Microsoft Blames Anti-trust Legal Fees for Price Increases

jm.one writes "BBC news has an article about the Californian anti-trust case and points out that Microsoft tells users would suffer from this: 'Somebody ends up paying for this,' said Microsoft attorney Robert Rosenfeld. 'These large fee awards get passed on to consumers.' Do they really understand why there are laws?"

They predicted it... it came true.

[DroopyStonx]

I remember when MS got slapped with that fine. People said, "Eh.. it's no big deal to them to begin with, but with what they lost, they'll gain back with a simple price adjustment."

So basically they still haven't learned their lesson. Cost of doing business.

Re:They predicted it... it came true.

[capt.Hij]

So basically they still haven't learned their lesson. Cost of doing business.

It is more than just a cost of business. Microsoft is saying that they can shift their cost curve, customers will pay, and there is little repercussion for the company. The only times that a company can get away with this is if it is either a monopoly or sells addictive products. This is why the government can jack up the prices of cigerettes cia taxes. Microsoft is admitting that it is a monopoly cuz I highly doubt that most people just can't get enough of XP.

Re:They predicted it... it came true.

[bwy]

I highly doubt that most people just can't get enough of XP.

What does that say about Linux on the desktop? It is free and readily available yet almost nobody is using it.

So why else are people using XP, if they aren't being forced to and there is an alternative? I've been reminded of why yet once again. My current project is a digital picture frame inspired by a previous slashdot story. It took several days of hacking to get RedHat 9 to do what I wanted (boot, log in, and go to a slideshow with no mouse cursor and never go into standby, and power down gracefully when the ATX power button is pressed. Well, just about nothing was pre-compiled. I had to compile the slideshow, Feh, along with imlib2 and several dependencies. I had to search all over and finally find and compile "unclutter", an app that would make the cursor go away. I had to do a kernel mod (powewswitch.o) which I still don't fully understand that picked up on the APM suspend hint and instead runs "shutdown -h now). Also, I was running KDE but then realized it was uncessary to use it's bloatware for this so went with Icewm only to find now a lot of the things I had configured to do with powerdown and stuff now had to be tweaked back to the Xfree86 config file. Also, RH 9 threw me for a few loops because it still used GDM even if you don't install Gnome and only run KDE. However, they put KDM stuff in the control panel making you think you can change login options there, only to get frustrated when they have no effect.

Anyway, this is a propietary project of course but a lot of the things were things oridinary users might want (slideshow apps, powerdown on power switch press, etc). Secondly, XP still would have been a better choice I think. It still boots much faster than RH 9 with everything turned off and IceWM. And, it would have been easier to configure- because most software is ALREADY COMPILED for one. So I did this project using Linux because I'm a geek and wanted to learn something new. Joe User however is going to turn to XP. Not because Microsoft is a monopoly but because it does things better than everyone else- like it or not.

P.S. I guess I can expect a flame now on the way I did things with my RH 9 install. Remember, though- I'm a software engineer and have loaded Linux on several boxes at my shop over the years. My whole point is usability by everyday people.

Re:They predicted it... it came true.

[Feztaa]

Any linux system comes with any number of programs that will hide the mouse cursor -- they're called screensavers.

What I would have done is, first of all, use Gnome. Then configure your screensaver to have random pictures from a given directory (easy with xscreensaver, gnome's default). Then you change your GDM options to automatically log you in, then you go and trim out your boot options (disable loading of networking, etc, you can really speed up the boot by doing that). After that, change your WM to be

Re:They predicted it... it came true.

[Pikhq]

He never said legally they can't. He said that people, for the most part, start to get offended by such activities...

Re:They predicted it... it came true.

[AmericanInKiev]

It may not happen overnight however; the ongoing cost of fighting monopoly charges gives competitors (back) some cost advantage.

Consumers are not forced to buy MS - and this is more the case every day rather than less - add to that the aditional cost of litigation with no benefit to the product and the effect will accelerate.

So "passing on the cost to the consumer" is not necessarily a panacea.

(As other post express - monopoly positions, addictive products, and bundling can distort the effects of fining a specific vendor in an uncompetative market place. - OS is mostly uncompetative - not completely however - and that is where there will be shifts in market share as a result.)

AIK

Re:They predicted it... it came true.

[Too Much Noise]

If anything, they should be applauded for looking after the own company, their employees and their very csutomers.

liiking after the company, sure. The employees, don't know about that, maybe. The customers??? the only way I can see this as looking after the customers is to screw them more. It's not like these fines suddenly removed their ability to 'innovate' (oh, whatever).

"gee, MS, I'm sooo sorry they found you overcharged me! here's some more money to cover what those bastards charged you!"

Re:They predicted it... it came true.

[drooling-dog]

I defy you to show me the US statute that says a business even if it is a monopoly can't pass costs on to customers.

You didn't understand the parent post; the only "laws" it refers to are those of economics. It made the point that Microsoft can simply pass on these costs only because it is a monopoly. If it were in a truly competitive industry prices would be set by the market, and if they attempted to raise prices unilaterally to cover extraordinary costs (like fines), they would lose business to their competitors.

Imagine two convenience stores across the street from each other. One gets robbed and its owner decides to double all of its prices to recover the loss. Perfectly legal, but it would never happen, would it?

Re:They predicted it... it came true.

[mpe]

You didn't understand the parent post; the only "laws" it refers to are those of economics. It made the point that Microsoft can simply pass on these costs only because it is a monopoly. If it were in a truly competitive industry prices would be set by the market, and if they attempted to raise prices unilaterally to cover extraordinary costs (like fines), they would lose business to their competitors.

In which case what kind of sanctions should be applied to companies who break the law?

Re:They predicted it... it came true.

[mpe]

The only reason these additional costs exist is because MS is a monopolist. (Actually, they're a dominant firm operating alongside a competitive fringe, speaking economically).

With most of the actual innovation happening in the "fringe". Relevent because Microsoft has complained that fining them "hurts innovation".

Re:They predicted it... it came true.

[TyrranzzX]

Yup, every company can pass on costs to customer when the cost of business increases. This creates demand for a cheaper way of doing business since there's competition, and therefore, society advances, in theory.

Introduce the monopoly, which has no incentive to creat a chepaer way of doing business since there is no competition. You fine MS, they'll jack up the price and spit in our faces. The only reason they get away with it is because they are a monopoly, if they jacked up the prices and they had competition, they'd die. The fine did nothing but increase the taxes on us.

There are no laws saying MS can't jack up their prices, but there are laws saying MS can't be a monopoly.

Re:They predicted it... it came true.

[Cecil]

There are no laws saying MS can't jack up their prices, but there are laws saying MS can't be a monopoly.

Um, it's quite the opposite actually. Microsoft is free to be as much of a monopoly as it wants. If its products are that good that everyone wants to use them, hurrah for Microsoft. It becomes against the law when the monopoly uses its position of power to lock-in consumers, lock-out competitors, dump product below cost to destroy competitors, jack up prices to ridiculous levels while no competition is in sight and various other underhanded tactics often used by Microsoft. The Sherman Anti-trust Act is called 'Anti-trust' for a reason. A monopoly has complete control over its market. Rather than simply disallowing this from happening when it might've happened for a good reason (See: Google) instead the public trusts the monopoly to behave responsibly. When that trust is violated, that's when they need to be nailed by the law.

Re:They predicted it... it came true.

[Alsee]

The issue is that if they weren't a monopoly it would be impossible to "pass such costs on to customers". It's basic econimics. Assuming no change in per-unit production costs, there is a single fixed product price that will maximize profits. A company would already be charging that price. Any increase in product price would then result in a decrease in profits.

If that weren't true then the company could have imagined they already had some sort of cost to passed on and charged that higher price in the first place, then simply pocket that imaginary "passed-on cost" as more profits and been making more profits in the first place. QED.

So either (A) he's blowing smoke out his ass with bogus threats of "passing on costs to customers", or (B) he's actually threatening to abuse their monopoly position to extort monopoly rents out of the public.

So either Microsoft was LYING to the court in an effort to dodge court ordered damages, or Microsoft was threatening to abuse their monopoly to extort monopoly rents.

Neither option reflects particularly well on Microsoft. Not that either sort of bad reflection could possibly tarnish their image any further.

-

Re:They predicted it... it came true.

[Alsee]

Yes, I'm familiar with that calculation.

First, you seem to have glossed over the first sentence of my post: "The issue is that if they weren't a monopoly it would be impossible to 'pass such costs on to customers'." :)

Second, I'd have to double check the details and math, but I'm almost certain that a fixed cost like a lawsuit does not affect marginal cost or marginal revenue. Therefore there is no change in the monopoly price either.

Third, the monopoly price is what I was reffering to when I said "extor

Re:They predicted it... it came true.

[Alsee]

No problem, your post didn't seem offensive at all. I've written far worse when I get careless.

Well, actually one problem...
The legal damages really belong in the fixed cost column. Though considering Microsofts tactics, it almost does make sense to expect increasing marginal legal costs with every damn copy they sell. Ballmer: "We sold an extra 10 million copies." Gates: "Ok, good. Budget for an extra anti-trust lawsuit this year."

Nitpick/humor:
What many other posts on this topic seem to miss is that a

Re:They predicted it... it came true.

[EvilTwinSkippy]

Costs?

This is a company with (supposedly) billions of dollars in the bank. How much does it cost them to mint a CD? Pennies. You have to pay for phone support, so you aren't getting that for your purchase price. They have been posting obscene profit after obscene profit.

You are paying for their overhead, screwups, and legal schenanigans. Kind of makes you wish they had to print where your money actually goes on the side of a product. Kind of like the ingredients, and nutritional info.

Re:So fines on a know monopoly become taxes...

[WNight]

The lesson, if you're not blinded to it, is that you don't need 100% control of something to be an effective monopoly.

Microsoft controlled the OS. If they didn't like you your application would accidently break every time they upgraded the OS. If they decided to compete with you, same thing.

It's like buying every bridge in town (matters more in some towns than others) and claiming that you don't represent a monopoly because you've only got 1/7000th of the road surface in town. Bridges are a bottleneck of driving. Like an OS. Nobody buys a computer for the OS, they buy it to do things, the OS is just like the mechanics of the car - something that makes the car do what you bought it to do.

With Microsoft's control over a large segment of the industry (90%?) they could bully other companies into not writing software for other OSes, or selling computers with other OSes.

In other words, they started to be able to extert non-market pressures. An ideal market has perfect knowledge and perfect availability. Microsoft is trying to remove these as much as possible. They don't want people to know about alternatives, nor be able to use them if they hear about them. If you do buy a competing office suite, which you can't get pre-installed, it'll break when MS "upgrades" something.

A capitalist would embrace the market. They would strive to offer a better service, or a better price, and draw customers voluntarily. Microsoft instead is paying people to mislead you and restrict your choice of competitors. Like bribing the city to rezone your property, or accidently shutting off your electricity, if you dare to compete with them. Or sabotaging their own product (car for instance) when you install a third-party product (stereo) in order to scare everyone away from non-Microsoft add-ons.

Re:They predicted it... it came true.

[smallfries]

That's the point that they're missing. The goal of anti-competition law is to make anti-competative behaviour unprofitable. So they continue to abuse their monopoly position, there are more anti-trust cases, and they get more fines. Those fines raise the basic cost of doing business for them and so they raise their prices. This makes their product less attractive than those that don't have to subsidise the cost of legal action, so that the market then corrects the situation.

In the long term, this cost of doing business will make them less profitable and their product less successful. Then we'll get some kind of radical change and the system will stabilise around some new stable point. This is anti-competition law working, although it takes a long time to play out...

it would be a lot quicker

[zogger]

if any law infractions revolved around named human beings, and not this non person person they call a corporation. If we re adjusted the laws back to named humans are responsible for their actions, and if the fines came out of personal bank accounts of whomever issued the orders that resulted in the crimes committed, you'd see a lot more honesty with companies. And the government could mandate a price freeze as well on their products to go in conjunction with any fines, or they could actually institute a "three strikes and you are out" provision like they have with human beings, and in the case of corporations, just completely revoke their charters after a third conviction. But they don't do that too often, companies are allowed crime after crime after crime after crime, yet they still stay "in business".

You make Bill Gates pay a big chunk out of his pocket, then make him do 500 hours community service picking up trash next to the road,after a few months in lockup, like any regular guy would get for stealing those sorts of sums, you'd see changes in his company's predatory practices, and pronto. You give him a perpetual get out of jail free card, he'll keep using it. It's that simple.

There's a variety of techniques that could be used to make corporations more honest, but bottom line is, nearly all the legislators, judges, and people in the executive branch make the bulk of their money from being stock holders and/or being in ownership or management positions in corporations, they profit handsomely from this corporate insulation, so they will NOT write, vote for, or sign into law anything that could hurt them personally. They keep up the laws that benefit corporations, and they keep up that level of legal armor and shielding that corporations have, that private individuals don't have.

If YOU defraud someone, it comes out of your pocket and you can't "pass it on" as a cost of doing business. If you do it a few times, you will personally go to jail, some times even one time depending on the crime. Pass a bae check over 100$, it's a felony, you could serve time. a corporation defrauds thousands of people out of billions, or puts a competitor out of business using questionalb tacts, those corporate officers hardly ever see any jail time. It happens, but it's extremely rare. Corporations can just keep getting away with it, time after time, and when they are so huge as to be dominant market players, it never results in any significant changes to the corporation, other than they learn to obfuscate the bookeeping better, and THEN they figure out what new laws that would benefit them better, that might keep them from getting caught, etc, that need to be passed, and then they go to work on that with campaign contributions and lobbying, using money they half stole in the first place. It's a corrupt vicious cycle, organized gang activity basically, and gates and company are just one example of many.

The system is so broken and so corrupt there is little hope that it will get fixed any time soon. I doubt it will frankly. And there is so little difference between "government" and really really large international corporations that we should probably just end the illusion that there is.

Re:They predicted it... it came true.

[Tony-A]

The goal of anti-competition law is to make anti-competative behaviour unprofitable. So they continue to abuse their monopoly position, there are more anti-trust cases

Simpler and more effective would be largish excess profits tax on monopolies.

Excellent

[Killjoy_NL]

With a bit of luck, this will come back to bite them in the gonads.

price increases steadily, security holes found repeatedly, consumer's irritation growing until they say "Well you know what Billy boy, up yours, we're switching to linux (or OS X)"
I just hope there's a viable simple alternative by then to which the customers can switch.

Re:Excellent

[tomstdenis]

As much as that sounds plausible it's not always. My Presario 2180CA laptop [for instance] is fairly Linux resilient. ACPI crashes it and repeatedly it fails to detect the keyboard [I've never had to "configure" a keyboard]. It got to the point where I just put WinXP on my laptop [well the copy that came with my laptop] because I simply just wanted to *USE* my laptop.

So really hardware vendors have to stop cutting corners before you can just blanket state "oh just use Linux".

Tom

STOP SPREADING FUD! LINUX IS STILL SOMETIMES HARD

[PimpBot]

Linux has made great strides in usability...but its got a way to go. Why did I just need to recompile my madwifi drivers with my kernel update? Why does Fedora's kudzu insist all ethernet interfaces start with "eth" (madwifi uses "ath")?

*I* know the "whys" for all this because I've been using Linux for years...trying to explain this process to someone less familiar, and they'll think I'm nuts for going through this process when my Windows XP setup "just works".

Re:STOP SPREADING FUD! LINUX IS NO LONGER HARD

[rpozz]

Linux is fine to use, until something goes wrong.. wireless is unfortunately a good example of this. I know two people who were trying to install wireless drivers on their laptops. Both drivers needed kernel headers. One required some very strange methods in order to make it work, and I had to MODIFY THE BLOODY SOURCE CODE to get the other to compile. Unfortunately, most end-users do not know, or care about GNU Make and GCC.

Re:STOP SPREADING FUD! LINUX IS NO LONGER HARD

[Phisbut]

I might just be "anecdotal evidence", but I really want to be using Linux. I would be doing so right now if I only could. But for some reason, my Mandrake won't boot because of my ATI All-in-Wonder Radeon9800Pro video card (every single setting out of about the 20 possibilities ended with "An error occured, try different settings").

I'd like to buy Lindows (or Linspire, or whatever the name of the day is), but I was wise enough to write to customer support and ask if my hardware was supported (mostly an issue about the video card), and if not, whether they expected to be supporting it soon. The reply I got was "No, we do not support that video card". So now I got a video card worth well over $400 and I should trash it to go back to a crappier card because Linux doesn't support it? Sorry, but I'm gonna stick to WinXP as long as Linux doesn't run on my video card.

You are right about Linux not being hard to *use* anymore, but it is still freakin' hard to *install* and get it running.

Re:STOP SPREADING FUD! LINUX IS NO LONGER HARD

[Phisbut]

Call me a mug if you wish... All I can say is that I do enjoy playing games every once in a while (entertainment is important... life is not always work work work, or recompile recompile recompile). I also like watching TV, and the All-in-Wonder provides me with all I need for that. But I'm a programmer, and I also like to program. This is something I would like to do under Linux. However, because of the two other things I like that I mentionned above, I can't program with Linux. That's basically saying t

Re:STOP SPREADING FUD! LINUX IS NO LONGER HARD

[Phisbut]

You're basically making my point here. Here's what you're suggesting:

I should install/boot in text mode, then figure out a way to get the ATI driver in text mode, install the driver in text mode and "attempt to configure". All that, plus reading a howto document that is 20 pages long.

I don't know about you, but that definately doesn't fall in the "easy-to-use" category for me... what's the point of having a GUI installer if I can't even use it?

Re:STOP SPREADING FUD! LINUX IS NO LONGER HARD

[Tough Love]

I presume the error message comes from your monitor, not from Linux. You should definitely boot in text mode to work this out. You need to know the vertical and horizontal sync range of your monitor, google will find this for you. Enter it into your XF86Config file then you should get something better than a black screen when you startx.

Sure, there should be automagic ways of having this all just happen, and in fact there are, they just don't always work. This is just as true for Windows as it is for L

If they're charging more for Windoze

[WolfWithoutAClause]

Then it makes the value proposition look even better for Linux distros.

This is a good thing.

Re:If they're charging more for Windoze

[xSauronx]

except that a huge number of people dont pay for windows separately; they get it packaged...or pirate it. in either case, the total cost of windows is zero the the end user.

If the cost keeps going up, no matter the reason, so will piracy of the product. Wed like to think more people would try linux, but they wont. My brother pirates windows; ive hadned him linux demos and despite only listening to mp3s and surfing the web hed rather pirate the windows he knows; then get a free operating system he DOESNT know; that may or may not work with all his hardware.

In fact, he reccomended to my mother the other day she try linux, she won't and its not because of the price. She "doesnt want to learn anything new"

Shed rather live with constant viruses with Windows and Outlook and problems with Internet Explorer than even try Thunderbird or Firefox and "learn something new" despite ALL the buttons are pretty clearly labeled, and you have to be just plain lazy to use that as an excuse. I even offered to switch all her contacts and bookmarks over, and get her junk mail filtereing started (something Outlook doesnt have) so she could email in peace...still no.

As much as Id love to see linux mature and be better for everyday everybody use; I think its going to take that and then some to get people to actually use it once its ready.

Personally, I think it sucks. Id prefer linux myself, except Im a gamer...and tuxracer isnt what Im looking for.

Cost of doing business...

[jarich]

MS seems to factor in anti-trust suits as the cost of doing business and rather than take it out of their profits, they just ramp up the price.

I gotta buy some of their stock one of these days... it's not that I believe in the concept or think it's right... it's just working for them so well!

Re:Cost of doing business...

[rigau]

I HAD to buy an XP pro laptop. Otherwise I could not take my law school exams on the computer. I dont know about having to write six 4 hour exams by hand if you dont have to.

It made me almost vomit to have to buy one intead of a Mac. I drew the line at not buying a dell. That would have just been too much. But how I do in law school is more important than which computer I prefer.

If I had been able to use the Electronic Bluebook software in any other platform I would have, even if that meant hauling a desktop running solaris over to the exam rooms.

So if I who am an absolute windows hater could be forced into buying a windos computer do you think the average person loses any sleep about getting a Wintel pc?

Re:Cost of doing business...

[Karl Cocknozzle]

If I had been able to use the Electronic Bluebook software in any other platform I would have, even if that meant hauling a desktop running solaris over to the exam rooms.

I'm sure somebody else has probably pointed out by now that you could have run Windows XP on your powerbook with Virtual PC... "Electronic Bluebook" doesn't sound like it's too terribly complicated.

Or is there actually a rule that says "no Macs" at the door of the exam room?

Re:Cost of doing business...

[rigau]

I said this already above but since this parent post is moderated higher than the other one i'll write it again.

Electronic Blue book closes up all the applications in the computer so you cannot access them (to cheat). If you run it on Virtual PC it will close all the application on the Virtual PC version of windows but it obviously will not shut off the applications within OS X since that is outside of the emulator. Thus VPC on the Mac is not an alternative to using a pc.

Re:Cost of doing business...

[ePhil_One]

Why would you support a company that forces you to pay for its mistakes?

Not to be pendantic, but pretty much ALL companies pass the costs of their mistakes on to their customers, else they go out of business. Stores increase prices to cover the costs of shoplifting, doctors increase prices to cover the costs of malpractice insurance, etc.

While I'm not a fan of MS either, but folks seem to be taking the criminal's point of view when they create bogus claims, or collect undeserved welfare payouts. They h

Nice

[Yaa 101]

Nice to let your customers bleed for your criminal conduct... More reason to leave them and use a real OS.

There outta be a law

[Lanhdanan]

Im getting SO tired of us paying for their mistakes? There outta be a law to prevent companies making people pay for them getting pasted with fines due to their own law breaking policies ...

Re:There outta be a law

[swv3752]

The government has the authority to dissolve thier charter. The justice department should have siezed thier assets and disolved the company. This would have sent a strong message that unethical business practices will not be tolerated and many other companies would clean up thier act.

Before anyone starts claiming that this is over the top, remember, Corporations are granted a charter expressly to advance the public good. thier charter can be revoked if they are found to not be doing that.

Re:There outta be a law

[rokzy]

it would be so much easier if people could be prosecuted for "being a dick".

it could be an on the spot fine of 0.5% of your total value.

an officer could just follow Gates around handing him tickets like toilet paper and saying "stop being a dick Bill... Bill, stop being a dick... you're still a dick Bill..."

Darl McBride? what a dick, every time he opens his mouth shove a ticket in.

those retards who have crap cars but think making them really loud makes them good, "hey, you're car sounds like a dying go-kart you dick!". kaching - more money for schools and hospitals.

how i handle this problem

[virtualone]

hey mr. policeman.. you better not give me that speeding fine.. or else.. somebodies bank will get robbed.. you know, somebody ends up paying for this.

Only reasonable

[k12linux]

Lord knows they can't afford to take the legal fees out of a measly 500% profit margin or the big stockpile of cash they are sitting on.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:No, they do not.

[gnu-generation-one]

"They have every right to adjust their prices to reflect these additional costs."

So now it's official? When you buy a microsoft product, you're directly funding illegal activity?

Re:No, they do not.

[argent]

if Microsoft wants to raise prices on their products, they have full right to do that.

If they were not a monopoly, that would be true. Market forces would serve to correct their behaviour. But it turns out that certain kinds of software... any software with a complex and closed interface like Windows... is a natural monopoly: you can't buy Joe's OS and expect to run software written for Bill's OS on it, so if the majority of the software is written for Bill's OS that's what you're going to buy.

So they are not sufficiently subject to market forces for your scenario to play out. Thus, they are a natural monopoly and should be regulated on that basis. If they don't want to be regulated, they should modify their software to remove the "applications barrier to entry" that causes the lock-in.

And it's not just cost that's involved here. I want to buy a copy of "minimal Windows" for a server, a copy without Internet Explorer or Outlook Express or Windows Media Player or the Microsoft HTML Control, because these components reduce the security and reliability of the system even if I don't want to use them. If there was an effective market for operating system software, I could buy that and still run Windows server applications on it. As there isn't, not only can't I buy it... I can't create it myself by starting with a full install and stripping components out.

The fact that Microsoft hasn't been forced to either abandon their business model for one that is compatible with competition, or been placed under strong regulation and become effectively a public utility, is just one of many warning signs that should give us all pause.

Re:Only reasonable

[sqlrob]

Lemme get this straight.

They're charged with overcharging on their software.
The legal costs for this charge are added to the cost of the software that they are already being charged with overcharging on. And you see that as OK?

The response to being formally charged with overcharging on your software is *raising* prices?

Please....

[El Cubano]

These large fee awards get passed on to consumers.

Like MS couldn't settle for something a little more reasonable than their 80%+ profit margins on Windows and Office. This is such bull. It's designed to get the government and public to be more accepting of their outrageous pricing.

I wish I could make up hourly charges like that

[Cryect]

"Mr Crew has billed Microsoft just over $3,000 an hour for his own work, as well as more than $2,000 an hour for other lawyers on his team. " What lawyer is worth even $200/hr (more on par on normal) much less several thousand dollars per hour. Cause I'm sure no one else could have done Mr. Crew's job just as well for less. definately something wrong if that was approved for lawyer fees after Microsoft lost. (but hey who didn't know that there was something wrong with the legal system in the States)

Re:I wish I could make up hourly charges like that

[ca1v1n]

In civil suits, the plaintiff's attorneys normally take 33% of the winnings. In this case, they're only asking 25%. Why do judges allow this? It's because of the substantial risk involved in taking a case like this. If the plaintiff loses, they get nothing. When representing a defendant, they are paid by the hour, and make damn sure they get that retainer up front. The risk is quite substantial, because a lawyer who works for 2 years on a big case and gets nothing is going to have a hard time eating. Allowing large contingency fees increases the likelyhood that these cases ever see the inside of a courtroom. Since contingency fees tend to be used when the little guy is suing the big guy, this tends to help the people who need it most and hurt the people who feel it least. Whether $3,000/hour is appropriate to further the interest of justice is left to the discretion of the judge handling the case, but it isn't an inherently outrageous fee under the circumstances.

Now, if you're wondering why lawyers often charge on the order of $200/hour with a straight face, it's because they have to pay their secretaries, paralegals, bookkeepers, phone bill, LEXIS-NEXIS subscription, malpractice insurance, rent, and, of course, Windows licensing fees. My parents are both attorneys with excellent professional reputations, and fairly thrifty people, but I still have college loans, having already spent many thousands of dollars on tuition out of my own savings. The savings didn't come from gifts or anything like that, they came from working since I was 15. It would be far worse if I had gone to college out of state, but we simply couldn't afford that at all. I don't blame my parents for any of this, because it's not like they've been neglecting me. They're doing the best they can. There's a fairly decent chance that at age 21 I'll have a higher income as a software developer than they do as (very good) attorneys.

There are certainly lawyers who become quite wealthy from their profession, but most of them end up somewhere in the middle class. If you can think of a way to streamline the legal system to significantly reduce those costs, your lawyer will surely pass the savings on to you. Unlike Microsoft, your lawyer has to compete.

Re:Sports Players

[Alsee]

How about a rate of over 791 MILLION DOLLARS PER HOUR?

Mike Tyson made $20 million dollars for 91 seconds work in the boxing ring. $220,000 dollars per second.

For that sort of money *I'd* step into a ring with Tyson. If I ran real fast I'd probably make enough to cover the hospital bills.

-

Re:Sports Players

[TykeClone]

I would also argue sports players are constantly practicing (or at least they should).

Add to that the average pro sports career is just a couple of years - don't blame them for making hay while the grass is green.

shouldn't that be illegal

[squarefish]

the company should pay the price of the fines, it should not be turned back to the customers. maybe a price increase is just what's needed to get those thinking about other options to just go out and implement them sooner. sounds like a pretty pathetic plan to me.

this is just the cost of doing questionable business, and it's not like they can even begin to say 'we didn't know we couldn't do that'. it's just fucking rediculous what these asshats are trying to get away with.

A billion here, a billion there...

[erick99]

and soon you are talking about some real money. I think they are sitting on about six billion in cash the last I heard. Still, they are looking at losing almost half of that to suits settled and suits pending with no end in sight to the litigation. So, it's not surprising that they will want to recoup some of it. Hey, I'm not saying it's right or that they even need to do it. But, any company that has to eat nearly three billion is going to want to do something. Somewhat relatedly, Pfizer agreed to a half billion this week to the FDA for mismarketing Neurontin and you can bet they will get it back through consumers.

Happy Trails!

Erick

Value

[nuggz]

$3k/hr sounds stiff. But what did he actually provide?
Would a less expensive lawyer been as successfull?

I think certain cases can demonstrate what a difference between a good, great and the best lawyers can have.

Maybe if we had a bit better performance the DMCA wouldn't exist. Maybe OJ would be in jail, who knows.
But when it is my ass or $$ on the line, I'd want the best, and the citizens of California deserve it too.

Comment removed

[account_deleted]

Comment removed based on user account deletion

They're not complaining about the fines...

[cperciva]

RTFA people. Microsoft isn't complaining about the fines (or settlements) here. They're complaining about the plaintiff's legal fees (which they're being required to pay).

And, quite frankly, I think they have a point. The lawyer who lead the class action lawsuit may be a really good lawyer, but I don't think his time is worth over $3000 per hour.

Re:They're not complaining about the fines...

[nuggz]

I do.
The lawyer made much more money for his client then he would have cost them had he lost.

If they had a second rate lawyer, sure he would have been cheaper, but then they might have gotten a fraction of the fine.

Re:They're not complaining about the fines...

[DroopyStonx]

What's the difference?

If Microsoft hadn't broken any laws to begin with then there wouldn't have been any legal fees to pay! Correct?

Re:They're not complaining about the fines...

[nacturation]

The lawyer who lead the class action lawsuit may be a really good lawyer, but I don't think his time is worth over $3000 per hour.

What isn't listed is how that hourly rate is broken down. Does that include the lawyer appearing in court and sitting in a chair for most of the time? Or does that fee include a research staff of 10 paralegals who research relevant case law? If it's *just* his fee, then I similarly have a difficult time seeing how that is worth the cost. However, one lawyer highly experienced with class action and anti-trust cases would be worth a bunch of lawyers who have limited experience.

Re:They're not complaining about the fines...

[Cryect]

When I worked at a law firm at tech support and we billed someone for 3 hours of research by our lead attorney it meant that he had spent 3 hours of research himself not his paralegals.

The other stuff does get charged just at a lower rate and such.

Re:They're not complaining about the fines...

[DavidBrown]

You have a very good point, but just so you know, it's not as if the plaintiff's lawyers had a contract paying them $2-3k/hour. It was a contingency fee case, which meant that if the case was lost, the lawyers would receive nothing at all.

Essentially, the lawyers funded the ligitation in return for a piece of the action. This is more or less typical in class action lawsuits where there are many plaintiffs who each have very little in damages. The masses or even the states weren't going to hire lawyers on an hourly basis to fight Microsoft, because it's not worth enough to each of them on an individual basis to take the risk. And if you say "there was no risk", you're kidding yourself. The fees earned by the plaintiff's lawyers (and no, I'm not one of them) don't even approach what the lawyers in the anti-smoking industry class action lawsuits earned.

The fees in these cases are approved by the judge as part of the class action settlement. The fees are calculated to take into account the money fronted by the attorneys and the risk of losing the case and getting nothing at all. In any particular case, and perhaps this one, the lawyer fees may be too high, but the lawyers here made this case. If it weren't for them, there would have been no case against Microsoft, and no settlement.

Re:They're not complaining about the fines...

[fname]

That's silly. I don't think A-Rod is worth $100,000 per game. I don't think Microsoft deserves to earn $10 billion/year. And I don't believe that anyone deserves $1 million for answering a couple questions correctly on a game show.

However, in our capitilistic society, we don't pay based on how much we think their time is worth. We reward entrepeneurs for taking chances, and we let people earn whatever the market will bear. If this was such a slam-dunk case, another lawyer probably would have filed the suit first, claiming the reward for himself. How much the guy's time is worth is irrelevant in a case like this.

My prediction

[njcoder]

Anti trust case gets settled.
Users get $10 coupon on newest version of windows.
Newest version of windows price increases due to litigation by $40.
Two years later, court says "no no no", consumrs get $15 coupon towards new windows.

They don't get it. The fine is because they over charged people.. They're not allowed to "make it up". They are supposed to distribute that 50bln their hoarding back to the people the stole it from.

Take the jump.

[Anonymous Coward]

If you are angry, then this is why you should be uing Linux.

If you are increasingly interested in Linux, but do not know where to start, grab knoppix.

Download here [knoppix.org].

No installation required, try it from the CD and if you decide you want to make the jump to the penguin world,. just run the install to disk program. Best of all, it is free. If you don't have the bandwidth, ask a freind, I have given out over 20 knoppix disks to my freinds, and 15 of them have converted to Linux 100%. Don't forget to checkout Wine and Crossover office, It will help your transition!

Oh the irony

[Xpilot]

OK, Microsoft says its legal bill is too high, so it has to overcharge its customers. But why did it get that legal bill in the first place? From the article:

"The legal costs are part of Microsoft's settlement for over-charging consumers buying its software in California."

Sigh...

Ironically, they are right . . .

[Idou]

One of the unique aspects of a monopoly is the inelasticity of demand on the price of their products. In other words, MS can change the price of their products and, since they have a monopoly, roughly the same quantity of their products will be consumed. Of course, this is not black and white. They cannot make their products 100 times more and expect the same amount to be consumed (though, I know of some MS shops that would have no choice . . .). However, they can raise their prices much more than probably any other company without having a significant amount of revenue decrease.

This means that additional costs to Windows can pretty much be passed 100% down to the consumer, and the EU's monetary penalty is really just another form of tax on the consumer. Perhaps we could call it an "excise" tax on windows.

No, the real way to punish MS is to break up the monopoly and introduce competition, then charge a monetary penalty that cannot simply be passed on to the consumer, because if the new MS enitity/entities were to raise their price so many people would buy the competitions' products that MS would actually experience a decrease in revenue.

Well.

[jellomizer]

Do they really understand why there are laws?

No. Plus they have a cash reservers that can last them 5 years of $0 in sales. they can easily eat it up. It is more of a scare tactic to prevent the states from doing it again. In fear if they do it again then then they will need to rase prices again. This does really hurt consumers in many levels including people who wish to purchase commercial distributions or linux, What business like to do is keep their prices no more then half of their competiors prices, so when Microsoft sells XP for $250 its competiors like Apple and the Linuxs will sell it for $125. If Microsoft sells it OS (like back in the good old days) for $80 Apple and the Linux's would sell for $40. The problem is that there are to many Supid consumers out there combined with their fear of computers. Makes this worse. People see something expensive they think "gee it must be good" and then they see how many people are using the product then they go "Well if everyone else is using is then it must be good" While the minority who actually knows economics and goes well I see that everyone is using it so demand is up so the price will rise, no mater what the quality is. So I will look for a product that is just as good but is not much in demand then buy that because it will be cheaper. Popularity and Price have nothing do with the quality of the products. If everyone went to Microsoft your prices are to high we will switch to an other os unless you lower your cost. Then Microsoft will lower its cost no mater how many states are suing them. Microsoft is working with a 20's mob mentality, with out perhaps the drugs and murdering.

Simple

[mfh]

Darwin said it best. Microsoft has to compete or they're dead in the water. They can't compete if they jack up their prices. The MS mentality is to offset court expenses with product prices, but that road is mined heavily. They should know better than this, really. Oh wait... nevermind.

Can we backcharge Microsoft

[cyber_rigger]

for time wasted for reboots ?

Anyone that took economics 101

[Kjella]

..should be able to see through that argument. They took monopoly profits before, they take monopoly profits now. Sunk costs like legal bills have absolutely no effect on the optimal price/quantity point. It only comes into play if there's competition.

This is simply trying to shift the blame of why they're extracting monopoly profits: "Damn M$, stop bleeding us dry" to "Damn justice department, stop suing them so we don't pay the bill". When in reality, they would have taken that money anyway, because they can.

Kjella

But don't worry...

[Attila]

Their objective TCO studies will still show Windows is cheaper than Linux.

The cost of doing business is always passed along

[starfire-1]

I'm amused at the outraged postings of people shocked by the fact that Microsoft passes along settlement costs to the consumer through price increases rather than cutting into their profits. Look, they'll raise their prices first, and if demand drops off or they're afraid that their market share is shrinking, then they may lower their prices again.

Litigation resulting in cash penalities are the easiest for corporations like MS to handle. I believe that state and foreign governments sue not for whats "right" or "fair" but because its a backdoor method of taxing the public.

IMHO, the best solution to deal with MS was the original penalty of splitting the OS and Apps segments of MS into two separate entities. You can't pass that along to consumers. No wonder MS fought so hard to get that reversed.

BTW - Here's another little fact. Corporations don't pay taxes (technically) either. So before getting all huffy that MS is getting away with it again, take a good hard look at the runaway litigation in the world and ask yourself where all of the money is going!

Monopoly

[AlexEdwards]

The fact that Microsoft can nonchalantly pass on these costs to the consumer with litte concern for its loss of market share shows how much of a monopoly they truly are, and how much they know it to be so. When an pattern of existence dominates an environment so completely, "evolution" ceases to be an issue - short of cataclysmic or revolutionary change.

The money's not going to come out of thin air

[jshindl]

This whole idea reminds me of something I see all of the time -- people supporting a government program, but not realzing that someone has to pay for it. For example, here in Florida, voters a few years ago backed a bullet-train overwhelmingly, not realizing that the money for such a train had to come from somewhere. We enjoy no income tax here, so it comes in the form of higher sales or property taxes, which affect us all.

On the same vain, everyone cheers when Microsoft gets whacked with a big judgement or settlement. But, the money has to come from somewhere -- and it will likely come in the form of higher prices. And since 90% of desktops run Windows, it will likely affect you in some manner down the road.

With that said, the attorney's fees in this case (and many others) are outrageous. The judge for set them more modestly.

Jason

Corporations shouldn't be fined People should.

[nlinecomputers]

This is an example of how fucked up our laws are requarding businesses. This isn't a Microsoft is evil example this is a basic corporate fact and is an example why corporations exist. Corporations are by design intended to protect individuals(the owners ) because the only thing you can do to a corporation is take it's money and as it job is to make money it will simply treat such an event as a loss of profit and it will react as such. If other operating costs go up then that would effect the price too. The only way you are going to change corporate behavior is by holding those in charge responsible for it's acts not the corporation. Except for a corporate charter many actions could be tried under conspiracy or even racketeering laws but that corporate charter insulates the owners from that. Change incorporation laws and this would stop.

Re:Corporations shouldn't be fined People should.

[argent]

When the United States was founded, chartered corporations were strongly limited. A corporate charter would be granted for some time period for some purpose, and would have to be renewed periodically. It could be withheld or even revoked.

http://www.ratical.org/corporations/TCoBeij.html

I think this idea is worth re-examining.

It was further back then that 1886.

[nlinecomputers]

Do a google search on Santa Clara County v. Southern Pacific Railroad Company. You'll find references.

Remember when...

[HangingChad]

...software piracy was costing honest users billions of dollars and product activation was going to fix all that.

Consumers to the burden of proof, added their personal information to the cost of using MSFT's software, and software prices went down across the board, right? Quite the contrary, you now get the burden of proof, a hoop you have to jump through every time you change hardware, AND higher prices.

Hey, as long as the MSFT sheeple keep taking it up the pooper you can't get mad because Redmond takes advantage of the situation.

Just got done isolating the last Windows machine on my network so it can't access the Internet. That's a Win2K box. The last piece of MS crapware I purchased at home since...2001. Wow, time flies when you're having fun instead of spending all you time patching Windows.

And I have to say it feels good when stories like this and the virus of the day come by. Not that I'd ever taunt the sheep by saying something like NEENER, NEENER, NEENER. And though I might be tempted to think they're technology LOOOOOOSSSEERRRS, manners would prevent me from saying so out loud. Instead I'd pretend to be sympathetic and understanding and wait until their back is turned and they're a polite distance out of earshot to start laughing.

Abusing Their Monopoly Again

[_iris]

I would consider this to be "abusing their monopoly power." Shouldn't the law consider it the same, thus allowing the DoJ to bring another anti-trust suit?

Oh wait... Bush would just quash this one like he did the last.

Oh the hypocrisy!

[ipl me asap]

So, this guy just "wins" a case against someone for price gouging... then turns around and price gouges, but that's ok, becuse it's MS he's doing it to... Toss this one in the blindly biased bucket.

If they were smart...

[Cytlid]

... they would push to make sure the majority of the "benefit" would go back to end users. But that wouldn't serve their purpose. After reading the article and a million different posts... they're just angry about having to pay their opponents' lawyer's fees. Hey, I would be too.

Not that I care for MS or their tactics, but isn't it a bit sad? If there are 13 million Californians who are going to recieve the benefit, a $10 coupon would not cut it. That gives you $130 million to the end users and $260 to the prosecuting lawyers. Looks like they'd have to double it... the saddest thing is that the big winners in all this are the lawyers and not the people.

Funny

[Epistax]

I blame Microsoft on Microsoft price increases.

Why is everybody upset?

[telstar]

It seems like a lot of people here think that passing along the expense to the user is unfair. These are the same people that are proponents of Linux. Do the math ... Windows costing more means that there will likely be fewer users of Windows because they can't afford it in their or their company's budget. Anyone that pushes Linux over Windows should be HAPPY that the cost is being passed onto the users.

Business Plan

[tiny69]

1: Run other companies out of business and become a monopoly
2: Profit
3: Get sued for Anit-trust violations
4: Pass legal fees and damages on to the customer
5: Profit
6: Have customers sign up for free software upgrade license agreement for large $SUM
7: Release new software AFTER said agreement expires
8: Profit
9: Extend, Embrace, . . .

How do I get in on this?

That's awfully strange

[mcc]

That out of all of Microsoft's business costs, the only ones "somebody has to pay for" are the legal costs with the government.

For example, wouldn't it make more sense to point at the approximately three hundred million dollars per quarter that Microsoft has been pissing away on the XBox venture since it began with no apparent plan to move to profitability in sight, and say that perhaps that is the cause of the cost increases? Or what about the MSN division, which last I checked has run very slightly profitable for only one quarter (sometime last year) once with only losses for the entire rest of its entire history? Or-- say-- Windows Media Player? Microsoft's giving it away but there's clearly development costs. Doesn't someone have to pay for that?

It seems absolutely bizarre that Microsoft seems to be trying to make the implication that ventures such as the original IE, or Windows Media Player, really are "free", and just attempts to "stay competitive", and the fact they have all this money from their OS and Office divisions doesn't give them any unfair advantage. Yet then once it becomes advantageous from a PR perspective to do so, they begin trumpeting about how all their costs get passed on to consumers. Well, gee! If the costs of doing business are getting passed on to consumers, then aren't the development costs for IE and WMP being passed on to consumers as well? And if IE and WMP are being paid for via costs passed on to the people who buy Windows, then why does Microsoft claim that these are anything other than forced bundling? Why the "it's free" charade that seems to be the basis of their claim that IE and WMP aren't illegally anticompetitive actions?

I'd say the costs passed on to consumers from Microsoft paying slap-on-the-wrist fees for monopolistic practices are dwarfed by the costs passed on to consumers from Microsoft actually engaging in monopolistic practices in the first place.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Why you can't punish a corporation.

[Greger47]

'Somebody ends up paying for this,' said Microsoft attorney Robert Rosenfeld. 'These large fee awards get passed on to consumers.'

Doesn't matter if its Microsoft or any other corporation, the costs of punishment ALLWAYS end up in the lap of said companys customers one way or another.

The only thing that's effective is either fine (or jail if appropriate) the owners of the company or force a liquidation, anything else is just a strike in the air.

/greger

Yes Massa!

[edunbar93]

Why does this remind me of a sweatshop mentality?

"Anyone who reports of abuses in this shop will be beaten severely!"

Understanding why is irrelevant

[Snork Asaurus]

Article Poster asks: Do they really understand why there are laws?

Laws are for controlling the common folk.

I'm not sure exactly who the "they" is in your question, but this default case covers most situations:

In this supposedly enlightened age, as the roots of globalization branch, grow and strengthen and nations install governments that are little more than paid operatives of corporations, said corporations develop a sense of omnipotence and the companion view that laws that do not work in their favor are mere repairable obstacles on the road to greater corporate wealth; an artifact of a less enlightened time that can be removed with the judicious application of money and, until they are removed, the penalties for the violation of which are entered into ledgers as just another "cost of doing business" that will ultimately passed on to the consumer. The sad, albeit anthropological, fact is that since greed and vanity are key characteristics of most politicians, many politicians are happy to accept deferred positions on that road repair crew in exchange for assistance in their appointment. They may end up repairing the road to hell, but that is irrelevant to them since they probably won't be around to see it completed and would likely never be held accountable for the impact of their work, since they tend to control the formation of laws that would hold them accountable.

So, to answer you question: to many corporations, understanding why there are laws is moot. They understands very effective means to deal with them. Among the those means:

1) Affix a surcharge to the cost of all goods

2) Return a small portion of that surcharge to people in positions to influence laws and treaties to the corporations' benefit

3) Profit. ;-)

BULLSHIT

[Bob9113]

'These large fee awards get passed on to consumers.'

I've heard this one before, and it makes me (as an armchair economist) absolutely livid. There is absolutely no correlation between Microsoft's cost of production and their market price. The idea that legal fees and fines or taxes get passed on to consumers is only true in competitive markets with a limited supply of the goods in question. Microsoft is selling a product with zero marginal cost (after producing the first copy of a new version of windows, each additional copy has effectively zero cost) in an extremely non-competitive market. Cost of production has absolutely nothing to do with their market price - it is determined entirely by the demand side.

EVERY cost gets passed on to customers

[serutan]

That's how business works, folks. It's just like conservation of matter, energy and momentum. When costs go up, the money to pay for them has to come from somewhere, and a corporation's money ALL comes from its customers. It doesn't matter if the reason is material costs, rents, interest rates, criminal fines, whatever.

Look what happened after the great, historic, multi-billion dollar tobacco industry settlement. The price of cigs went up, that's all. After politicians stopped blowing their trumpets of victory, everything was the same except the government was making more money from smokers.

In principle a company loses market when it has to raise prices, but for Microsoft this probably isn't the case any more than it was for Phillip Morris. Millions of people already buy software from Microsoft, even though the equivalent is available for free. Are they going to switch because it gets a little more expensive? Probably not.

This is a good argument for penalizing corporate executives personally for their business decisions instead of letting them hide behind the corporate shield. Think about this when politicians talk about taking the tax burden off the individual and putting it on wealthy corporations. It's a smoke screen. They all get their money from the same place: you.

corporate crime rules

[Doc Ruby]

This swindle shows the central problem with M$ monopoly crime: corporate liability protection. Properly administered, monopoly crimes would be remedied and punished at the corporate level, directors and owners, as their decisions (active and passive) caused the damage (and continue to do so). But the corporation construct protects them. So they pass the costs along to their customers. As a monopoly, their customers can't just switch to the competition.

Even though Ashcroft's Justice Department and Bush's FTC have obviously given a pass to M$, exactly their kind of corporation, they're just the sizzle on the rotten steak of the original penalty judgement. The only remedy to a monopoly corporation is to destroy the monopoly. M$ should have been split into its vertical components: OS, development tools, applications, media, and consulting. Probably some of those components should have been split into directly competing companies: .NET vs. VisualStudio, Office vs. Works, Consulting 1, 2, 3. Decimating the company would have unleashed value for everyone, including ginormous shareholders like Gates and Ballmer, who would see the combined value of their parts grow more quickly than the monolithic entity. But their personal power, which chokes the industry and its dependent markets, would be diminished. And a model would be installed for killing these giant krakens before they strangle us with their endless tentacles. Instead, we are dragged to the maelstrom.

Econ sidebar: pricing power != monopoly

[kma]

IANAEconomist, but all of the folks saying, "It's econ 101! In competitive industries, companies can't change prices, MS is warning that they're going to change prices, ergo they're a monopoly!" should be aware that economics has retreated from this simple "price setting" == "monopoly" claim since the 1930's. Now, it so happens that microsoft really is a monopoly. However, the fact that there is some elasticity in their pricing doesn't prove it.

By the "economics 101" definition, common sense tells us that very very few modern industries are "competitive," because in almost all real industries, companies have pricing power. E.g., Nike is not a monopoly, but they obviously have a lot of latitude in how they price their shoes.

The classical market model, wherein producers have absolutely no control over the prices of their products, was a great model for the mercantile systems of the 18th and 19th century, when they were developed. If you're a cotton planter, or molasses distributor, or lumber baron, etc. your production accounts for a small enough fraction of available goods that you really can't effect prices at all; you have no choice but to take the going price.

Very few modern industries fit this model, in part because not many modern industries involve true commodities; there's always some difference between McDonald's and Burger King that's important enough to some consumers that they'll pay a bit extra for their favorite. But also because most industries have a few behemoth leaders that are responsible for most of the production. But even for chemically identical commodities like steel and salt, companies end up having pricing power because so few companies account for so much of the production. In the US, if C&H stopped selling sugar, there would be a noticeable "sugar crunch"; this effectively gives C&H an ability to price sugar, since consumers can't credibly threaten to just get all their sugar somewhere else.

(Been reading Galbraith on my AM commute lately. Would genuinely appreciate any real econ types smacking me down.)

Margins are tough with monolopies

[wardk]

Gee, no room in the 80% margin to cover the costs incurred establishing those same margins.

life sucks being them

command and control.

[Snafoo]

Basically, Microsoft is so entrenched now that they can dictate terms to governments by threatening economic slowdowns, and hence, poor showings on election day.

Essentially, Microsoft now has enough economic power to also possess de-facto political power.

This is why we need a corporate death sentence

[rben]

A company that is convicted of being a monopoly can't be sued into behaving. It has to be dismantled. This is a perfect example of why that's the case.

The fines that are awarded, alternatively, could be secured by seizing the companies assets and either placing them in the public domain, where IP is concerned, or auctioning them to pay some recompense to the people hurt by the company. But even so, if you leave the company intact, it will just do the same thing again. I know of no example of any monopolistic company giving up it's bad behavior if it could continue to break the law and still make a profit.

Unavoidable

[EdZep]

It may sound "unfair," that Microsoft is somehow getting out of paying for its actions, but all expenses paid by all businesses for all reasons are always passed on to customers.

Re:Unavoidable

[jdesbonnet]

Wrong! Only a monopoly can pass all costs to the consumers. Anything other than a monopoly can only push up prices so much before sale start to diminish.

By saying this, Microsoft, in effect is admitting to being a monopoly.

costs always passed on - common misunderstanding

[Anonymous Coward]

It's a common misunderstanding that costs are always passed on to consumers. Most companies actually sell at whatever price they can get (the price that the market can bear). They then make a profit by having costs that are lower than that, the lower the costs the better the profit. In a competitive market, there is normally a fairly clear price which things can be sold at set by the price the competition is charging.

Where does money for this come from? Simply, existing shareholders in a company which is making less profit get less money.

If a company is a monopoly with a captive market, the calculation is completely different. The question is "what price can we get away with charging without someone stopping us". The idea, in this case, is to try to increase the "percieved value" of the product (so people are willing to pay the price) and to increase the "percieved cost" of the product so that people feel that the cost is justified.

All of this is the reason why the statement from Microsoft is tantamount to and admission of being a monopoly, and further, given that this is a discussion about illegal overcharging, it seems like a clear admission that Microsoft intends to break the law again.

Re:Unavoidable

[NortWind]

Exactly, I wonder what the Slashdot crowd thinks should happen?

Microsoft has withheld $49 Billion [rednova.com]from its stockholders for the purpose of paying legal fees. Maybe they could use some of that, rather than raising prices. Just a thought.

Re:Well, I think it makes sense...

[argent]

What if you were running a small business, and for some reason, got hit with big fees of some kind?

If I were runing a small business and got hit with fines for violating the laws that regulated my business, say I was a hotel chain that got hit with a fine by the health department, and I raised my rates and put a sign in the lobby saying "we apologise for the rate increases, but the health department forced us to raise rates", and didn't actually do anything about what I was doing... how long would I be in