EU Prepared to Fine Microsoft $2.5 Million Per Day

Lord_Slepnir writes "The European Union is unsatisfied with Microsoft's compliance with their anti-trust compliance from 2004, and is preparing to fine them 2 million Euros ($2.5m US) per day until they comply. Under that ruling, Microsoft must open up parts of their operating system to competitors, and change how they bundle Media Player." From the article: "On Monday, Microsoft said it had begun to provide the information Brussels had demanded, but the Commission has signaled the company acted too late. In December, Brussels informed the software giant that it had failed to comply with the original ruling it issued in March 2004."

Bundle? I lol'd

[voice_of_all_reason]

change how they bundle Media Player.

I don't think you can bundle anything more than making it completely uninstallable.

//open to pointers on how to excise MP10 from my new machine completely.

Now THAT is a lot better...

[Noryungi]

... Than the limited (though enormous) fines the EU was talking about the last time. Last I recall, the total fine was around 50 million dollars.

US$ 2.5M per day should be enough to get Microsoft full and undivided attention and, hopefully, make it play nice with other software suppliers. Or at least put on a better show of compliance.

Yes, I am rabidly anti-Microsoft... How could you tell? :-)

Re:I don't get it

[WilliamSChips]

I think, if they don't comply, they become contraband in the EU or something.

Re:Oh MEINE GOTT! At that rate..

[Ancient_Hacker]

oops, bad math, they can hold out for 666 years based on their market value, forever if you assume they get 4% interest.

what are they going to do with the money?

[LodCrappo]

So they fine MS... assuming MS actually pays (seems kind of unlikely), what are they going to do with the cash? I RTFA and it didn't mention it. I'd love to see it go to aiding the folks that MS's anticompetitive tactics have hampered, but how would that work? Or would they give it to charity, use it to lower taxes a tiny bit, something positive for people?

Re:Nothing for you to see here. Please move along.

[archen]

Despite how much I dislike MS I'm starting to wonder if it's even their fault. I mean they keep stumbling and stumbling. "We need Vista out the door now", they still can't do it. I'm not saying that MS isn't purposly dragging their feet here, but I wonder if behind the scenes it's just such a mess of code and red tape that they're honestly having a hard time complying. It's still just an excuse though and the fines could stand regardless.

Re:It's only money...

[Professor_UNIX]

If I did my math right, isn't that like 9-something-billion per year in fines? And doesn't MS generate something like 40 billion per year in revenue? I say they won't even notice....

No, it's $912,500,000 a year in fines. I would say Microsoft doesn't *like* to throw away a billion dollars a year on fines, but it certainly wouldn't put them out of business.

pay... or else?

[spevack]

Ok, so they fine MSFT 2.5 million per day. When do they have to pay up? What entity is responsible for making sure that payments are made? What happens if MSFT doesn't pay?

I'll believe it when I see it.

Re:Serious Question:

[Anonymous Coward]

The problem is that the EU insists on the disclosure of APIs that do not exist. Any API that is used by a different module has been disclosed and documented. The last round of exchanges between the EU and MSFT was a consequence of the complaint by the impartial authority that while the APIs had been disclosed, the documentation did not teach customers on how to write File and SQL servers.

Think for a moment - how could Microsoft possibly prove that the documentation they have provided is both accurate and complete? That's why they published the source code. Which the EU also rejected.

The ruling was purposefully set up to be impossible to comply with; this is a pure revenue-generating plot.

Re:I Think the EU is Wrong Here

[Petersko]

They're breaking the law. The US convicted them of it. The EU did too. So did several other nations. They have failed to comply with their punishment. If the EU does not act, they are stating to the world that they won't or can't enforce their own laws.

What the rest of the world did or did not decide is irrelevant. What I disagree with is the "failed to comply" portion. After reading both sides (including those long-winded PDF submissions from both sides), I think the EU's original demands were unclear to the point of unusability, and that Microsoft, in this case, has actually strived to comply. I think the EU has made a game of making Microsoft "guess", and then saying, "BZZT! WRONG! We didn't mean that, but we're not going to clarify much either. Try again. Oh, and your time is up."

Re:Serious Question:

[ShibaInu]

If this were purely a cash cow, the EU would have been collecting since 2004.

Also, got any source for your claims? Looks to me like you are a MS turfer.

Re:Respect

[HaeMaker]

Keep in mind, that the US had a regime change between the bark and the bite. MS has not been able to find the right politician or political office to influence in the EU to make this go away.

In the US, under Clinton, there was an overwhemling victory against MS. When the judge could not keep his mouth shut and the case was up for retrial, under Bush, the government struck a sweetheart deal.

I, personally, did not see any problem with a judge calling a bunch of criminals, criminals, after he had seen all the evidence, but hey, what do I know, I live in the real world.

The fine is also applied retroactively

[Nagus]

TFA didn't say it, but other sources [betanews.com] do:

The fine will be applied retroactively from December 15th.

This means on July 12, they will need to pay 209 * 2.0M EUR = 418.000.000 EUR, or 524.339.200 USD. Following that initial payment, they will continue to pay 2 million EUR each day.

It doesn't state anywhere whether the fine applies only to business days, or also to weekends and holidays. I've assumed it also applies to weekends and holidays since the laws are just as applicable on these days as on any other day.

Re:Nothing for you to see here. Please move along.

[cayenne8]

"Despite how much I dislike MS..."

I'm the same way, not a fan at all, but, I do wonder at what point, what would prevent MS from basically thumbing their nose at EU, and saying fine, we'll just withdraw all new products from you market...and if things got worse, just plain stop supporting the products currently out there in EU.

I would not guess it would be good for business, but, if MS has that much cash they're sitting on, and still can do business with the rest of the world...what would stop them from pulling this, and using that to leverage the EU into getting off their ass about this?

Sure, while it would seriously promote alternate OSes in EU, could the EU stand to have the carpet pulled out from under them in this manner considering how entrenched MS is in the world of computing..?

Re:Raise the price of Windows in Europe

[nuOpus]

Microsoft has been screwing us with the price for years. I mean ... follow the price of every new version of Windows and it doubles in price each release for very little. The only reason they raise the price that much is because they KNOW people will pay the high prices for no real gain. Now, if any other business were to do the same thing people would scream price gouging and never buy ... but no .... it is for some reason different because its Microsoft.

That ... and bad business practices are why I do not like Microsoft. I mean, the Caldera vs Microsoft lawsuit in which microsoft caused FAKE error messages after it detected another version of dos ASIDE from MS DOS even there there was technically nothing wrong? If that does not scream crap business practice I dont know what does. It happened again recently where people complained the MSN web site looked like crap in Opera. Someone running linux found out that using wget to download the msn web site identifying itself as IE shows that the hiccups were on purpose the even THOSE web sites looked like crap in IE. Microsoft settled with Opera outside of court because of their deep pockets. Opera SHOULD have kept up the lawsuit.

Like it or not Microsoft is not the honest company you think they are and they should be fined harshly.

Lets say a company like Dodge (auto company) had a monopolistic influence over the auto industry (they dont .. but lets just pretend) and they tell all of the auto manufacturers that they will provide the Hemi engine FOR FREE to all of them. Now, because of their monopolistic presence, all of the companies dump EVERY OTHER engine manufacturer because of a) their name, and b) the free price ... then you would see LOTS of people and lots of states getting ready to sue Dodge. Primarily because the states and the government have a lot to gain from LOTS of other companies making competing engines. In this hypothetical example, Dodge would put the engine making industry in danger and you would see states and even other countries sue dodge.

Yes, I hate Microsoft.

Re:And games!

[modecx]

The real bitch will be when games start to require DX10. Frankly, it's the only thing that will make many people to upgrade to vista, and MS knows it. I hope OpenGL and an open SDL type will be available to compete for with DX10 in the eyes of developers.

It's the consequences that will do the damage

[Anonymous Brave Guy]

The fine itself is relatively modest. But think of the knock-on effects that charging it will have.

The fine will inevitably hit Microsoft's profitability. That in turn will hit their stock price, as a company already struggling to increase profitability, whose stock is traded in a market already very cautious about the value of the US dollar and interest rates. If MS stock prices start to slide, then that will have three dramatic effects.

Firstly, the MS executives will suddenly become a lot poorer. BillG's fortune looks impressive, but it's electronic money, and much of it is tied to MS stock. Moreover, he can't take much of it out of MS, because doing so would send huge negative vibes through the market, which would itself hit the stock price further. The same goes for the other long-timers and big name execs.

Secondly, a lot of MS employees have pretty low salaries by industry standards, getting a significant amount of their compensation through stock options and the like. If the stock price tanks, it will take employee morale with it, and a lot of talented people's resumes are going to arrive at Google, Apple, Web 2.0 start-ups and other potentially more lucrative places within a week. Naturally, this in turn will do further damage to the company's market value.

Thirdly, the shareholders will be seriously pissed. That will result in a sell-off, lowering share prices still further. It may also result in executive heads rolling; big finance is not nearly as forgiving of executive blunders as it used to be, and there have been some high profile boardroom casualties in recent years.

In other words, if this snowball starts rolling, it's going to roll a long way, very possibly enough to bring down the whole company, and certainly enough to bring down a few executives and lose a lot of good people from the staff.

That is why the European judgement is a good one. It isn't, in itself, enough to sink Microsoft (and possibly tip the world economy into meltdown overnight). It is, however, enough to condemn them to death by a thousand cuts if they don't respond quickly. This is what is being missed by the people who have looked at their bank balance and concluded that they could last centuries just by paying the fines out of interest.

Re:Nothing for you to see here. Please move along.

[foreverdisillusioned]

Sure, while it would seriously promote alternate OSes in EU, could the EU stand to have the carpet pulled out from under them in this manner considering how entrenched MS is in the world of computing..?

The EU would stand just fine. There would be a lot of grumbling from big business, to be sure, but within a year I guarantee you that they will develop Euro-Linux which would in time completely flatten MS on both sides of the pond. Remember, EU countries tend to have very high tax rates and are extremely protectionist--if MS really wants to play hard ball, I have a feeling Europe will do just fine. Transitioning will be a bit rough, but I'm sure that piracy will help a lot--in such a situation, I'm sure that EU authorities won't be in any big hurry to crack down on MS software piracy.

Microsoft may be a big, bad, successful company with a mighty war chest, but that doesn't mean they can take on an entire continent. Take a look at Ubuntu's latest release and tell me with a straight face that XP/2000 is really soooooo much better for business or personal use (other than heavy gaming.) It's easier to install than XP, and more stuff "just works" out of the box than on XP! (at least it does on all 5 of my machines)

Microsoft's biggest asset is momentum, and if they tried to strongarm the EU they'd be flushing that asset right down the toilet. Personally, I'm really really hoping that they try it.

Re:Nothing for you to see here. Please move along.

[unoengborg]

Sure they could do all that, but that would tell the governments in the rest of the world that Microsoft really can't be trusted. Governmnets in many parts of the world are allready leaning towards Open Source to make sure that they can stay in control of their information structure. Microsoft doing something like this would be the final proof that these governments were right.

Once governments leave the windows business, large government contractors and their subcontractors will follow. This would hurt Microsoft much more than it would hurt EU. To EU it would mean one or two years with a lot of hazzle, while applications was wineified, ported to e.g. Linux, or replaced with software running on MacOS-X, To Microsoft it would mean the end of their dominance on the desktop world wide. In turn that would also mean that they would lose their grip on hardware venders, nobody is prepared to lose a big market like Europe just to ship products that only runs windows.

So, we can be quite sure that Microsoft will either pay their fines, or comply. There is really nothing to worry about.

Re:Which source was that...?

[StormReaver]

"Where might I find the information indicating that it was due to the "Bush Administration", as opposed to life-long government workers that keep their jobs even when the President swaps out?"

I can't point you to the interview source, but Bush indicated in his first campaign, during a Press interview, that he believed the anti-trust suit against Microsoft should never have been brought. When he got elected, he then appointed an anti-trust chief who went on record saying he didn't believe in anti-trust. This same chief then resigned the position just days after his department essentially dismissed the case against Microsoft.

It's not a smoking gun, but Bush's fingerprints are all over the crime scene.

Re:I usually try to keep comments constructive but

[Anonymous Coward]

You don't know I supose that almost every large corporation in the us is subsidized from time to time (see Boeing) and that your agriculture is even more heavily subsidized than the French agriculture; US are mainly exporting subsidized grains, stolen oil, subsidized weapons and "good quality" software (see M$) and some movies. For example, who do you think is buying Chevrolet or Cadillac outside US? The answer is nobody. American astronauts are taken to the ISS by Russian rockets, you know why? You should know by now: reliability! I've been living in North America for a couple of years and I'm stunned by the poor quality of most of the products found here. To put an end to it, USA is probably the most protectionist economy in the developed world; if it would not be like this most of the large american companies would go bankrupt in no time due to competition.

No time for a login and probably not worth either, too many fools on slashdot lately.

Re:Nothing for you to see here. Please move along.

[HaydnH]

Scratch that. If I RTFA, I would know that that the warning which told them about fining them 2m Euro everyday was actually in December 2005. It was in relation to failing to comply with the 2004 ruling, but the fine was only mentioned in Dec '05.

One thing the article didn't mention however is that the fine can be issued retrospectively, i.e: if they issue the fine today it would be back-payable to December '05!