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Microsoft's Price Fixing Penalty, 9M Euros
freakxx writes "Microsoft has been slapped with a fine of 9 million Euros by German regulators over illegally fixing the price of its Office-suite in an anti-competitive manner during a retail-promotion fair. Microsoft has accepted the fine and decided not to take this issue to any higher level."
That's not the issue in this story. It's under German law, that the supplier and retailer can't agree on what the retail price will be.
Anti-trust laws exist to protect the market as a whole, in the 90s and early 00s the laws were used to prevent microsoft from using its dominance in one market (Operating Systems) to unfairly crush other businesses with monopolistic business practices. For example Sun's JVM versus Microsoft's JVM, which was a broken implementation designed solely to disrupt Sun and leveraged through Microsoft Windows autoupdate, something Sun could simply not compete with.
It's called "Euro", not "Eurodollar". Much in the same way that the swedish currency is called "Krona" and not "Kronadollar" or how the currency used in the UK is called "pound" not "pounddollar".
/Mikael
Greylisting is to SMTP as NAT is to IPv4
This is not the manufacturer and retailer agreeing to a price between them. This is the manufacturer dictating to the retailer what price the RETAILER gets to charge its own customers.
Once the manufacturer has sold a product they should no longer have any control of it. Should the car dealer you bought from be able to dictate the price you charge when you resell it later on? Should the home builder be able to dictate what price a susequent owner sells for? I for one think not. Once the product is sold the prior owner should have no control over the new owners dealing with that product.
Yes. But eurodollar is actually a concept that exists in banking and predates the euro. They are dollars held in banks outside of the United States. They were instrumental to the establishment of the dollar as the world reserve currency. But with such similar terms it is not hard to see that people become confused.
According to Microsoft's 1st quarter 2009 earnings report, net income for the quarter was 4.37 billion US$.
Assuming a quarter has 90 days (and not distinguishing between working and non working days), MS makes
4370000000 / (90 * 24 * 60) = 33719 US$/minute
which means that Microsoft will make the 12.000.000 US$ in less than 7 hours - and this including non-working days, and assuming 24-hour days.
If you're not MS, you may weep now.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
Wrong. It is *not* the legal costs.
Legal fees are regulated in Germany. For a 9 Mill Euro court fight, assuming they use in-house lawyers for their defense, the standard costs (2 "full fees") to get a judgement are just Euro 20912.
Seems MS just sees no chance to win...
The product in question was heavily advertised in the autumn of 2008 in stationary retail outlets. Amongst others, a nationwide active retailer advertised the product with financial support from Microsoft. Even before the launch of the advertising campaign in mid-October 2008, employees of Microsoft and the retailer in question had agreed on at least two occasions on the resale price of the software package "Office Home & Student 2007".
Not every contact between supplier and retailer regarding resale prices constitutes an illegal concerted practice within the meaning of Section 1 ARC. However, this must not lead to a form of coordination where the supplier actively tries to coordinate the pricing activities of the retailer and thus retailer and supplier agree on future actions of the retailer. In the present case, this boundary has been crossed. Microsoft has accepted the fine.
http://www.bundeskartellamt.de/wEnglisch/News/2009_04_08.php