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EU Fines Microsoft $1.3 Billion
jd writes "The EU has slammed Microsoft with a fine of €899 million ($1.337 billion at current exchange rates) for perpetuating violations of the 2004 antitrust ruling.The fine is the sum of daily fines running from June 21, 2006 to October 21, 2007. It is the first company ever to be fined for non-compliance. The amazing thing is that the EU now expects Microsoft to comply and 'close a dark chapter' in their history. The EU has opened new investigations into Microsoft's practices and gave a lukewarm response to the company's turning over yet another new leaf last week."
I'm no Microsoft fan, but I have to admit that I don't see what's wrong with shipping a media player with your OS. Surely that's just adding useful functionality?
Apple ships with iTunes, and most Linux distros include a media player.
Is the point here to do with creating a monopoly on online music purchasing? Because despite shipping WMP with Windows, iTunes has still taken the market.
Dan
They will likely be paying the fee in Euros. So how and when they 'convert' their money from USD to EUR is pretty much their concern. Maybe the money even comes from the European branch entirely? The way the Dollar is acting currently it looks like they'd rather do it sooner than later.
Also as was pointed out above: the value of the Dollar in regards to the Euro changes (at least) on a daily basis. So there's no single 'proper' dollar value for the fee, they just have to pay the 899m Euros.
MS: 3.87%?
EU: Lower
MS: 2.98%?
EU: Lower
MS: 0.5%?
EU: Lower
MS: 0.4%?
EU: BZZT! Too late, we are going to fine you a Billion $s.
Porcine-mounted aviatrices with huge breasts just flew past my window!!
I'm absolutely stunned that someone, some government, finally got up the nuts to face off with the Monopoly. Took 10 years to get done, but FINALLY!! Think we'll see some big changes at Microsoft soon? Watch carefully. The fireworks are about to start.
Probably a terrible precendent, actually. Imagine some off-brand European retailer selling 'Windows XP' that they've compiled and pressed to disk. People would think they're getting A Microsoft Product but actually its someone else who made it. Then Microsoft's reputation would be tarnished if the copy is bad.
If I built soapbox racers in my garage at home and branded them BMW, then someone lost a head in a collision in my not-quite-safe car, don't you think that BMW would be less than thrilled?
Reason, free market capitalism, and individualism
What's 1.3 billion to Microsoft? They threw a cool billion away because they couldn't be bothered doing proper quality control for the 360 and they threw away 4 billion on the original Xbox. Lord knows how much more they've thrown away. They probably burn $100 bills for fun.
The only punishments that would hurt Microsoft have been illegal since the Dark Ages.
"by that I mean people who don't sit on slashdot all day wondering why everyone else isn't building robots" DECS
...to see what the reaction would be if Microsoft indicated that it was simply not going to pay the fines. They could go further and say that attempts to force payment would result in an amount equal to the fines going to pay for moving part of their European workforce to a non-European location. Oh - and those Server 2008 licenses needed to run the European government computing facilities? Not for sale, and by the way, all other support and licensing contracts will not be renewed after they expire.
I would be very interested to see what would happen if a tech giant decided to play hardball with a government. After all, the Microsoft decision makers that count would be beyond the reach of the European authorities in terms of arrest and imprisonment.
There's more than Linux out there to put on desktops. eComStation, Mac OSX, Solaris, etc.
Games and greeting card software are the only place users would be hurting for support, and those are probably represented OK on the Mac.
I'm fond of .net too. Mainly because it is a decent wrapper for all the Win32 API stuff (quick: How many string types are there in Windows?), plus a decent wrapper for the crawling horror that is COM. I once had to write software that interfaced with the COM MAPI. Now that's all wrapped up in .net.
Best Slashdot Co
There is evidence the money would have to come out of the European operations. :)
Last week one of their managers said in an interview that the cost of the EU-required documentation had wiped out most income of the past year.
And now the EU does not accept this documentation
Or more accurate, does not accept the price attached to it.
"The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
Not really... Not to stock holders.
MS's stock price is down and going lower. MS's cash equivalents on hand have drop from a high of over $50 billion to near $20 billion. MS is plowing billions of dollars a year into product areas such as the X box and their online business that are losing billions of dollars every year. Having to pay a fine of $1.3 billion costs them about 7% of their cash on hand. That is $1.3 dollars that they can't spend on developing new markets, it is #1.3 billion they can't ever hope to use to create stock holder value. This is a big enough fine to cause MS's board of directors and MS's executives to be sued by the stock holders and removed from their offices.
This kind of a fine, especially if it is followed up by stock holder suits can lead to a drop in the stock price that will cost Gates and crew billions of dollars off of their personal net value, force to company to pay the stock holders an equivalent amount of money, and force major changes in the board of directors.
This fine is a big deal.
Microsoft may well be heading into a perfect storm of legal shit.
And, do not forget that the only reason they got a slap on the wrist in the US is because MS spent lots of money on the Bushies and their corporate dogs. The Bushies and the whole neocon (neofascist) crew are not going to be in office in January 2009. The political storm sweeping the US right now is like nothing I have ever seen before. And I lived through most of the 1950s and 1960s.
MS is in trouble.
Oh... for those with no perspective, this is a story that is going to play out over the next 10 years, not the next 10 months.
Stonewolf
Because the European Union is a progressive liberal democracy, she is allowed to have more balls than her US opposite number.
Microsoft needs to get a move on. The fine is in Euros, and if the Euro continues to appreciate against the dollar when they eventually pay it may bankrupt them. (this is a joke. It is a feeble joke but a joke nonetheless.)
Incidentally, and this is quite true, one of the lawyers for Microsoft summarised their case like this: "We are Microsoft. We are the good guys. So what we want to do is right." Now compare that with HP, who have people based in Europe who talk to the Commission and say, in effect "We would like to do so-and-so. Is that all right?". Strangely, you don't hear about massive fines for HP over their dominance of the office printer market.
It has been clear to me for a number of years that Microsoft simply needs to grow up as a company, like small children who, if their parents do a half decent job, learn to get what they want by politeness and cooperation, not by kicking, screaming and stealing toys. But, in order to change, they have to recognise the need for change. I suspect that their technical people are well aware of this, but some of the management is still in "if it ain't broke don't fix it" mode. The MS XML saga is pretty conclusive evidence of this. I bet there are project managers in ISO who by now will do their best to sabotage any Microsoft standards project, simply because they have been so pissed off by them.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
This judgement seems pretty final (MS has been showing contempt for the court for years) so, to answer the question, I'm guessing if MS don't pay up now, the EC will just freeze their EU bank accounts, and rumour has it that Microsoft keeps most of its money in Ireland as a tax dodge. I guess they could raid their offices and take away their furniture (or what's left since Ballmer's last European trip) too, but that would be messy and not too cost effective—I'm sure MS has billions in the bank.
Joe Llywelyn Griffith Blakesley
[This post is in the public domain (copyright-free) unless otherwise stated]
It is the first time a company don't respect the orders of this institution (which only has 50 years of age) and this is the biggest fine it ever produced. Nobody knows what would happen if Microsoft was planning not paying but I guess it could be raided by European IRS. I mean it is tax money. Many people who lack a sense of humor are serious about it.
A ban would be a first as well but I think they'll just keep on doubling the fine every year...
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.
If you have a large CD collection, you aren't stuck to one make of CD player. You can buy a Philips or a Sony or a Panasonic or a Daewoo or any number of no-name brands. Your investment in CDs is protected by there being more than one manufacturer of CD players. They all take the same discs, they all run from the same power supply, they all have the same analogue outputs. The only thing on which they compete is merit.
But if you have a large collection of saved Microsoft Office documents, the situation is a little different. You can't get a perfect drop-in replacement for MS Office precisely because Microsoft are withholding details of file formats and protocols. Therefore, Microsoft customers are forced to keep paying licence fees to Microsoft just to keep the ability to access their old saved documents.
Some third-party office suite could cane Microsoft on every other feature going (and indeed, the latest KOffice does); but it could never gain serious consideration as a replacement for MS, as long as it lacked the ability to import old documents saved by Microsoft Office. (The possible exception would be in the case of a brand-new company setting up shop from nowhere, with absolutely no legacy documents whatsoever and enough clout to persuade customers not to e-mail them
Anyway, it's not the 1980s anymore
Je fume. Tu fumes. Nous fûmes!
Not really. I was listening to an economist from the UK, and he stated that the Euro was somewhat overvalued to the dollar. He and others see an adjustment coming down the pike in late '09 to early '10 when Europe catches up with our credit crunch.
Like it or not, for better or worse the US is the trend setter and the EU is the laggard by 4-12 quarters.
There have been incidents of outright corruption, true. But if Microsoft started passing cash in brown paper envelopes they'd be in real trouble.
What Europe doesn't have is the legal "corruption" of corporations financing politicians campaigns' in exchange for favours - which is what grandparent was alluding to I think, and the primary reason Microsoft doesn't have the sort of influence it does in the US.
This sig all sigs devours
And just in case somebody would mistakenly believe that 'not paying' would be an option to Microsoft - no it is not, any more than ignoring government orders in USA. They can still appeal them in EU courts, but if the courts agree with Commission then it is final - and as it turns out you have pay the fines while waiting the final resolution:
From Microsoft's 10-K filing:
In March 2004, the European Commission issued a decision in its competition law investigation of us. The Commission concluded that we infringed European competition law by refusing to license to our competitors certain protocol technology in the Windows server operating systems and by including streaming media playback features in Windows desktop operating systems. The Commission ordered us to license the protocol technology to our competitors and to develop and make available a version of the Windows desktop operating system that does not include specified media playback software. The Commission also fined us 497 million ($605 million). We appealed the decision to the Court of First Instance. In July 2006, the European Commission determined that we had not complied with the technical documentation requirements of the 2004 Decision, and fined us 281 million ($351 million). We have appealed this fine to the Court of First Instance. We have expensed and paid both fines, pending resolution of the appeals.
"You know, there are real dictators in the world, who are truly evil, and are working to oppress their people."
The removal of powers from elected parliaments, by devious method, to an unelected and undemocratic executive, Council of ministers, which holds its meetings in secret, unelected commissioners, and a very weak parliament that is bought and paid for by the latter.
"You won't find them in Europe though, no matter what your libertarian fantasies tell you"
Yes, Europe has a fine tradition historically to be able to ignore history and repeat past mistakes yet again. Europe's ability for arrogance is only matched by its fantastic ability for creating evil, two world wars, and hundreds of millions of dead. How could I possibly not trust a European elite running out of control, and with a massive cavern where democratic due process should exist, but doesn't.
This same EU that's failed 13 years of account audits?
Do you have a good reason for handing 899 Million to people who can't even count? No, didn't think so.
We`re all equal
Here in Europe, there is no tyrant, no Bush, no god.
But we got Law.
Ain't we proud we have it !