Doing the Math in the Microsoft Anti-Trust Cases 407
coupland writes "Bob Cringely has posted this week's column and has made some interesting comments. He says that regardless of what happens in the EU, DOJ, and class-action proceedings, Microsoft can't lose. Why? Because they make more money by paying lip-service to the law and accepting the occasional fine than by complying. He even does some simple math to prove his point. Fascinating stuff."
Postponing trials and appealing... (Score:5, Insightful)
Judges should act quicker and allow for much less delay is anti-trust cases, because time plays against the ones they're trying to defend.
What a suprise (Score:5, Insightful)
Same concept as the old-style FCC finings (Score:5, Insightful)
Previously, the FCC was limited to fining $27,500 per offense - and Clear Channel, pulling in many millions a year syndicating Howard Stern, would gladly pay the small fine knowing that the 'controversy' only increased his ratings, resulting in even higher profits for them. When the FCC recently changed their fine structure to $275,000 per station per offense, that could result in many millions in fines each time... which is what resulted in Clear Channel dropping Stern from most of their stations.
In both this and the EU/Microsoft cases, small fines don't work, and large fines will either be appealled and reduced or attacked as being unreasonable. The only solutions that will actually change behavior are the ones that will cause serious economic harm, without seeming unreasonable - suspending licenses of non-complying stations, or forcing Microsoft to open code/APIs and unbundle apps (or even splitting up the different sections of the company.)
-T
Re:Postponing trials and appealing... (Score:4, Insightful)
Innocent until proven guilty, remember? There's no reason that someone accused of anti-trust violations should have less of an opportunity to defend themselves than anyone else.
Having said that, I agree that the length of time most (not just anti-trust) trials take is riduculous, especially when you count the years of appeals. The obvious solution would be to create some special court to hear the appeals in such cases (rather than having them go through several levels of appeals), but that would require messy changes to the judicial system.
bah... (Score:2, Insightful)
In anti-trust law the actors are individuals, companies, and regulators. The clock rate of the overall system was defined no later than the 1930s when the most recent anti-trust laws were passed. The primary data bus is provided by the U.S. Mail.
Holy mixed metaphors Batman! This just makes no sense. Actors and clock rates! Please... don't overclock your actors! Also what is the US Mail doing in here? Maybe I missed something but I don't recall the USPS having anything to do with Microsoft's legal difficulties.
It looks tough, but Microsoft gets to appeal, remember, and this particular part of the EU bureaucracy has been reversed on appeal two out of the last three times. So whatever the fine, Microsoft has two-to-one odds of not having to pay it
I don't recall the proper term, but this is logical fallacy. The fact that the EU has a lousy record does not give MS 2:1 odds of beating the rap. This is not coin-flipping, this is complex legal stuff. Simple odds do not apply.
However, I really love the last paragraph, especially the suggestion that justice be meted out through death and maiming. I'm all for that!
There are only two ways for a society to address such taking advantage of a legal system. One way is to drag that legal system into the 21st century, which isn't going to happen in America. The other way is to dramatically simplify the legal system along the lines of nomadic justice where there are no prisons nor even capability for collecting damages, so all correction comes down to death or maiming. That isn't going to happen, either, so Microsoft wins.
Re:"Oh, I'll just pay the fine..." (Score:4, Insightful)
But you are correct, he even got a large number of "warnings" while in office. Once he got elected to the house he should have gotten a driver to drive him around (espically if the health concerns he used in his defense were vaild).
Oh, and to stay on topic. Yes, I do believe that one day MicroSofts flouting of anti-trust laws will actually get them in trouble. But, it took Janklow almost 30 years to get in trouble driving, so it might be a while.
Corporate corruption (Score:4, Insightful)
Sounds kind of like corporate corruption. If you are a corporate officer and you can pillage $100M and face a 10% chance of being caught and receiving a slap on the wrist (paying a $5M fine, being banned from being on a board for directors for five years, and publically announcing that you will stop breaking the law), what would stop you?
In Microsoft's case probably most if not all of their $52B cash pile is ill-gotten and their EU fine is what, $620M? Most government taxes are higher than the 1.2% ill-gotten-gains tax.
Re:Postponing trials and appealing... (Score:4, Insightful)
Fines are not Punishment (Score:5, Insightful)
Happy Trails!
Erick
Re:Nothing you can do... (Score:5, Insightful)
I hope to God you are kidding. Not only would this be completely unfair, but it would also be an admission that Open Source cannot compete with MS.
If you think forcing MS to open source is fair, maybe you wouldn't mind if the state turned your lawn into a public park? Property is property.
Re:What a suprise (Score:3, Insightful)
Re:Great Business Plan! (Score:5, Insightful)
I seem to remember[1] this being a problem with the EPA laws years ago. The cost of disposing of waste legally was more expensive than dumping it illegally and paying the fine. It's a no brainer from a business point of view. As long as non-compliance makes them more money than compliance, even with the fines, guess which they're going to choose.
[1] this might be an instance of "creative memory" rather than actual fact, but the analogy still holds.
Re:Old news... (Score:3, Insightful)
All of it.
Related (Score:4, Insightful)
Fight Club? (Score:5, Insightful)
This reminds me of the scene in the movie, where Ed Norton's character explains that if it is cheaper for a company to pay fines, than to recall a potentially-deadly product, then they will opt for the former.
This is one rather unfortunate downside of capitalism; it only works when government has enough regulatory power to compell companies not to harm its citizens. Once a government is in the pockets of business, the citizens are in big trouble.
Re:Interesting, but his economics are wrong. (Score:4, Insightful)
IANAL, but I believe that a product can only be pulled if it poses a (physical) danger to its users. Buggy as Windows may be, I hardly think software poses that kind of threat (unless it is used in life-threatening environments, which the EULA specifically prohibits, anyways).
In any case, there's a difference between going after a company for its behavior and removing products from the market for political reasons. Nobody should be forced to buy Windows; but if I want to use it, there's no reason I should be prevented from doing so, either.
It seems he forgets one small detail (Score:4, Insightful)
He seems to base his whole article around the idea that Microsoft appeals simply to postpone any form of compliance so that they can continue to make as much money as possible.
I wonder if it occurs to him that maybe the appeal because they don't feel what they're doing is illegal, or at least feel the punishment handed out is too harsh.
Re:Total BS (Score:5, Insightful)
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There is nothing to stop the EU from retrying them and upping the fine if they keep it up. That's like saying you should get life for your first parking ticket.
Did you actually RTFA? Cringley points out that even that won't matter. The justice system moves so slowly that by the time the new trial winds down and MS has to pay the fine, they'll have earned billions more than the fine costs them, even adding in interest from the original fine date. The EU's max fine isn't enough to even dent MS.I hate to say it (because I don't care for Microsoft's actions) but I'm afraid Cringley is right, MS will win no matter what as far as the courts and anti-trust goes. Ironically the biggest threat to them is possibly Wal-mart's new PCs coming with Sun's Java Desktop on them. What's so ironic about it is that Wal-mart is another example of a company so huge that it can just ignore compliance because it'll cost it less to pay the fines.
Re:Well, Duh! (Score:5, Insightful)
These two are mutually exclusive. Anyone who can get elected will have had their campaign financed by someone that this hurts. Anyone who hasn't had their campaign financed by someone that this hurts can't get elected.
Re:bah... (Score:3, Insightful)
An "Actor" may not be a person; it is an "object" that has an "action." ("Gratuitious" use of quotes provided by Qwerty(r).) He is comparing the legal system to a digital system; it kinda works, I guess.
As far as the USPS is concerned: the modern legal system is designed to use the USPS as a medium to transfer large amounts of data, via "packets." These packets are generally yellowish in color.
The USPS is slower than, say, a network of connected computers (hypothetically called an "Internet"), at least for less-than-massive amounts of data. Since our legal system is currently designed to use the USPS, Microsoft can use this high-bandwidth, extremely high-latency data bus to their advantage: the longer it takes to convict, sentence, and enforce violations, the more money Microsoft makes from their illegal behavior.
I don't recall the proper term, but this is logical fallacy. The fact that the EU has a lousy record does not give MS 2:1 odds of beating the rap. This is not coin-flipping, this is complex legal stuff. Simple odds do not apply.
If the EU had a record of *not* reducing the remedy on appeal, I would feel much more confident about this. As it is, since they have a history of reducing the fine on appeal, I certainly don't feel very confident they'll have the balls to stick to the original remedy.
Simple odds don't apply, but you can use past behavior as an indication of future behavior with a fair amount of confidence.
Corporation = Army (Score:1, Insightful)
Re:"Oh, I'll just pay the fine..." (Score:3, Insightful)
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He kept on "paying the fine" until his car met a motorcyle and the person driving the latter was killed.
An apt analogy considering how many small companies Microsoft has killed over the years through its practices (both legal and illegal ones).That's all fine and dandy... (Score:2, Insightful)
Re:"Oh, I'll just pay the fine..." (Score:4, Insightful)
Re:I did the math (Score:4, Insightful)
Re:Nothing you can do... (Score:5, Insightful)
You mean, like Microsoft's anti-competitive practices?
but it would also be an admission that Open Source cannot compete with MS.
It would be no such thing. Whether the source code to Windows is open has no bearing on how other open source products perform, except how they interact with Windows components. But closed source products would benefit the same way.
Property is property.
Intellectual property is NOT property.
Re:Postponing trials and appealing... (Score:4, Insightful)
And oh yeah, they should be in jail until their cases are decided, just like defendants in a murder trial. Let's see how much they try to delay things then.
There's a certain amount of precedent. Martha Stewart is almost certainly going to prison, and Dennis Kozlowski will probably be in the same boat once the trial finally happens right. ('Course, if you're a corrupt executive who's good buddies with Bush&Co., you're safe
Re:Interesting, but his economics are wrong. (Score:5, Insightful)
Actually, Cringley peripherally touches on that question, too, by noting that Microsoft has a lot of political allies. It is, of course, a matter of popular wisdom that money buys legislation, but that's not strictly true. You are, for example, not ever going to cough up enough dough to get Tom DeLay to advocate for same-sex marriage or to get Teddy Kennedy to sponsor a bill in favor of racial segregation. All but a few of these people really are ideologically driven, and all the money buys you is wiggle room, which is significant for most politicians, but not all-consuming.
The real problem is that there is an ideological faction in Congress -- which is primarily but hardly exclusively Republican -- which sees business and making money as a good thing, and which naively reasons, therefore, that bigger business and more money must be a better thing. These ideologues are not (especially) corrupt or stupid, but they are blinded by their own dogma. The libertarian wing of the faction is particularly blinded by their adherence to the doctrine of a self-correcting market because they refuse to recognize that, all other things being equal, wealth is itself a competitive advantage.
This will not change except at the ballot box, and it will not ever be the primary issue: the average person doesn't care enough about this to choose a candidate on the basis of their feelings about Microsoft or antitrust laws.
Now, mind you, I'm not arguing against being politically active by any means, but the best way to fight Microsoft (and Oracle, Adobe, Macromedia, etc., etc., ad nauseam) is to write excellent free end-user software. Sure, it's still necessary to fend off the more ridiculous legislative initiatives and vote wisely, but in the end, making the better product will win out.
(Now, by "better", I mean better in the eyes of the average consumer, not the average software engineer, but that's a rant for another occasion.)
Re:Fines are not Punishment (Score:5, Insightful)
I know like everybody says stuff like this, but it is just not right. Being raped should not be part and parcel of a prison sentence. Yes, it was funny in Office Space when they joked about "pound-you-in-the-ass prison", but I am concerned about living in a world where rape is viewed as justice, even informally. While I may not like Windows and Microsoft and even Bill Gates, he certainly doesn't deserve to be raped for ruthlessly creating a monopoly in computer software
In short, prison for executives who view themselves and their corporations as above the law? Absolutely. Should they have to make license plates or make gravel or pick up trash from the highway? That would be great. But raped? That is just barbaric.
I know you probably didn't really mean you wanted Bill Gates raped for his crimes, and I am not trying to be the PC police or anything. I am just disturbed by how nonchalantly we seem to treat the issue of prison rape.
or better... (Score:2, Insightful)
IMO, microsoft has more than proven they are chronic serial liars and crooks,and that they will continue to be crooks no matter what, and because of that they should have had their incorporation revoked. That joke fine they got in the US of being able to print up their own fine-money-vouchers, was beyond obscene. Joe and Josephine average can't do that, no "corporation" should be allowed to do that.
Re:Fines are not Punishment (Score:4, Insightful)
It's hard to know if $600M means anything to Gates personally; it likely wouldn't effect anything he does, but the fact he was losing that money out of his own pocket might have a psychological effect.
For the vast majority of CEOs, $600M would be a devastating personal fine; many may have enough squirreled away in "safe" places that they won't starve or be on the street(cf. OJ Simpson's "pension"), but they might also not be on a 200ft yacht or travelling in a lear jet, either.
The next step is to make many of these corporate behaviors criminal offenses with jail time as a possible option. While no CEO wants to lose a personal fortune, even retaining a cushy cash safety net is meaningless if you're making license plates in an orange jumpsuit.
But that's the way it's SUPPOSED to be. (Score:4, Insightful)
But that's the way it's SUPPOSED to be.
The company is in business solely to maximize profit. This makes it's behavior fit the definition of psychopathy/sociopathy - like about one/three percent of the population.
The government is in business to co-opt vigilantism by providing a coherent and understandable set of rules, including punishments for non-compliance that:
- convince most psychopaths/sociopaths that their best interests are served by following the rules, and
- taking out of circulation any that don't follow the rules, once it becomes clear that they won't follow them.
If the fines and other sanctions are low enough that businesses find it more profitable to be scofflaws than law-abiding, it's the fault of the GOVERNMENT, according its own legal theories.
Re:Fines are not Punishment (Score:3, Insightful)
This is how MSFT handles ALL contracts (Score:4, Insightful)
Cringely takes this up to the monopoly cases and class actions but it's the same game. This is why I've been saying, since the mid 90's, that any company that works with Microsoft is on the road to distruction. Sure, you might find one or two companies that were bought out and survive within the walls of their Redmond offices but most are just crushed and their bones just tossed out with the trash.
I still can't believe Sun Microsystems tried to use another legal document to settle with Microsoft. Look at all the stuff Sun and Microsoft agreed to. Dumb! Dumb! Dumb! They should have just taken the $$$ and walked away. IMHO.
LoB
Re:Postponing trials and appealing... (Score:2, Insightful)
He's missed the point (Score:4, Insightful)
Microsoft is a lot less strong than it looks - its all based on share value. If in a few years time desktop share starts to fall due to corporate Linux use, users are even more reluctant to upgrade yet again or purchase 6GHz machines with 4GB memory to run Longhorn, and they have no escape route into other markets because of EU action, they won't be a happy company.
Re:"Oh, I'll just pay the fine..." (Score:2, Insightful)
Oh, I'd say the odds are about the same as before your first accident... The odds of getting into two accidents within, say, 1 year are pretty slim. That does NOT mean that you suddely become "almost immune" to accidents for 1 year if you happen to get into an accident today.
Re:But think of the bright side! (Score:2, Insightful)
Okay. According to this logic, it is perfectly ethical, and indeed almost obligatory, for those who are afflicted with sexually transmitted diseases and/or are passionate (pardon the almost pun) about finding cures for these diseases to rape and/or cause to be raped those individuals whom they deem able to best effect said cure. Yeah, I didn't think so.
Rape is never right. That our resources are not optimially distributed according to some ethical code or other may be wrong, but raping people isn't going to help things.