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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."
That's 1.337.
Ryan - http://www.thecosmotron.com/
I wonder what happens if MS ignores that order as well... They won't be able to ban Microsoft products, I guess.
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
From a BBC News article on this: (http://news.bbc.co.uk/1/hi/business/6998490.stm) "Meanwhile, in the world of servers the fight is still on, with a new kid on the block - the open-source Linux operating system - making as strong gains in the market as Microsoft." (bold mine) I mean really.. new kid on the block? who is writing these?
I'm a .NET dev, and rather fond of the platform... don't groan too loudly... but even I think this is a good move. I'm glad to see the EU actually prepared to hold large corporations accountable to the law. A pet hate of mine is a legal system that will sanction heavily a private citizen for minor crimes but effectively tut disaprovingly when a large company dumps waste in a river.
Now, I'd like to see the EU start to use the same stick on large companies that also feel that they are above the law.
It's amazing some people find this sum high.
It just like EU told MS that they can continue infringe on laws as long as they give them about 10% of their benefits.
If EU wants MS to comply fast, they just have to make a ban on MS products in Europe, so that selling MS products would be considered illegal and fined enough.
I gave up with the idea of an useful sig...
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.
As I understand it, fines issued by the EU go to EU member states.
I also don't understand why the size of the fine "clearly" indicates that people are lining their pockets. This is not the largest fine ever issued. (ExxonMobil was fined $5 Billion for Exxon Valdez, later halved, but so far not paid.)
Well the thing is that is the EU that determines what your rights are in the EU, so if they believe you have to make you software compatible to make business in the EU, either you obey or you make business somewhere else.
Dear
I'd prefer to have seen Microsoft go the way of Standard Oil or "Ma Bell". The problem was, I don't think anyone in the courts at the time really understood the issue.
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.
There's no problem with shipping a media player with your OS. There is a problem with shipping just your media player with your OS. It's using a monopoly in one market to gain a monopoly in another, which is not allowed.
Repeat after me,
"You are not allowed to use a monopoly in one area to try and leverage an advantage in another area."
That is why different rules apply to Apple and various X/GNU/Linux distributors as apply to Microsoft.
Microsoft has an effective monopoly in the desktop OS market, and by bundling Windows Media Player (and MSIE for that matter...), they are creating a situation where people might use it to create WMP files (especially as that is the default).
You might say that it isn't a big deal if people rip CDs to WMP, but then they want to play them on a portable media player, they have to make sure that it plays them. The company that makes the media player is giving a kick-back (patent licencing?) to Microsoft, and thus Microsoft is leveraging its monopoly in the desktop OS to give it an advantage in another market.
That is just one example of why they shouldn't be allowed to do it, but there are plenty of others.
I wank in the shower.
You seem unclear on the concept of "rights". A "right" is something that a government has decided you may do. This government has decided that they do not have this "right". You can't wave a magic BS stick in the air and make it so that they do. They don't have the right because the EU government bloody well says they don't, and that's all there is to it.
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.
1.337 billion just can't be a coincidence.
...
It's clear evidence the EU lawyers are leet and MS is suxxxorz who got pwned. I can see the court transcript:
EU Lawyers: We get signal
MS Lawyers: What!
EU Lawyers: Main screen turn on
MS Lawyers: It's you!!
EU Lawyers: How are you gentlemen!!
EU Lawyers: All your base are belong to us!!
MS Lawyers:
EU Lawyers: 1.337 billion Profit!
Now that's great justice!
please please pleeeeeaase... take windows away from those bad europeans! give them a lesson! pleeeeeease.
Dear
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."
Indeed. The fine is a percentage of the turnover of the company in question (small companies get relatively small fines, large companies relatively large - hence the size of the MS fine). It flows into the EU budget, which is also composed of contributions by EU member states. So basically, the fine adds 899 billion euros to the balance, which means that the member states need to pay less.
MS would probably want to pay up quick, before the dollar devalues even further...
It seems that America is losing its ethical way. For the most part, our government's "hands off" approach to regulating businesses and enforcing the law with respect to corporations is coming at a huge cost to the average American citizen.
Europe and the "nation-state" of California may be our only hope of leveling the playing field with regard to how corporations do business.
We, as a nation, need to demand that our elected leaders start regulating these companies for the good of the country and the planet. It should not be wrong to force telecom companies to open their networks to competition, or to require stricter air quality and fuel economy from the energy and transportation sectors of our economy. How about regulating banks and credit institutions with regard to credit risk? Then punishing banks that make stupid decisions - and then sell those stupid decisions to other investors.
To those that say that more Government will only screw things up: Look around you. Corporations left to their own devices have screwed things up royally in the last 8 years.
Football games have referees for a reason - the same reason that businesses need government regulation. You can not have a level playing field without government regulation.
-ted
From the EU website:
The penalty payment is paid into the EU Budget. It does not increase the budget, but reduces the contribution from Member States and so from taxpayers.
So in deference to us paying the Microsoft tax Microsoft is paying (a small part of) EU tax, brilliant
"The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
You're an idiot, how is Microsoft going to justify that sort of action to it's shareholders ?
"Well we were fined for breaking the law and rather than stop breaking the law and paying the fine we decided to get revenge by flushing trillions of dollars worth of sales down the toilet and antagonise nearly all of what would have been a huge and profitable market for us."
I believe there was a plan at one point to split them in three (Legal, Marketing and Sales AFAIR). But the new regime changed the DoJ's mind.
"Linux is for noobs"-The new MS fud strategy
Microsoft's net income was around $14 billion in 2007. Over fifteen months, this charge is only 7.6% of that. It's only around 2% of their gross revenue. It's basically just a little extra tax, from MS's perspective. No mistake, it's still a lot of money, but I wouldn't be surprised if they paid it happily and kept their little monopoly.
You mean waterboarding?
--- guns don't kill people, people with guns kill people ---
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."
It does to me. A competitive market means that I, as a small business owner, can infact start a new enterprise with less concern that some monolithic relic of 30 years ago long past it's development prime can use it's monopoly to squish my innovations.
Karma Whoring for Fun and Profit.
I dont read
Is Apple a convicted monopolist ?
No, they're not are they but Microsoft is and that is what makes the situations different.
This is the most appropriate punishment because it is MS's anti-competitive behavior that would ultimately lead to them being barred from competing in the marketplace. It's not like people wouldn't be able to buy Macs or install Linux for their OS or use Open office/other alternatives for productivity.
Heck it might actually do the industry some good, nothing breeds innovation like necessity.
Collector's Edition
I expect posts like this on digg where the average age appears to be ten, but your post is infantile. As mentioned here just above your own post are a small sample of the numerous companies that the EU has fined. The only difference is Microsoft disobeyed the EU after being fined. Hence this further fine.
Frankly, the EU doles out fines to any companies who disobey European laws. Microsoft broke the law they got fined, they ignored the findings/requirements of the remedy they got fined again. There isn't any evil European persecution of an American company going on here. Just a company being fined for breaking the law.
Why was above comment modded flamebait? Here's a graph of the value of the dollar in euros. Looks like it's dropping to me. http://finance.yahoo.com/q/bc?s=USDEUR=X&t=5y.
I think it would severely hurt industry across the EU if the sale of Microsoft products were banned, especially since the EU has to deal with the rest of the world who for the most part use Microsoft products. It's just not possible for free/open source software to inter-operate effectively with Microsoft products at the moment, which was kind of the whole point of the anti-trust ruling.
MSFT has complied with that part of the order. It took MSFT 3 years to comply with other parts Like licensing CIFS/SMB to third parties without the cost overhead. That is how SAMBA got the file formats.
Because MSFT dragged their feet in complying they were fined some 2 million euros a day. This is that fine. this has nothing to do with windows media player as MSFT already took care of that part by releasing a media player free version of windows.
Also as a side effect this is 1.3 billion less dollars that MSFT will have to buy Yahoo with. Some 6% of the cash MSFT has on hand.
i thought once I was found, but it was only a dream.
There was a time when parking fines in London were less than the cost of an all-day parking space. Predictably people parked wherever they liked. The solution was much stiffer fines, wheel clamping and the ability to tow cars away and impound them.
The same thing is happening here, complying would cost more than the fine. We need some equivalent of "wheel clamping" for Microsoft.
I wouldn't count on it happening though, I can see states getting used to a regular "microsoft fine" dividend. They will probably have a routine of Microsoft saying it will clean up, not doing so and being fined again.
Microsoft's response: "Just put it on our tab!"
Office would be slightly less of an issue for the folks that just use Word and Excel, as they could probably get used to OpenOffice or similar. Not sure if there's an alternative for Microsoft Project and some of the other lesser used applications. There are also plenty of folks here using XML based workflows in Infopath/Sharepoint for business process type stuff, which would probably require a lot of effort to rework with non-MS products.
Even if there are alternatives out there for all of these Microsoft products, the cost to industry of migrating would likely be huge if the sale of Microsoft products (soft licences for the most part I guess) were banned. It wouldn't have to happen immediately, as I imagine the likes of Dell etc. have got a stockpile of Microsoft licences, and many businesses would be on corporate licences that wouldn't run out straight away, but most businesses, especially in the SMB space, wouldn't have a clue where to start.
Microsoft Reduces its Offer for Yahoo! by USD 1.3 Billion - now extending a hostile offer for only 43.3 billion dollars.
Problem? Solved.
"Flyin' in just a sweet place,
Never been known to fail..."
Whatever Mr. Tinfoil Hat. "Oh Noes, teh big bad gubamint is gonnas taks all my monies. Dey is teh DICTATOR!" You know, there are real dictators in the world, who are truly evil, and are working to oppress their people. You won't find them in Europe though, no matter what your libertarian fantasies tell you. By comparing the government of the EU to real dictators, you are pissing in the eye sockets of all the people those real dictators have tortured and murdered.
Try finding a way to voice your concerns without resorting to hyperbole. We're all pretty smart here, you don't need to make a bigger case than you've actually got for us to 'get it.'
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
In essence, Microsoft is gaming the system, breaking the free market.
There's a point of view that what Microsoft is doing is completely rational, and that the problem isn't what MS is doing, but that their competitors *don't* do those things, and instead naively try to compete on technical quality and consumer appeal. While I disagree with this point of view, there's one aspect I can agree with, which is that MS is acting rationally. What the EU is doing (or should be doing) is imposing such extreme restrictions and/or fines on MS that it is no longer rational for them to abuse their position the way they do.
That's why the answer to: isn't 1.4bn rather excessive Is no. In fact, it may by too low, if it's insufficient to get MS to change their ways.
Flamebait, but I'll bite.
First, the US Department of Justice decided Microsoft was a monopoly, so the European Union could very well take this for granted (the supervision for Microsoft as an monopoly is still active, with a recent two years added span).
Second, while the EU might fund Airbus, Boeing is an equal competitor to Airbus (at about equal size). Microsoft doesn't have competition of similar size - not even in a tenth of their size.
If an european citizen would be fined for parking in New York, those money would go toward reducing the taxes paid by the US citizens, increasing their capacity to compete against the Europeans.
I think the americans lost the stomach for competing against Microsoft in its main area of expertise: Novell Netware is just a shadow of its former past (and Windows networks dethroned it), I haven't heard lately news about Word Perfect (once leader of the word processing world), Netscape (once leader of web browser world), let's not even talk about Winsock Trumpet. I even remember a Corel Linux (rumours say Microsoft paid them out of the idea).
Microsoft's idea of "laissez faire" competition is to be alone in the world, and had taken steps for this (why buy now OS/2 when you can wait one year for our new Windows Chicago). For better or worse, OS/2 - once a competitor of Windows - is out of the marketplace for good.
You can't have free trade when a single corporation owns the marketplace. That is why the EU stepped in, to preserve "free trade" ensuring there IS competition.
The EU is not an evil government and Microsoft is not a defenseless do-gooder. This is not the first time MS has been in trouble because of its business practices, althought in the US, since Bush came to power, they've sure enjoyed a nice ride over there, haven't they?
What the hell does "the success of OS X and Firefox, and RealPlayer and Quicktime" have to do with the price Microsoft charge for interface documentation for workgroup servers? That is what Microsoft have been fined for - failure to comply with the 2004 judgment, which "required Microsoft to disclose interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers at a reasonable price".
Chernobyl 'not a wildlife haven' - BBC News
Except, no, it doesn't. Generally, people externalize their own belief system. Thus, corrupt people expect corruption. People who habitually question the motives of others often have questionable motives themselves. And cynicism as the word is commonly used today, is a refuge for the intellectually lazy. Disbelieving everything, or believing the worst of everyone, is the lazy way out. Truly intelligent people consider things on a case by case basis.
You make absolutely no case here. Your argument boils down to, "Yeah, well, you can't prove they aren't corrupt, so they must be, it's just human nature." I'd like to formally enter my own hypothesis here, which is that it isn't human nature to be corrupt. Just yours. You simply excuse your own corruption by thinking that everyone else does it, too, and you just have to be that way so all the corrupt douchebags of the world can't take advantage of you. As a side hypothesis, I posit that your cynicism is simply a defense mechanism stemming from deep seated insecurities.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
All the EU members are signatories to the same copyright treaties the US is. Of the many provisions, one of them is that you have to respect copyrights from other nations. That applies in all cases. So if someone in France releases, say, a book in France and only sells it there, someone in the US can't just copy it and start distributing it over here. Doesn't matter that the author isn't choosing to make it available in the US, that's their right. The US still has to obey the copyright.
"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.
Too bad that your prejudice has kept you from keeping track of recent developments. This criticism has been levelled at the EU for a long time and was to an extent justified, but guess what? They have actually done something about it. The European Parliament, which is directly elected and no longer as weak as it used to be, has received new powers with every treaty revision since 1992 and plays an integral role in EU law-making. Meetings of the Council of Ministers are not secret, as you can see on its website, which states: "All Council deliberations under the co-decision procedure are open to the public. The Council's first deliberations on legislative acts other than those adopted by co-decision are open to the public. The Council regularly holds public debates on important issues affecting the interests of the Union and its citizens, as well as policy debates on the Council's programmes." FYI, the co-decision procedure is the most commonly used procedure in EU legislation. Granted, institutional reform is slow, the EU still has work to do in terms of its accountability and communication with citizens, but that hardly makes it an evil oppressive dictatorship, which is the point that you were trying to make. Apart from Belarus, you will indeed not find oppressive dictatorships in Europe at this time, and the EU was established precisely to keep it this way, which brings me to your next point.
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.
Please explain first who you mean by "Europe" and who exactly is being "arrogant". Is it Britain, Germany, Russia, France, Greece, Spain, Poland, Hungary, Sweden? Does every single one of this country have a "fine tradition to be able to ignore history and repeat past mistakes"? Last time I checked, Germans are still making up for the crimes of the nazis and not exactly preparing a second Holocaust. The Scandinavians no longer send out marauding bands of pirates to rob frightened people in coastal places. In Spain acknowledgment is slowly growing for the abuses and oppression of the Franco dictatorship, even on the political right. Italy does not seem eager to resurrect the Roman Empire. You may note that none of these examples has anything to do with the other, which illustrates that you can't generalise across an entire continent. I could even go on and argue that the one country which seemed unable to learn from history (notably European colonial history) in the last few years, with an elite running out of control causing millions of dead, does not lie in Europe, but I don't want to ignite another flamewar. In any case, as I mentioned before, the EU was established to prevent repetition of the mistakes of the past. It has been rather successful at that, considering that France and Germany are unlikely to go to war with each other at any point in the near future. It obviously does not have a perfect record, as was shown in the fall of Yugoslavia in the 1990s. Still, I fail to see how you can see the current European elite as being "out of control" or suggest that it will cause millions of people to die any time soon.
This same EU that's failed 13 years of account audits?
What does failing 13