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Microsoft's Price Fixing Penalty, 9M Euros

Posted by ryuzaki0 on from the oh-darn-guess-we'll-do-that-again dept.

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."

17 of 237 comments (clear)

  1. small change... by smoatigah · · Score: 5, Funny

    Thats going to make a huge dent that is...

    1. Re:small change... by GameMaster · · Score: 4, Funny

      It may not look like much, but when you convert it from Euros to US Dollars it's something like $1.3 billion. ;-)

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  2. "Anti-competitive" by brian0918 · · Score: 5, Insightful

    I have never understood why a company should consider the detriment to its competition when pricing its products. Can anyone explain this to me? Should a person or organization be free to set the price of its products, whether too high or too low, and likewise be free to succeed or fail based on its actions? Isn't any answer besides "yes" an indication that people have a right to the product. Either that, or one would have to argue that people were somehow coerced into buying the product.

    1. Re:"Anti-competitive" by LostCluster · · Score: 4, Informative

      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.

    2. Re:"Anti-competitive" by Winckle · · Score: 4, Informative

      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.

    3. Re:"Anti-competitive" by Insanity+Defense · · Score: 5, Informative

      But isn't that absurd? Isn't the entire concept of trade that the buyer and seller freely agree to the price of their product? If a store demands a company sell a product to them at a certain price in order to get placement in the store, the company is free to agree to the price or not

      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.

  3. Measly 9 million Euros by Junior+J.+Junior+III · · Score: 4, Insightful

    I have no idea what taxes are like in Europe, but I'd have to imagine that that's probably significantly less than the amount of sales tax collected on the sale of those licenses. At that point, it's just another minor cost of doing business. No wonder MS didn't feel a need to appeal.

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  4. Re:That's Surprising... by joelmax · · Score: 4, Insightful

    They most likely expected the fine and included it into their costs for running the promo. They probably figured that the amount they would make off the promo would probably offset the cost of the fine enough to make it worthwhile.

  5. Re:That's Surprising... by morgan_greywolf · · Score: 5, Insightful

    Easy. $9 million is not only pocket change to to Microsoft, it's very likely that $9 million < the legal bills to fight it.

    They could pay the lawyers > $9 million to fight it, or they can just pay the fine.

    Either way, the outcome is the same.

    Sometimes you just take the practical way out.

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  6. Re:Eurodollar to US Dollar by mikael_j · · Score: 4, Informative

    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

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  7. Re:Eurodollar to US Dollar by Anonymous Coward · · Score: 5, Informative

    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.

  8. Re:Eurodollar to US Dollar by InsertWittyNameHere · · Score: 4, Funny

    In the USA it's called Corona and it's a Mexican beer.

  9. It will take them a shole 3 hours to recoup by blind+biker · · Score: 4, Informative

    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.
  10. Re:Eurodollar to US Dollar by GreatBunzinni · · Score: 4, Interesting

    To make matters worse, eurodollars are not nor were they ever euros. Eurodollars are regular, plain US dollars that are deposited outside of the US's jurisdiction and therefore out of the control of the US's central banking system. So I guess someone heard that new term somewhere and didn't had time to know a bit about it before spreading it around. To put it in other words...

      "You keep using that word. I do not think it means what you think it means."

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  11. Re:That's Surprising... by Anonymous Coward · · Score: 5, Informative

    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...

  12. Cheap by Kynde · · Score: 5, Insightful

    If parking tickets where 2cents I could park where ever I'd like. I think the same holds for Microsoft in this case.

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  13. From the Bundeskartellamt by comm2k · · Score: 4, Informative
    For all of you wondering why Microsoft was fined. Linked in the article.. but who reads that anyway?

    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