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."

Well...

That's 1.337.

Re:Well...

The dollar doesnt fluctuate, it drops.
Today it hit the lowest ever value against the Euro.

And what if not?

I wonder what happens if MS ignores that order as well... They won't be able to ban Microsoft products, I guess.

Re:And what if not?

The EU will simply take the money by force. Microsoft has assets moving through the EU, in the form of their revenue from sales of their products. The EU will walk in to the retail outlets and take that revenue until they have their money - the money from every copy of Windows and every xbox sold will go directly to the EU, and Microsoft will never receive it. This is the standard method that courts use for extracting fines from recalcitrant corporations - you don't ban their products, you just take their products.

And they'll keep doing it for as long as it takes.

Re:And what if not?

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?

Re:And what if not?

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.

You were shooting for +5 funny, right?

Re:And what if not?

Then Microsoft's reputation would be tarnished if the copy is bad.

Are you insinuating that there is actually a copy of a Microsoft product that isn't bad?

Apparently linux is the new kid on the block

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?

Re:Apparently linux is the new kid on the block

Microsoft is 33, Linux is barely 17.

hmm, will it be Illegal for MS to screw Linux?

Even as an MS fan, good...

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.

Re:Even as an MS fan, good...

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

They do again and again. It's mostly, but not always price fixing. Other examples include Volkswagen that threatened their Italian dealers to pull the dealership when they sold to customers not living in Italy.

Fines are usually very hefty and companies usually comply. Micropsoft risks to fall really flat on their face if they try their usual stints here.

Re:Even as an MS fan, good...

But they do:

Lift cartel: http://www.eubusiness.com/Competition/lifts-cartel-eu.33 [eubusiness.com]
Zippers: http://www.eubusiness.com/Competition/1190197926.91/ [eubusiness.com]
Dutch brewers: http://www.eubusiness.com/Competition/beer-cartel.09/ [eubusiness.com]

All hundred million dollar fines or more...

Did you see that?

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.

It would be interesting...

...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.

That's 984 Billion in American rupees

MS would probably want to pay up quick, before the dollar devalues even further...

Europe and California lead the way?

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

Re:1.3 billion

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.)

Re:1.3 billion

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.

Re:1.3 billion

I'm curious as to where that money is going to be going. 1.3 billion? Clearly some people are taking advantage of the situation in an effort to line their own pockets.

A stupid remark, you should be whipped.

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 :)

Re:1.3 billion

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.

Re:1.3 billion

The only punishments that would hurt Microsoft have been illegal since the Dark Ages.

You mean waterboarding?

Re:1.3 billion

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.

Re:Unfair?

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.

Re:Interoperability of Office?

If they want it to be proprietary, it's their right.

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.

Re:at current exchange rate

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.