'No Alternative' To Microsoft Fine 394
An anonymous reader writes "News.com is running an interview with Neelie Kroes, the competition commissioner for the EU. She confirms that the massive fines to Microsoft are absolutely necessary, and goes into some of the commissions reasons for slapping the giant down." From the article: "Microsoft has claimed that its obligations in the decision are not clear, or that the obligations have changed. I cannot accept this characterization--Microsoft's obligations are clearly outlined in the 2004 decision and have remained constant since then. Indeed, the monitoring trustee appointed in October 2005, from a shortlist put forward by Microsoft, believes that the decision clearly outlines what Microsoft is required to do. I must say that I find it difficult to imagine that a company like Microsoft does not understand the principles of how to document protocols in order to achieve interoperability. "
"There's words in this, I can't understand words!" (Score:5, Insightful)
What's so hard to understand about this? This is a company which regards their software as "most secure ever" just before a several years of gaping security flaws are revealed and exploited. Many of the security flaws are in the gaps between divisions, where one division sees the appropriate way to validate passed paremeters is to trust everything is just peachy.
It's a cultural thing, sieze markets today, and bluff your way past the carnage tomorrow. e.g. revealing Windows security flaws should be halted by the Department of Homeland Security as it represents a threat to businesses which use the software (no liability is expressed or implied by the jokers who make billions selling it, however)
Microsoft should license rights to use those egg-headed Precious Moments figurines and release one each time they're caught bullshitting on trying to quash other markets with bundled give-aways or why some open standard isn't for the best. "Me sowwy!" It always has been and always will be about promoting Microsoft, to keep it relevent and necessary to guarantee the gravy train never ends. Thanks EU for having some balls, which the US DoJ doesn't.
How does that go? (Score:5, Insightful)
Something about "old dogs" and "new tricks."
At least this is a bit more than the wrist tap Microsoft received for its anti-trust violations in the US.
280m Euros (Score:3, Insightful)
If I were Microsoft... (Score:2, Insightful)
How about that?
She doesn't get it (Score:1, Insightful)
Re:If I were Microsoft... (Score:1, Insightful)
Re:If I were Microsoft... (Score:5, Insightful)
Re:If I were Microsoft... (Score:5, Insightful)
Wow, I'm trying to think of a better way to make a continent that's already antagonistic towards you migrate even faster to other alternatives like Linux. I can't do it. You're going to threaten to pull out of a multi-BILLION dollar market over some fines, alienating your customers and moving them to consider non-Microsoft solutions.
No, the good idea for Microsoft is to publicly bluster and privately strike a deal with the EU to come into compliance and pay a reduced fine. Microsoft essentially made a gamble and lost and will now minimize its losses.
Re:"There's words in this, I can't understand word (Score:5, Insightful)
The Department of Justice did at one point (I mean, they did win the antitrust case against Microsoft you know) but when the regime change occurred their priority system got readjusted. At least, that's how it appeared to me at the time.
Oh, obviously. It's like Bush hung out the shingle "Open for Business with Business" when the greatly watered down justice was finally meted out, and astoundingly Microsoft continues to violate even those terms with seeming impunity.
Re:Good luck Microsoft (Score:5, Insightful)
Re:Legal circles? (Score:2, Insightful)
About the unclear obligations I think that Microsoft has one really major hurdle to overcome: their non-compliance wasn't decided by EU appointees but the person was choses from a shortlist provided by Microsoft.
Is the money a big deal for Microsoft? (Score:5, Insightful)
Competition? (Score:2, Insightful)
Doesn't she? (Score:2, Insightful)
They could (if the EU does not prevent them), but that would only serve to deter sales, which for large "enterprise" organizations always involve heavy discounts from the "list" price anyway. Unlikely.
But even if that happened, would it be a bad thing? Wouldn't that make Linux or other Windows alternatives look that much better?
Re:280m Euros (Score:3, Insightful)
is that even remotely as significant as the fact that someone is finally standing up to microsoft? imagine the precendent set if large corporations could thumb their noses at the law at will in the manner microsoft is doing. (yes, i know, i know.)
Re:If I were Microsoft... (Score:5, Insightful)
Some idiot suggests this every time this case is mentioned. No matter how big a company you are, you can't fuck with sovereign governements. They can unilaterally write their own contracts, and enforce them with the full power of the state (i.e., all the way to lethal force). If they want MS software, they can take it and pay whatever they like.
In any case, they could use existing software indefinitely, while assessing the several alternatives begging for a chance to take the market. And that would be the end of MS's monopoly everywhere.
Re:Good luck Microsoft (Score:5, Insightful)
i see government trying to foster competition in the market. what do you see that i don't?
Re:She doesn't get it (Score:5, Insightful)
If the EU fines MS $357M, MS can simply raise the price of their European software by $357M.
MS has been a monopoly for a long time. When a monopoly sets prices, they do it based on supply and demand (not competition). MS could have set the price of Office at $10, which would have increased the number of copies sold, but would have still led to a net loss of revenue because the revenue per copy was so small. MS could have set the price of Office at $10,000, which would have meant more revenue per copy, but much lower sales, and again lower total revenue. Somewhere in between $10 and $10,000 is where they decided was the optimal figure. Even though MS is a monopoly, the number of sales does depend on price. At lower prices, they would make more sales in countries like Greece and Argentina, where a lot of people could afford a license, but use illegal copies instead in order to save some money. At lower prices, they would also make more sales to people who would otherwise have been willing switch to (or keep using) competing products like MacOS, WordPerfect, and OOo. At very high prices, they would retain a lot of Fortune 500 companies, but lose a lot of home users.
Since MS has already set the price of Windows and Office at what it thinks is the optimal level in order to maximize profit, it's not true that they can just raise the price in order to cover the fine, without having it cut into their bottom line. Higher prices would be less optimal for them, which is why they didn't set their prices higher before and simply reap additional profits.
Re:The Microsoft Protocol (Score:2, Insightful)
Nope, that she isn't. She only takes the word from the person appointed to decide if Microsoft is compliant or not.
And, oh, that person was selected from a shortlist provided by Microsoft.
corporate entities 'think' differently (Score:4, Insightful)
The main difference is that a corporate entity of the size of microsoft is represented by Lawyers, not engineers.
If they say say they cannot comply, and the lawyers provide lots of reasons which keep the facts in dispute, then they get to pay a nothing fine and maintain their advantage.
Losing their monopoly position would potentially mean the collapse of their major product lines, in terms of market share.
I'd be willing to bet that if microsoft the corporate entity felt this was something they desperatelly needed, they'd throw the engineers at it.
M$ isn't a sovereign country (Score:3, Insightful)
Your characterization is the equivalent of Charles Manson saying the reason for his prison term was that he didn't understand his obligations.
Microsoft knows damn well what's expected of it, they just don't want to do it because they won't survive in an open market. Too damn bad they're fighting against the commodization of software - a type of fight no one in the history of business has ever won.
My heart bleeds.
Re:Is the money a big deal for Microsoft? (Score:4, Insightful)
>If you fine Microsoft 3 million euros a day they will run out of money in. .
It's not about running out of money.
The fines aren't the end of law. You cannot simply pay fines as an alternative to staying out of
compliance with the law. There's a next level, where governments start arresting and jailing people
who *should be* responsible for that compliance, stripping of them of their personal assets, and maybe
even, ultimately, taking away a corporation's rights to do business within the jurisdiction of their law.
Re:Good luck Microsoft (Score:5, Insightful)
While I agree completely that the EU is just as corrupt as any other government, I would not go so far as to say they are as corrupt as the US government. I'd like to point out that while the (total) fine of around 1 billion dollars, is very large, it is ridiculous to suggest that the EU is in it for the money. The projected EU GDP for 2006 is 13888 billion USD, and 1 measly billion more is hardly gonna make the commission salivate.
Liquid Assets. (Score:4, Insightful)
The whole point of a fine is to be a punishment, severe enough to bring it into line, but not severe enough to break it altogether. MS Europe's liquid assets also have to pay its day to day running costs, as well as any fines. With that in mind, the EC would be nuts to fine it too heavily.
At least, right now. If MS doesn't come into line, then it's likely that the EC will up the ante and approach the problem from the bottom up - keep raising the fines until they're big enough to make MS come into compliance, as opposed to aiming high and striking the heart with the first shot.
Re:Is the money a big deal for Microsoft? (Score:1, Insightful)
It's not about money. It's about power. A territorial pissing contest to determine who the alpha dog really is.
KFG
Re:280m Euros (Score:5, Insightful)
And exactly what's in it for "us", their customers? We get to pay a little more to cover Microsofts illegal activities? That's hardly a "critical feature" worth a premium to me.
1) This is bad press for Microsoft. Shareholders KNOW the price of products will have to go up to cover this, and they won't see any return on that increase. Prices and sales will have to rise much higher than otherwise for them to see a return. Companies KNOW they will ultimately pay the price for this, and they have better things to do with their money than pay higher prices to pay microsofts fines.
2) As the price goes up customers get more annoyed, their is no value increase, and microsoft doesn't even see a profit from it. (Even if microsoft does bundle new features in with the price increase, the value increase will still be diluted.)
3) If customers are sufficiently annoyed they will look to alternatives, and reduce their commitment to microsoft.
4) Meanwhile, competition is given a bit of a wedge. The tremendous advantage Microsoft has thanks to its entrenched monopoly is countered slightly by the burden the fines place on the company. When bidding against a microsoft burdened by heavy fines, the competition stands to profit more on any deal at a given price (or break even when microsoft would lose money, etc...) It doesn't level the playing field by any means, but its slightly more level than it was.
Re:If I were Microsoft... (Score:5, Insightful)
How about that? ''
Excellent idea. The next time some government agency in Europe has to decide whether to use open source software or Microsoft software, we can just point out that Microsoft is considering withdrawing their products from Europe, so clearly Microsoft software has to be avoided at all cost to be future proof.
They DON'T want to be interoperable.. (Score:3, Insightful)
Re:"There's words in this, I can't understand word (Score:3, Insightful)
Re:Good luck Microsoft (Score:2, Insightful)
EU - company found in breach of law, company fined, company chased for the money
US - company found in breach of the law, company convicted, company asked to 'play nice' and nothing else done
I'll take the EU version thanks.
Re:280m Euros (Score:5, Insightful)
Let's say you are an MS shareholder. A company you hold stock in breaks the law, but, unconcerned, you keep your shares. After years of open non-compliance they finally get fined, a decision which was seen coming from a mi- um, kilometre away. Yet you still don't see how you have any choice or responsibility for your losses? GMAFB.
1) Consumers can choose not to buy MS products.
2) Businesses can choose not to use them.
3) Powerful shareholders can influence the board to do the right thing
4) Powerless shareholders can divest their MS stock for a company that doesn't flaut the law.
And to top it off, MS stock hasn't been doing well anyway for the past few years. Probably because major funds have already discounted the value of the long-anticipated decision in their calculations.
So bottom line, you get no sympathy.
Government power v. corporate power (Score:4, Insightful)
It seems to me this is really about whether governments have the ability to enforce the laws they create. Whether EU legislators truly represent the will of the people of the EU nations is debatable, but the EU is a governmental body that in theory speaks for the people it represents. Here we have a governmental body telling a corporation that it has violated the rules of doing business. The EU isn't telling Microsoft that it can't sell its products anywhere. It is sending a clear message to Microsoft that if the company does business in the EU, it needs to do so under the EU's rules.
It isn't a surprise that collectively the EU prioritizes cultural, economic, and political issues differently than the United States, so it seems absurd to me to expect that they'll change their rules just for you when you do business there. Apple can elect to stay in the EU market and deal with the ramifications of iTunes/iPod-related legislation, or it can stop doing business there. The same thing is true of Microsoft. They make billions of dollars in Europe. They can forgo making those billions, or they can stop whining that they didn't know exactly what the EU wanted, and start complying. It's obvious what the EU wanted, and it's obvious that the EU tired of Microsoft's endless legal maneuverings. Now Microsoft is seeing that the EU is serious. Massive corporations do not have unlimited power, even when they think they do.
Re:As much as I hate microsoft product... (Score:3, Insightful)
Yes, Just as US harmed its citizens by standing between Enron and all the people they swindled.... Damned that government power, Lets all have a minute of silence for fallen freedom fighter Ken Lay!!!
Protocol, not implementation! (Score:5, Insightful)
Re:Oh boy... (Score:0, Insightful)
"I must say that I find it difficult to imagine that a company like Microsoft does not understand the principles of how to document protocols in order to achieve interoperability."
Given that Neelie Kroes is a career politician and business woman, not an engineer who has ever written technical documentation for third parties, I'm not sure her opinion counts for a lot in this matter (besides, you know, the hundreds of millions of dollars). Commentary by Professor Barrett, who is currently guiding the documentation efforts would be much more relevant.
Microsoft's July 12 statement: http://www.microsoft.com/presspass/press/2006/jul
Re:If I were Microsoft... (Score:3, Insightful)
They get more value from keeping these hidden then the EU's fines take away. Office can be $300 per seat if you lack negotiating power.
They WILL PAY the fines until they can bribe their way out from under them for less.
They are not going to pull out of Europe because as I said the big corporations are the bread and butter those often happen to be MULTI-NATIONAL tell me, if Corporation X can't get windows and Office licenses for their plants in EU locations what are they likely to do. Run two different IT infrustuctures that interoperate poorly, M$ in the states ???? in the EU? I really doubt it they most likely will find away to either make ???? work accross the board, (HINT the last thing M$ wants) bribe M$ and the BSA to look the other way on license abuse. (M$ still gets something but maybe not as much).
They WILL NOT LEAVE the EU because neither of those options are going to be as good for them as simply paying the fines.
Re:"There's words in this, I can't understand word (Score:4, Insightful)
I wonder if the issue really is the vaunted MS protocols. Are there no clever people in the EU or elsewhere who could reverse engineer these and make them available to anyone? The EU, or any government for that matter, could amend their laws such that copyrights or patents are not violated if done for the purpose of interoperability. Even if someone distilled or even outright copied the protocols for the SOLE purpose of ensuring interoperability, their laws could be changed to allow for this. France recently went after Apple and their music DRM protocol. Instead of forcing Apple to give that up, why did they not simply rescind DRM protection laws similar to our beloved DMCA? In short order someone like DVD Jon would come up with a way of stripping DRM protections and there would be no law protecting Apple's or any other DRM system.
Doing this of course would subject everybody, including their companies to the same rules. It appears that the EU is singling out the most successful American companies and punishing them because their own businesses are not managing to compete on the open market.