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Microsoft's Price Fixing Penalty, 9M Euros 237

Posted by CmdrTaco
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."
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Microsoft's Price Fixing Penalty, 9M Euros

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  • by smoatigah (1520351) on Monday April 13, 2009 @09:05AM (#27555339)
    Thats going to make a huge dent that is...
    • Re: (Score:3, Insightful)

      by furby076 (1461805)
      This is a huge dent. Let's say if they didn't price fix they would sell their product at $100, but after price fixing they sell their product at $25. Their additional profit is $25/unit. So paying 9 mil Euros will put a huge dent into that additional profit if not take it out completely. Remember we are talking about a local subsidiary of MS, not MS corporate home. If MS let's them shoulder the burden of that penalty it would be heavy.

      Though I am wondering how they are doing price fixing. If they hav
      • Re:small change... (Score:4, Insightful)

        by Kynde (324134) <kynde@[ ].fi ['iki' in gap]> on Monday April 13, 2009 @10:27AM (#27556229)

        >> Russia recently announced that it was considering adding Microsoft to a list of companies with high market share that might be subject to additional scrutiny under that country's antitrust laws,
        >
        > So if I create a prodcut that EVERYONE loves and EVERYONE MUST HAVE I should be put under scrutiny and sued?

        You create a one-hit-wonder, then perhaps no. But you dominate a market quite a while, regardless of how superior your product is, then yes, you should be subject to scrutiny. Not outright sued ofcourse, the gp never said that.

        There is a good goddamn reason we have antitrust laws. It's just that now that the companies have gone so global that the countries into which they roll in the profits too seldom tend to go after them.

        • You hit the nail on the head. There's a reason the EU is being more proactive with antitrust proceedings against Microsoft, and that is merely because MS is a strategic global resource for the US and a huge profit generator.

          With MS being in the US, the US can dictate to an extent how certain MS operating system features work via legislation, and thus they can define how the world uses their PC's. As a specific example, I see trusted computing modules being legislatively required within 10 years. Already vas

      • You started well, but faded...

        Yes, it's a significant fine, and should make the Ms boys take notice and change, as they say they will in the article.

        Also, FTA, "employees of Microsoft and the retailer in question had agreed on at least two occasions on the resale price of the software package"

        Urm, that's what they were hit for; illegal price fixing. Of course, you could argue that such things go on al the time, and are perhaps of themselves not particularly evil, but that's not the point: they're illegal,

        • Re: (Score:3, Interesting)

          by furby076 (1461805)
          If you want price fixing look at car dealerships. Go to Wal-mart...every wal-mart has the same prices. Go to gas stations. Go buy an X-box games.

          Having a product, and subsequent versions of that, which people utilize is not a monopoly. To punish a company for making a successful product is wrong - it makes companies not want to create such products. Monopoly means no other options - but there are other options. There are other OS there are other office productivity software. The market helped make MS
          • Re:small change... (Score:4, Insightful)

            by jbengt (874751) on Monday April 13, 2009 @01:56PM (#27559559)

            Having a product, and subsequent versions of that, which people utilize is not a monopoly

            Obviously.

            To punish a company for making a successful product is wrong - it makes companies want to figure out how to avoid punishment

            There, fixed that for you.

            The market helped make MS the dominant producer.

            Go back and learn some PC history. It was the IBM monopoly that gave MS its' early edge, and MS did use illegal means to leverage that leg up into a OS and office suite monopoly.

            If I didn't have IE built into my computer how was I supposed to go to Mozilla's website and download firefox?

            Right, because it's impossible for the retailer to bundle a browser other than IE.

            If I didn't have WMP pre-installed on my computer how was I going to listen to music?

            Again, it would be perfectly reasonable for computer sellers to bundle multiple non-MS utilities, including a music player - except that Microsoft has often put barriers in their way making it impractical for them to do so.

            What MS did wrong, and it was done a LONG time ago . . .

            For suitably recent definitions of "Long Ago", like last year at ISO.

      • Microsoft has influenced the resale price of the software package--Office Home & Student 2007--in an anticompetitive manner

        The key here is Microsoft's multiple editions of the same software. Providing the same piece of software to multiple markets while pricing each market differently sounds a lot like price fixing to me.
        Consider this: Office is unsurprisingly a product that is targeted for Offices. Other companies could produce a set of non-enterprise editing software and price it appropriately, f

      • Re:small change... (Score:4, Insightful)

        by somersault (912633) on Monday April 13, 2009 @12:02PM (#27557681) Homepage Journal

        Even if I didn't do anything wrong I am supposed to be punished because everyone loves my product?

        Do you seriously know anyone who "loves" Windows? I hear people complaining about how they want to throw their computer across the room or how they are "rubbish with computers", but not many who say "wow, I love how intuitive this Control Panel/window manager is!".

        Perhaps you don't quite understand what a "monopoly" is, or why it is bad for the consumer. It's like saying that people in a communist regime where everyone is given daily bread and water rations must really love bread and water if that's the only thing they ever eat. Or imagine that each brand of car could only run when kept supplied with the manufacturer's own brand of fuel and oil - whoever had the best fueling infrastructure would win. Microsoft currently has the best "infrastructure" simply because they got in there first, so many business applications and games are heavily reliant on Windows rather than the more open platforms that have become available as the world of personal computing has matured. As more software companies start to make their software available on different OSes or move applications into the browser etc, we'll see what people really "love".

    • by GameMaster (148118) on Monday April 13, 2009 @10:03AM (#27555971)

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

    • by Tuoqui (1091447)

      I agree, they've probably made more than $9 million price fixing.

      • Care to explain _how_?

        What competitor are they undercutting? Open office?
        • Re: (Score:3, Funny)

          They lose money on every product sold, no matter what. They make money by selling a lot of them (volume!)

          • by Bert64 (520050)

            They don't lose money on selling software products...
            Any and all development costs have already been covered, leaving only the duplication costs which are virtually nothing... They could sell for $1 and still make a profit. How do you think professional piracy groups who only have duplication costs (higher duplication costs than ms due to economies of scale) make money?

  • That's Surprising... (Score:3, Interesting)

    by lag10 (667114) on Monday April 13, 2009 @09:06AM (#27555349) Homepage

    Their motto is usually "pry it from my cold, dead hands" in regards to these fines.

    Wonder what's with the change of heart?

    • by joelmax (1445613) on Monday April 13, 2009 @09:11AM (#27555425) Journal
      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.
      • Re: (Score:3, Insightful)

        by timeOday (582209)
        And they'll probably pay it off by dumping copies of Windows 98 ME onto German middle schools, valued at MSRP.
    • by morgan_greywolf (835522) on Monday April 13, 2009 @09:18AM (#27555499) Homepage Journal

      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.

      • by Anonymous Coward on Monday April 13, 2009 @10:12AM (#27556055)

        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...

        • Re: (Score:2, Informative)

          by lag10 (667114)

          Thanks for pointing that out. I forgot to mention that in my original post.

          Taking this into account, it's surprising that M$ didn't at least make an effort to resist the fine.

    • by Thanshin (1188877)

      Probably the closest director payed directly from his pocket money and forgot about it.

      "Hey Bob. I'm reading something about a fine in EU. Did you have any problem?"
      "Hmmm, Oh! So that's why the hotel was so expensive! I thought I miscounted the girls."

    • Re: (Score:2, Insightful)

      by LostCluster (625375) *
      Likely the fact that the legal effort to challenge the fine would cost more than the fine.
    • by amn108 (1231606)

      1. It would cost them additional finances to battle the decision, and what seals it all is the fact that most likely they would end up being slapped anyway. They knew this was not a battle they could win.

      2. You can figure a company of the size of Microsoft by now knows to include and account for consequences of their practices, sucn as being slapped for rigging prices. I.e. like someone else said already, most likely their plan took account of a possible fine and its likely size. They just included it in th

  • Punishment (Score:3, Insightful)

    by Davemania (580154) on Monday April 13, 2009 @09:06AM (#27555359) Journal
    Is 9 million euros really a lot for microsoft? It seems like there are no other action taken against their behavior and MS is just happy to take the fine and move along.
    • For a company with a market cap of $174 billion USD [yahoo.com] 9 million Euros which equals $12 million USD is a drop in the bucket.

      • Market cap != Money in the bank.

        I agree that this isn't a whole lot of money for MS, but they are not in the "Cash comming out the ears" situation they were in a few years ago. IIRC, when they were trying to buy Yahoo, they were going to have to spend all the cash in the bank and then take out large loans to finance the deal.

        Office is still earning money hand over fist, and despite the hoopla, the OS is still making them a lot more money than it's worth. However, the OS wasn't the blaizing success they
  • by LostCluster (625375) * on Monday April 13, 2009 @09:06AM (#27555363)

    Given the current exchange rate that's roughly $12,000,000 United States Dollars. [yahoo.com]

    • by mikael_j (106439) on Monday April 13, 2009 @09:27AM (#27555585)

      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

      • by Anonymous Coward on Monday April 13, 2009 @09:41AM (#27555731)

        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.

      • by InsertWittyNameHere (1438813) on Monday April 13, 2009 @09:41AM (#27555733)

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

      • Re: (Score:3, Informative)

        by vishbar (862440)
        In fact, Eurodollar [wikipedia.org] has an entirely different meaning.
      • The currency in the UK is should most definitely the "pounddollar." It sounds so quaint.
      • by GreatBunzinni (642500) on Monday April 13, 2009 @09:57AM (#27555915)

        To make matters worse, eurodollars are not nor were they ever euros. Eurodollars [wikipedia.org] 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."

      • by phulegart (997083)

        The Eurodollar...
        "On February 28, 1957, the sum of $800,000 was transferred, creating the first eurodollars. Initially dubbed "Eurbank dollars" after the bank's telex address, they eventually became known as "eurodollars" as such deposits were at first held mostly by European banks and financial institutions." ...predates the Euro...
        "The name euro was officially adopted on 16 December 1995.[6] The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the forme

        • by mikael_j (106439)

          Very long post but still so wrong. I've heard plenty of young americans call the euro "eurodollar", the same kind of americans who barely remember what celebrities were on MTV last year, much less that the word "eurodollar" has been in use for a long time.

          Also, how come 99% (yeah yeah, made up statistics blablabla) of those who say/write "eurodollar" when they mean "euro" are from the US? I can't remember the last time I heard someone from the UK, Canada, Australia, Japan, India or another country make that

  • "Anti-competitive" (Score:5, Insightful)

    by brian0918 (638904) <brian0918@gmai[ ]om ['l.c' in gap]> on Monday April 13, 2009 @09:07AM (#27555367)
    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.
    • by LostCluster (625375) * on Monday April 13, 2009 @09:11AM (#27555427)

      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.

      • by brian0918 (638904) <brian0918@gmai[ ]om ['l.c' in gap]> on Monday April 13, 2009 @09:16AM (#27555481)

        It's under German law, that the supplier and retailer can't agree on what the retail price will be.

        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. And vice versa. And a customer is likewise free to buy the product or not. Unless the company was coerced, or the retailer was coerced, or the customer was coerced, what is the problem here? Whose rights are being violated?

        • It's not the price between the store and vendor that can't be agreed upon, that'd be absurd. It's the price between the store and end consumer that can't be influenced by the vendor.

          • Re: (Score:3, Interesting)

            by gravesb (967413)
            It seems equally absurd that MS can't influence the price between the store and end consumer. They can certainly do it indirectly by selling through their website directly to consumers. So why not allow them to coordinate broad promotional rates?
            • by drinkypoo (153816)

              It seems equally absurd that MS can't influence the price between the store and end consumer.

              Do you remember when Microsoft was telling OEMs that if they bundled Netscape with their systems, they would lose their preferred pricing on OEM licenses?

              Oh wait, obviously not.

              Those who forget the lessons of the recent past are doomed to look like idiots on Slashdot.

              • by gravesb (967413)
                Influence does not mean dictate. As I clearly explained in my post, influence by offering the same product directly at a lower price. I'm also curious if you ever read the court of appeals opinion? Or are you parroting summaries from the internet?
                • by drinkypoo (153816)

                  Influence does not mean dictate. As I clearly explained in my post, influence by offering the same product directly at a lower price.

                  In this case, influence does mean dictate. Microsoft exerted undue influence. When people say "influence" in court they're not talking about secondary effects. Most of us aren't either. Just you. Please, come and speak the language the rest of us are speaking. I know it's confusing, but which aren't?

                  I'm also curious if you ever read the court of appeals opinion? Or are you parroting summaries from the internet?

                  You have committed the logical fallacy of false dichotomy. I have not read the the complete opinion; I am not parroting summaries from the internet. I read enough of the court's opinion to know what was going on

                • I haven't followed the case, but I'm guessing the MS was not trying to hold the price of the software down, but keep it up. The former would be in the best interest of consumers, but the latter would definitely hurt consumers.

                  MS doesn't want any of it's partners lowering the value of the software in the minds of consumers. If consumers start to expect that Windows costs $50/license instead of $100, then they'll throw a fit when the New version has an MSRP of $150 (which they'll do anyway, but probably no
            • It seems equally absurd that MS can't influence the price between the store and end consumer.

              Why should they be able to do that? Free market != Fixed market.

              What if Don Corleone was the sole provider of wheat, influencing the price of bread to something very reasonable, let's say, $100?

              • Re: (Score:3, Insightful)

                by gravesb (967413)
                There is a limit to what people are willing to pay, even for a monopoly product. Monopoly rents aren't infinite.
                • That depends on how hard you need/want the product, free market, you know. A heroin addict would pay any price for a single dose.

                  I found a way to compare MS Office to heroin. Now I'm happy, thanks.

                  • Re: (Score:2, Insightful)

                    by maxume (22995)

                    Any heroin addict? I bet there are lots that if you showed them two doors, one with $1,000 cash behind it and one with a little bit of heroin behind it, they would take the money and go talk to their everyday dealer.

                    I don't think that even severe addiction is going to remove the tendency to price shop.

                    • by Bert64 (520050)

                      But that's because you can price shop...
                      What if only a single dealer offers heroin, and you're addicted to heroin, would you pay the price that dealer was demanding, or would you go and buy cocaine from someone else instead?

                      That's closer to how MS operates, and why it's bad for consumers.

          • by brian0918 (638904)

            It's not the price between the store and vendor that can't be agreed upon, that'd be absurd. It's the price between the store and end consumer that can't be influenced by the vendor.

            And that is likewise absurd. If a vendor says, "if you want a contract with us, you need to price your product at $X on the store shelf" - isn't that contractual law, and shouldn't the store be free to accept or refuse to sign the contract, and succeed or fail by their actions?

            • Re: (Score:3, Informative)

              by Tony Hoyle (11698) *

              No, that's illegal. I'm surprised it isn't illegal in the US.

              They can say 'If you want a contract with us, we're going to charge you $X per unit' but the retailer is free to set any price they like above or even below that. To do otherwise is price fixing - it destroys competition in the marketplace by forcing everyone to sell at the same (inflated) price.

              • Re: (Score:3, Insightful)

                by brian0918 (638904)

                No, that's illegal.

                I'm not arguing whether or not it's illegal - that's a matter of fact. I'm arguing whether it should be illegal.

                To do otherwise is price fixing - it destroys competition in the marketplace by forcing everyone to sell at the same (inflated) price.

                You contradict yourself in the same sentence. You say that competition will be destroyed, but then say that everyone will have to sell at a higher price. What prevents a competitor from selling a similar product at a lower price? And how do you justify the violation of rights that comes with such regulations against setting the terms of one's contracts?

                • You contradict yourself in the same sentence.

                  No, he didn't. The competition between resellers is removed. The competition with other products is not killed.

                  And the next step is to force resellers to accept more conditions. Of course, all this in the best interest of the consumer.

            • by Comboman (895500)

              And that is likewise absurd. If a vendor says, "if you want a contract with us, you need to price your product at $X on the store shelf" - isn't that contractual law, and shouldn't the store be free to accept or refuse to sign the contract, and succeed or fail by their actions?

              But refusing means they can't sell the product at all. And if the vendor uses the same "contract" with all the retailers, that means the vendor is now setting the prices, so there is no longer competition between retailers. Whether

              • Re: (Score:3, Insightful)

                by brian0918 (638904)

                But refusing means they can't sell the product at all.

                Exactly. The person or company who made the product owns it until they sell it. That is called private property, and is a right required for a person to make rational decisions to benefit his life and his values.

                And if the vendor uses the same "contract" with all the retailers, that means the vendor is now setting the prices, so there is no longer competition between retailers.

                Of course there is still competition. Some stores are more convenient than others, and stores would compete to be as convenient to the customer as possible. At the same time, other vendors make other products that are sold in other stores. It's ridiculous how the so-called "pro-competition" camp is

              • You should be modded up because your post is the only one that defends Germany and actually makes any sense.
        • by Insanity Defense (1232008) on Monday April 13, 2009 @09:28AM (#27555611)

          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.

          • Re: (Score:3, Insightful)

            by brian0918 (638904)

            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.

            Yes, that is contract law. You can require anything under a contract - so long as it doesn't violate individual rights - and if the other person agrees to those requirements, they are contractually obligated to abide by them. Where is the problem?

            Once the manufacturer has sold a product they should no longer have any control of it.

            If that is in the terms of the contract, then you would be right. If not, then you wouldn't be.

            Should the car dealer you bought from be able to dictate the price you charge when you resell it later on?

            I would be an idiot to sign such a contract, but if I did, then yes, they would and should be able to. Again, I wouldn't sign such a contract. I want the car to be my pro

      • 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.

        Didn't Germany have a law that allowed manufacturers to dictate a retail price that set the minimum a store could charge? The idea was this protected the local shops from the big bad chains by eliminating any price differential.

        Has that gone away?

    • by Winckle (870180) <mark@winckle . c o . uk> on Monday April 13, 2009 @09:13AM (#27555445) Homepage

      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.

      • Re: (Score:3, Insightful)

        by brian0918 (638904)

        Anti-trust laws exist to protect the market as a whole

        I believe they harm the market by undermining the very rights that make the market possible. People must be free to succeed or fail by their own actions. Any company that would attempt to artificially inflate prices would see their previous customers no longer buy their product, and move on to another product.

        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.

        This sentence has no content. There is nothing inherently wrong with a monopoly, so long as the business is good and the company is not coercing you in any way, nor using government force to their bene

        • by ral8158 (947954)

          I believe they harm the market by undermining the very rights that make the market possible. People must be free to succeed or fail by their own actions. Any company that would attempt to artificially inflate prices would see their previous customers no longer buy their product, and move on to another product.

          I'd suggest you learn your economic theory from something other than an Ayn Rand book: the free market would only function the way you think it does if everyone had equal access to all natural resources and intellectual properties. In reality, monopolies form (not in and of itself illegal) and then abuse their position as a monopoly to manipulate the market in other ways (which is illegal) You are right that monopolies in themselves are not inherently wrong. No one believes they are. It's when they leverage

          • Re: (Score:3, Insightful)

            by brian0918 (638904)

            I'd suggest you learn your economic theory from something other than an Ayn Rand book

            It is not a matter of "economic theory" but of individual rights. For it to be any other case would mean that the ends justify the means. No ethical system is possible if you are to be judged on the results of your actions rather than the actions themselves (given your knowledge at the time of the actions). It is not possible to answer the question, "What should I do in this situation?" if you must account for unknowable future events and unforeseen consequences.

            In reality, monopolies form (not in and of itself illegal) and then abuse their position as a monopoly to manipulate the market in other ways

            There is nothing inherently wrong with monopo

        • by TeXMaster (593524)

          I believe they harm the market by undermining the very rights that make the market possible.

          Any pure free market (in particular without antitrust law) will in time destroy itself by degenerating into a monopolistic market. In a monopolistic market no new competitors can enter (because an existing monopoly can lower its prices long enough to starve any newcomer).

          Any company that would attempt to artificially inflate prices would see their previous customers no longer buy their product, and move on to another product.

          This is only true if the company is providing non-essential services AND if there is another, competing product. Which there might not be in case of monopoly (see above)

        • Anti-trust laws exist to protect the market as a whole

          I believe they harm the market by undermining the very rights that make the market possible. People must be free to succeed or fail by their own actions. Any company that would attempt to artificially inflate prices would see their previous customers no longer buy their product, and move on to another product.

          You can believe all you want, but you're wrong.

          Companies artificially inflate their prices by forming cartels to fix the price. Then the Cartel uses its economic dominance to force the smaller vendors out of business or get them to join the cartel. Why sell your product for $50, when you can sell it for $100?

      • Re: (Score:3, Insightful)

        by Divebus (860563)

        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

        Yeah... how did that turn out?

    • by gravesb (967413) on Monday April 13, 2009 @09:14AM (#27555451) Homepage
      In the United States, anti-trust law usually will look at harm to consumers. Harm to competition is good. Of course, a monopoly makes things a little different. Even with a monopoly and predatory pricing, though, you have to show how that will monetize the harm later on down the road. Predatory pricing is rarely effective because it is so hard to make more money in the long run. This case isn't predatory pricing per se, but I think the theory of harm is generally the same. Anyways, European countries generally have a very different view of antitrust law and the US does, and are much more willing to use it to accomplish abstract concepts of fairness and social justice, as opposed to regulating a market for the benefit of consumers.
      • Re: (Score:3, Insightful)

        by brian0918 (638904)

        In the United States, anti-trust law usually will look at harm to consumers.

        Doesn't that imply that consumers have a right to any product for which they would be considered to be harmed were they not able to have access to it? With every other right - life, liberty, property, pursuit of happiness - for someone to be "harmed" would mean that another entity was preventing them access to their life, to their property, to their choice of actions in their attempt at happiness. Doesn't this implication of a "right" to a product thereby violate the pre-existing rights of individuals to do

        • Re: (Score:3, Informative)

          by gravesb (967413)
          No. The harm is generally the conversion of consumer surplus into monopoly rent. It has nothing to do with any rights in any Hofeldian or legal sense. It has more to do with the economic theory of monopolies and efficient markets. And, depending on your theory of rights (the one you seem to be trying to assert was valid under Lochner, but has been frowned upon since the 1940's), there will always be a conflict somewhere. Congress decided that the more efficient solution in this case is the best solutio
    • Re: (Score:3, Insightful)

      by Hermel (958089)

      A law that forbids price fixing leads to lower prices for the consumer as it allows different vendors of a product to compete against each other. However, this also means that the producer looses some of its control over his products.
      Most European countries consider this a small price to pay to get the lower prices. Especially if the profits of overpricing go abroad anyway. :)

      • by brian0918 (638904)

        A law that forbids price fixing leads to lower prices for the consumer as it allows different vendors of a product to compete against each other.

        This is quite a remarkable statement, and you will have to do both of the following for me to be convinced:

        1. Back up your claim with evidence showing that a company would be able to maintain customers despite inflated prices.
        2. Show that the ends justify the means - that it is alright to violate the individual rights of the members of a company to offer their property - their product - at a price they decide, and be held responsible for their actions in the success or failure of those prices.

        However, this also means that the producer looses some of its control over his products.

        In any oth

        • "In any other situation, losing the freedom of action over your property is grounds for police intervention against the perpetrator. What is different here?"

          The difference is the initial seller wants to keep some rights to the property AFTER they have sold it. How far do you let those rights go? If you sell something on ebay do you have to contact the manafacturer to ask what price you are allowed to sell it for? Should the manafacturer have the right to refuse to sell to a retailer who stocks a competin
    • by dkleinsc (563838)

      I have never understood why a company should consider the detriment to its competition when pricing its products. Can anyone explain this to me?

      Here's the explanation you asked for:
      1. Oligopolies behave differently than competitive markets. This is because the sellers all to some degree have the ability to have a significant effect on the supply curve. In other words, the supply-demand rules you learned in Econ 101 don't exactly apply.
      2. Because of the supply control effects, sellers in an oligopoly often try strategies to switch from being (for example) the number 2 or 3 player to being the number 1 player. These tactics are largely a matter of ga

      • Re: (Score:3, Insightful)

        by brian0918 (638904)

        Because of the supply control effects, sellers in an oligopoly often try strategies to switch from being (for example) the number 2 or 3 player to being the number 1 player. These tactics are largely a matter of game theory, but can and do include tactics like selling things at a loss in order to grab market share from a competitor.

        This is all the more reason for more responsibility in the hands of the consumer. Through the education you provide, I as a consumer am better able to decide what companies to deal with, and I will not deal with a company if they are simply trying to grab market share. If they're selling at a loss, I can't count on them remaining viable in the future - no tech support 5 years down the road, no updates, etc. Yet you are arguing for less responsibility for the consumer. You would have responsibility handed ov

  • by Junior J. Junior III (192702) on Monday April 13, 2009 @09:11AM (#27555421) Homepage

    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.

  • by Ogive17 (691899)
    Who were they trying to undercut? What other retail productivity suites are still on the shelves?
    • by bahstid (927038)
      No, its not about them undercutting other productivity suites, its about them undercutting other retailers who are also selling MS Office... Maybe a car analogy. I am a car manufacturer and you are a dealer. I sell you cars for a fantastic $1000 a pop, if you agree to buy 100 units. After we've shaken hands and exchanged cash, I go to the guy next door to you and arrange it so that they can sell their 100 hundred units at a floor-price of $500. Guess you are going to have a little bit of trouble moving
  • 9m euros = cheap (Score:4, Insightful)

    by gcnaddict (841664) on Monday April 13, 2009 @09:17AM (#27555491)
    Challenging a 9m euro fine would be more expensive (lawyer fees) than just eating the fine, so I can understand their decision.

    It doesn't mean guilt... but they might be guilty anyway, so meh.
    • The exposure as evidence of even more crimes with a paper trail is very likely a large factor in deciding to just close this threat off and accept the fine. Anything from these investigations that becomes public knowledge can be used against them in other court cases around the world. It's just in one country after all, albeit a large rich one. Now we need to see other countries investigate the same practices, unless we're gullible enough to believe that only went on in Germany.
  • I don't understand what the theory of harm here is. MS was obviously attempting to capture more of its monopoly rent, but there are other ways to do so that aren't illegal, so I'm not sure what point this particular law serves. Why is it bad for retailers and suppliers to set prices? Don't large internet retailers help set market prices in a de facto sense, anyway? If MS sells the suite directly from its website, doesn't that cap what a retailers can charge? European antitrust law is confusing. I wond
    • "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 [cnet.com]"
      • by gravesb (967413)
        Right, I read the article. That still doesn't answer the question, who got hurt? What is the economic theory underlying that statute?
  • Now Microsoft will simply jack up the price of the German version of Office by about 20 Euro.

    • Re: (Score:3, Interesting)

      by Tony Hoyle (11698) *

      No, it means the retailers are free to determine the price vs. the wholesale price. Some of the cheaper ones will sell it cheaper than they do currently, and some will sell it at RRP or higher. Competition in the market is restored.

      Microsoft don't get to set the price. That's the point. The can recommend one but they cannot make retailers sell at that price.

      • But they *can* charge the retailers a higher price which in the end will be passed on to the consumers.

  • by blind biker (1066130) on Monday April 13, 2009 @09:42AM (#27555749) Journal

    According to Microsoft's 1st quarter 2009 earnings report [microsoft.com], 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.

  • I am wondering about one thing:

    Why are we still issuing fines in currency? Obviously, it should be percents of currency. Like percents of wages, income, revenue or whatever likes. Why are we not doing that? It would make it more fair, as a fine of 10% on the income would teach equally good lesson to a company with $10B income as to a company with $10M income. Isn't the whole point of fining to punish and make sure it does not happen again? Because 9M Euros for Microsoft is hardly a lesson more like a routin

    • Re: (Score:3, Insightful)

      by Tony Hoyle (11698) *

      Fining them $6B would mean they'd appeal it and it'd ending up being an expensive legal mess. You want to fine enough that it destroys the extra profit made, but not enough that it's worth them rolling out the lawyers.

      • by amn108 (1231606)

        Even though it may end up being expensive legal mess, chances are the expensive legal mess would end up them paying the fine anyway. Plus their lawyers' expenses, plus their prosecution's lawyers' expenses.

        On another note, 9M for Microsoft is not "enough" anyways. Then you may as well not bother fining at all. If EU fined them, they were pretty sure the law is on their side, lawyers effort of both sides included.

        I think I will wait out for some more opinions. But thanks for sharing.

  • Assuming they make less than 9 million Euros from price fixing and anti-competitive practices, that is...
  • Cheap (Score:5, Insightful)

    by Kynde (324134) <kynde@[ ].fi ['iki' in gap]> on Monday April 13, 2009 @10:35AM (#27556325)

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

  • by comm2k (961394) on Monday April 13, 2009 @10:55AM (#27556677)
    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 [bundeskartellamt.de]

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