative

      Actually the quote from Ecclesiastes is "The love of money is the root of all kinds of evil." The missing word is quite significant. For some reason it's one of the most often misquoted scriptures.

  4. So, the real question by WindBourne · · Score: 4, Interesting

    why are they still playing with MS? MS will ALWAYS pull these illegal actions. All the companies have to do is quit playing in MS's back yard.

    What amazes me, is that MS does not buy companies who are on their platform. They just strongarm them and steal as be needed. Instead, they buy companies who could represent a threat to their platform or are making money hand over fist (the 2 tend to go hand in hand). So, by being in Windows, a startup not only pays much higher costs, but they also kill off a huge chunk of the market that would otherwise drive up their price, and then subject themselves to MS's hand.

    --
    I prefer the "u" in honour as it seems to be missing these days.
  5. It's security, stupid by nbauman · · Score: 4, Funny
    From TFA:

    Hall said that Microsoft's main concern, and the reason it sent out Big Foot letters in the first place, was security. Well, of course. Think of the children.
  6. Re:Why isn't IM distributed? by s4m7 · · Score: 4, Informative

    In fact, google's IM protocol is based on Jabber.

    from their about page:

    Decentralized -- the architecture of the Jabber network is similar to email; as a result, anyone can run their own Jabber server, enabling individuals and organizations to take control of their IM experience.
    --
    This comment is fully compliant with RFC 527.
  7. Anal ogy by fulldecent · · Score: 5, Funny

    A piece of software without MSN integration is like a dog without bricks tied around its neck.

    --

    -- I was raised on the command line, bitch

  8. Re:Why isn't IM distributed? by Stradenko · · Score: 4, Funny

    Thanks for describing XMPP.

  9. Re:Why isn't IM distributed? by imbaczek · · Score: 5, Informative

    that idea is so good that it's been implemented quite some time ago.

  10. What about Intellectual Property? by mangu · · Score: 5, Insightful

    "Our data"? Is that even a legal position to take? It's sure as hell not intuitively obvious that they should be able to consider data theirs just because they're the ones who keep track of it.

    An interesting position, if we the people would be allowed to claim it. Since I'm the keeper of the information in my computer, does it mean I own the intellectual property?!...


    Yes, I know, there's a difference between "data" an "information". But my list of contacts isn't something that arose spontaneously, we aren't talking about phone books here. I worked for years to meet all the people in my list. That's information that has been carefully collected and organized, it's not like taking a list of everybody who lives in a city and ordering by last name.


    That list of contacts is *MY* data, *MY* property and *I* should have the final word about it!

    1. Re:What about Intellectual Property? by Frosty+Piss · · Score: 4, Insightful

      That list of contacts is *MY* data, *MY* property and *I* should have the final word about it!
      You would think so, wouldn't you? On the other hand, I wonder what the EULA / TOS that WIM users clicked right through without reading has to say about it.

      Perhaps all your lists are belonging to them.

      --
      If you want news from today, you have to come back tomorrow.
    2. Re:What about Intellectual Property? by Pat69 · · Score: 3, Interesting

      Not when you store it on *MY* server. If you want to retain control of your data, then don't give it to me. So if I were to host web sites on your servers, you would own the content on my sites?

      Interesting...
      --
      You get what you pay for - if you're lucky.
  11. Parity Error by NullProg · · Score: 4, Insightful

    We put the question to Brian Hall, general manager for Windows Live. "We want the user to be in control of their stuff," he told me. "We believe strongly that it's the user's data, it's the user's choice."

    Oh really? What about Secure Audio Path and the other draconian DRM measures in Windows.

    Microsoft must be running for public office. Say one thing, do another.

    Enjoy,

    --
    It's just the normal noises in here.
  12. Security wasn't hardly mentioned by mgkimsal2 · · Score: 3, Insightful

    They mentioned they wanted to keep data secure, but there was no mention from anyone interviewed (anonymously), that MS was demanding a security audit of the companies' systems. That would be an interesting approach to take. You can access our data for $x/user/year, but we'll waive the fee if you submit to an audit to prove that you'll be handling the data in a secure manner. I still wouldn't agree with the practice, but it would have been a more PR-savvy move to take. "We're protecting this customer data, but still allowing the user to take their data with them, etc". During their audit, they might just happen to find that Oracle, DB2, PostgreSQL and MySQL aren't as 'secure' as MSSQL, and 'suggest' that companies use MSSQL in the mix as well for user data, but that's just a conspiracy theorist mindset at that point. :)

    --
    creation science book
  13. Re:Not really... by Zeinfeld · · Score: 5, Insightful
    It wasn't "social networking sites", but "webmail sites". And of the three big ones (Microsoft, Yahoo, and Google), only Microsoft try to use control of the mail contacts as a "leverage" for their other products.

    Acording to TFA it was the social networking sites that were trying to hook in.

    OK so you don't like Microsoft's tactics, don't get a Hotmail account. What I find rather more objectionable is the amount of social networking spam I have been getting from new social networking sites trying to gain critical mass.

    In one week I received email from three new networks trying to start up, each one was playing the 'download all the contacts and spam them' game.

    Flaming Microsoft is fun but after the first decade or so it got old. I gave that up in '98 or so. Rather more interesting is working out what we can do to change the game.

    In the dotCrime Manifesto I proposed a mashup of OpenID/SAML/WS-* on the authentication side, FOAF as contact interchange medium, DNS SRV records as the discovery mechanism. The objective being to create an identity system in which end users own and control their own data.

    Finding folk who are upset enough to flame Microsoft is rather easier than finding folk interested in writing or deploying code that might change the situation.

    --
    Looking for an Information Security student project suggestion?
    Try http://dotcrimeManifesto.com/
  14. Uh-huh... by IonOtter · · Score: 4, Informative

    I used Messenger a few times? Then I found out that my user/pass was the same for my Hotmail account, AND my Passport. I remember I was using my Passport account to purchase something, when I suddenly realized, "Hey...my credit card info is tied to my Hotmail and MSN Messenger password..."

    I promptly deleted the credit card info, changed the user info, scrambled the password by mashing the keyboard with a copy&paste and changed the email to a free Hushmail account that would go away in 30 days.

    They've since changed that practice, but MS hasn't offered me anything worthwhile to bring me back.

    --
    [End Of Line]
  15. Easy solution by Arcturax · · Score: 4, Insightful

    Make Microsoft look like assholes and make sure users know it's MS's fault.

    On your social networking/Web 2.0, 3.0, 4.0, whatever site allow users to import from AIM, YIM and Google. However for MSN, grey out the option and next to it in red put "Due to legal pressure by Microsoft, if you use MSN, you must manually import your contacts" and give a link to a tedious page that restates this reason and make them upload them one at a time.

    Naturally users are going to be rather upset at MS and wonder if maybe they should switch to AIM instead.

    --

    --Won't that be grand? Computers and the programs will start thinking and the people will stop. - Dr. Walter Gibbs
  16. Some thoughts by PPH · · Score: 3, Insightful
    I'm not a lawyer, but it seems to me that any contract terms that offer a discount for 100% of someone's business is restraint of trade and runs afoul of the Sherman Antitrust Act. Volume discounts are OK, based upon some threshold quantities. But 100% is simply a test for the exclusion of other suppliers.


    I'm not an economist, but placing barriers on the export of contact information from Hotmail reduces the value of the Hotmail service. If the cost to move a particular piece of data from within one system to any other is higher than moving it in the other direction, its value inside that high cost system is lower by that amount.

    --
    Have gnu, will travel.