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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."
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 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]
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.
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