EU Fines Microsoft $1.3 Billion 699
jd writes "The EU has slammed Microsoft with a fine of €899 million ($1.337 billion at current exchange rates) for perpetuating violations of the 2004 antitrust ruling.The fine is the sum of daily fines running from June 21, 2006 to October 21, 2007. It is the first company ever to be fined for non-compliance. The amazing thing is that the EU now expects Microsoft to comply and 'close a dark chapter' in their history. The EU has opened new investigations into Microsoft's practices and gave a lukewarm response to the company's turning over yet another new leaf last week."
Unfair? (Score:2, Interesting)
Apple ships with iTunes, and most Linux distros include a media player.
Is the point here to do with creating a monopoly on online music purchasing? Because despite shipping WMP with Windows, iTunes has still taken the market.
Dan
Re:at current exchange rate (Score:3, Interesting)
Also as was pointed out above: the value of the Dollar in regards to the Euro changes (at least) on a daily basis. So there's no single 'proper' dollar value for the fee, they just have to pay the 899m Euros.
Guess the magically acceptable rate! (Score:3, Interesting)
EU: Lower
MS: 2.98%?
EU: Lower
MS: 0.5%?
EU: Lower
MS: 0.4%?
EU: BZZT! Too late, we are going to fine you a Billion $s.
Did you see that? (Score:5, Interesting)
I'm absolutely stunned that someone, some government, finally got up the nuts to face off with the Monopoly. Took 10 years to get done, but FINALLY!! Think we'll see some big changes at Microsoft soon? Watch carefully. The fireworks are about to start.
Re:And what if not? (Score:5, Interesting)
If I built soapbox racers in my garage at home and branded them BMW, then someone lost a head in a collision in my not-quite-safe car, don't you think that BMW would be less than thrilled?
Re:1.3 billion (Score:5, Interesting)
The only punishments that would hurt Microsoft have been illegal since the Dark Ages.
It would be interesting... (Score:5, Interesting)
I would be very interested to see what would happen if a tech giant decided to play hardball with a government. After all, the Microsoft decision makers that count would be beyond the reach of the European authorities in terms of arrest and imprisonment.
Re:You're wrong (Score:2, Interesting)
Games and greeting card software are the only place users would be hurting for support, and those are probably represented OK on the Mac.
.NET dev (Score:2, Interesting)
Re:at current exchange rate (Score:5, Interesting)
Last week one of their managers said in an interview that the cost of the EU-required documentation had wiped out most income of the past year.
And now the EU does not accept this documentation
Or more accurate, does not accept the price attached to it.
Re:It would be interesting... (Score:4, Interesting)
It means that the EU can decided to confiscate any and all Microsoft property and Microsoft can do fuck all about it. It means that they can simply use those Server 2008 licences, and Microsoft can do fuck all about it.
If the EU wanted, they could drop Microsoft and develop an OS based around X/GNU/Linux, and screw Microsoft. You have to remember that until this point the EU has played by the rules of the game. But in the EU, the EU writes the rules, and they can change them as and when they like.
If Microsoft tried to play hard-ball with the EU, they would lose.
Re:Did you see that? (Score:3, Interesting)
Perhaps this will awaken people to the fact that in modern society nobody is above - or below - the law.
Re:1.3 billion ~= nothing, not to stock holders (Score:5, Interesting)
MS's stock price is down and going lower. MS's cash equivalents on hand have drop from a high of over $50 billion to near $20 billion. MS is plowing billions of dollars a year into product areas such as the X box and their online business that are losing billions of dollars every year. Having to pay a fine of $1.3 billion costs them about 7% of their cash on hand. That is $1.3 dollars that they can't spend on developing new markets, it is #1.3 billion they can't ever hope to use to create stock holder value. This is a big enough fine to cause MS's board of directors and MS's executives to be sued by the stock holders and removed from their offices.
This kind of a fine, especially if it is followed up by stock holder suits can lead to a drop in the stock price that will cost Gates and crew billions of dollars off of their personal net value, force to company to pay the stock holders an equivalent amount of money, and force major changes in the board of directors.
This fine is a big deal.
Microsoft may well be heading into a perfect storm of legal shit.
And, do not forget that the only reason they got a slap on the wrist in the US is because MS spent lots of money on the Bushies and their corporate dogs. The Bushies and the whole neocon (neofascist) crew are not going to be in office in January 2009. The political storm sweeping the US right now is like nothing I have ever seen before. And I lived through most of the 1950s and 1960s.
MS is in trouble.
Oh... for those with no perspective, this is a story that is going to play out over the next 10 years, not the next 10 months.
Stonewolf
Neelie Kroes (Score:5, Interesting)
Because the European Union is a progressive liberal democracy, she is allowed to have more balls than her US opposite number.
Microsoft needs to get a move on. The fine is in Euros, and if the Euro continues to appreciate against the dollar when they eventually pay it may bankrupt them. (this is a joke. It is a feeble joke but a joke nonetheless.)
Incidentally, and this is quite true, one of the lawyers for Microsoft summarised their case like this: "We are Microsoft. We are the good guys. So what we want to do is right." Now compare that with HP, who have people based in Europe who talk to the Commission and say, in effect "We would like to do so-and-so. Is that all right?". Strangely, you don't hear about massive fines for HP over their dominance of the office printer market.
It has been clear to me for a number of years that Microsoft simply needs to grow up as a company, like small children who, if their parents do a half decent job, learn to get what they want by politeness and cooperation, not by kicking, screaming and stealing toys. But, in order to change, they have to recognise the need for change. I suspect that their technical people are well aware of this, but some of the management is still in "if it ain't broke don't fix it" mode. The MS XML saga is pretty conclusive evidence of this. I bet there are project managers in ISO who by now will do their best to sabotage any Microsoft standards project, simply because they have been so pissed off by them.
Re:And what if not? (Score:5, Interesting)
This judgement seems pretty final (MS has been showing contempt for the court for years) so, to answer the question, I'm guessing if MS don't pay up now, the EC will just freeze their EU bank accounts, and rumour has it that Microsoft keeps most of its money in Ireland as a tax dodge. I guess they could raid their offices and take away their furniture (or what's left since Ballmer's last European trip) too, but that would be messy and not too cost effective—I'm sure MS has billions in the bank.
Re:And what if not? (Score:3, Interesting)
A ban would be a first as well but I think they'll just keep on doubling the fine every year...
Re:Interoperability of Office? (Score:3, Interesting)
If you have a large CD collection, you aren't stuck to one make of CD player. You can buy a Philips or a Sony or a Panasonic or a Daewoo or any number of no-name brands. Your investment in CDs is protected by there being more than one manufacturer of CD players. They all take the same discs, they all run from the same power supply, they all have the same analogue outputs. The only thing on which they compete is merit.
But if you have a large collection of saved Microsoft Office documents, the situation is a little different. You can't get a perfect drop-in replacement for MS Office precisely because Microsoft are withholding details of file formats and protocols. Therefore, Microsoft customers are forced to keep paying licence fees to Microsoft just to keep the ability to access their old saved documents.
Some third-party office suite could cane Microsoft on every other feature going (and indeed, the latest KOffice does); but it could never gain serious consideration as a replacement for MS, as long as it lacked the ability to import old documents saved by Microsoft Office. (The possible exception would be in the case of a brand-new company setting up shop from nowhere, with absolutely no legacy documents whatsoever and enough clout to persuade customers not to e-mail them
Anyway, it's not the 1980s anymore
Re:It would be interesting... (Score:5, Interesting)
But...
I had the misfortune to have to do business with MS in the '90s before the first judgment came down against them in the US. They told us privately that if the US government tried to break them up they would just move across the border to Canada or just buy a small country, preferably an island, and move the whole company out of the US. They also threatened, privately, to just stop selling Windows and technical support to the US government.
I was working for a baby bell at the time and so we were able to explain to them what it is like for a company to operate for 60 years under judicial supervision. Not nice. In the US a federal court judge can throw the entire executive staff of a company into prison for as long as he likes if they pull the kind of thing you suggest MS pull. They can appoint people to run the company until such time as it is in full compliance with court orders. And, a federal judge can send US marshals anywhere in the world to capture these people. (Yes, it may be kidnapping in the country where they reside... but the judge can still do it), and a Federal Judge can request that the President use military force to capture some one. So yeah, they can send in the Marines... Ok, that last bit is very unlikely to happen, but it could.
I do not know what the EU can do against a company that flaunts its laws. But, I am sure that at least some of the member states have laws similar to those is the US.
Just an example... I once worked for a fellow who was indicted for murder in the state of Illinois. He lived in the state of Utah and Utah declined to extradite him. He now is unable to leave the state of Utah. If he sets foot out side of Utah he can be arrested and most likely will be extradited to Illinois where he will be tried for murder. The same could happen to all the board of directors and all the executives of MS. They could be extradited to the EU to face criminal charges there, or if the US refuses to extradite them they could find that they can never safely leave the US again for fear of being extradited to the EU and spending a large part of the rest of their lives in jail.
No country can fail to react swiftly and harshly to any attack on the sovereignty and that is exactly what MS would be doing if they did what you described.
Stonewolf
Re:Well... (Score:2, Interesting)
Not really. I was listening to an economist from the UK, and he stated that the Euro was somewhat overvalued to the dollar. He and others see an adjustment coming down the pike in late '09 to early '10 when Europe catches up with our credit crunch.
Like it or not, for better or worse the US is the trend setter and the EU is the laggard by 4-12 quarters.
Re:And what if not? (Score:3, Interesting)
Re:And what if not? (Score:5, Interesting)
What Europe doesn't have is the legal "corruption" of corporations financing politicians campaigns' in exchange for favours - which is what grandparent was alluding to I think, and the primary reason Microsoft doesn't have the sort of influence it does in the US.
More fines, perhaps with a higher daily amount (Score:1, Interesting)
From Microsoft's 10-K filing:
In March 2004, the European Commission issued a decision in its competition law investigation of us. The Commission concluded that we infringed European competition law by refusing to license to our competitors certain protocol technology in the Windows server operating systems and by including streaming media playback features in Windows desktop operating systems. The Commission ordered us to license the protocol technology to our competitors and to develop and make available a version of the Windows desktop operating system that does not include specified media playback software. The Commission also fined us 497 million ($605 million). We appealed the decision to the Court of First Instance. In July 2006, the European Commission determined that we had not complied with the technical documentation requirements of the 2004 Decision, and fined us 281 million ($351 million). We have appealed this fine to the Court of First Instance. We have expensed and paid both fines, pending resolution of the appeals.
Re:Ha ha ha ha... (Score:2, Interesting)
The removal of powers from elected parliaments, by devious method, to an unelected and undemocratic executive, Council of ministers, which holds its meetings in secret, unelected commissioners, and a very weak parliament that is bought and paid for by the latter.
"You won't find them in Europe though, no matter what your libertarian fantasies tell you"
Yes, Europe has a fine tradition historically to be able to ignore history and repeat past mistakes yet again. Europe's ability for arrogance is only matched by its fantastic ability for creating evil, two world wars, and hundreds of millions of dead. How could I possibly not trust a European elite running out of control, and with a massive cavern where democratic due process should exist, but doesn't.
This same EU that's failed 13 years of account audits?
Do you have a good reason for handing 899 Million to people who can't even count? No, didn't think so.
Re:Interoperability of Office? (Score:1, Interesting)
But we got Law.
Ain't we proud we have it !