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Rory Cellan-Jones

Bill v Brussels (round 47)

  • Rory Cellan-Jones
  • 27 Feb 08, 17:03 GMT

It鈥檚 an eye-watering sum of money. 899 million euros 鈥 that鈥檚 $1.35bn or 拢675m. The latest fine imposed by the looks like a record-breaker 鈥 I certainly cannot find an example anywhere around the world of a bigger penalty imposed on one business. By comparison, the biggest fine in Britain was the 拢121.5m the Office of Fair Trading ordered British Airways to pay for its role in fixing fuel surcharges.

Windows XPThe European Commission says that Microsoft is the only company in fifty years of regulation to have refused to comply with an anti-trust ruling 鈥 and that is why the fine is so high. But many people have contacted the 大象传媒 鈥 in particular from North America - to complain that Brussels is now involved in a vendetta against Bill Gates鈥 company and is simply punishing a successful American business.

鈥淎nother example of the inflated and out of control ego of the EU!鈥 says one Canadian e-mailer. 鈥淢icrosoft should get out of Europe and take all their software and support with them. I really don't think that Bill needs their business that badly.鈥

But you could argue that the EU has simply taken the baton from the US Department of Justice 鈥 which under the Clinton administration wanted to break up Microsoft 鈥 and proved more successful in curbing the software giant鈥檚 monopolistic tendencies.

That is certainly how they see it in Brussels. Someone close to the case put it to me like this: 鈥淲hen the Bush administration came in, the Department of Justice chickened out, and let Microsoft off the hook.鈥 By contrast, he explained, Brussels had actually forced Microsoft to change its behaviour, pointing to last October鈥檚 statement making it clear that the company would now comply with .

And indeed Microsoft does not seem inclined to take its ball home in the way the Canadian correspondent suggests. This very afternoon it is holding a major event in London to launch its Windows 2008 server software, and its reaction to today鈥檚 fine makes it clear it now wants to make peace. No angry denunciations from Microsoft executives 鈥 just a statement which included this line: 鈥淎s we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are focusing on steps that will improve things for the future.鈥

So whatever you think of that eye-watering fine, you cannot deny that Brussels has landed some effective blows on Bill Gates鈥 company and 鈥 by Microsoft鈥檚 own admission - forced it to change the way it does business.

Comments

Isn't this so much like EU V.A.T. on Microsoft Windows?

So what are they going to do with the money?

Give it to Open Source development?

I don't think so.

  • 2.
  • At 07:07 PM on 27 Feb 2008,
  • jamie wrote:

i just glad that microsoft is being shown how ever big they are they will be treated the same as everyone else and that they can't just walk all over anybody they like

  • 3.
  • At 08:21 PM on 27 Feb 2008,
  • Neil Williams wrote:

I am always surprised at the anti-Microsoft views expressed by people, the vast majority of which are running Microsoft O/S and software of some kind ( legitimate or otherwise )

There are many ways to lead a Microsoft free life instead of whinging and whining endlessly on about how bad Microsoft is.

Do us all a favour and use something else if its so bad - Linux or a MAC maybe.

If more people followed what they preach, perhaps the market share owned my Microsoft will reduce and we would not even be having this discussion.

  • 4.
  • At 01:08 AM on 28 Feb 2008,
  • Clive wrote:

Bravo the EU. It seeks to represent our interests more energetically and effectively than our own government. Let Microsoft takes its ball home, the mass of people would then begin to realise that there are free, more secure, operating systems and applications available that can easily meet their everyday computing needs. That's why Microsoft don't take their ball home, in spite of jingoistic encouragement from the American continent.

  • 5.
  • At 01:32 AM on 28 Feb 2008,
  • howard wrote:

The Europeans are so stuck up on utopian ideals that people actually think punishing innovation and success is a good thing.

This whole EU v MS thing is not about anti-trust. It is about the EU using executive and legislative power to support its own ailing and failing technology industries in face of US competition.

I have worked in both US and Europe. There is no doubt that US companies are a lot more competitive in each and every way, from HR management down to customer service. Europeans are spoiled with long holidays and cushioned labour laws.

To be able to compete with the US or for that matter China and India, they are now resorting to using governmental protectionist muscle such as fining MS, VISA, BOEING..., going back on WTO agreements and imposing quotas on Chinese textiles, shoes, toys, and what next?

Perhaps the solution is just as what the EU mandarins are prescribing - build up a Fortress Europe, let Europeans continue to claim as much social benefits as they want, let productivity and competitiveness continue to sink, have 6 months holidays if need be...

Good luck Europe! may Brussel continue to protect all of you forever.

  • 6.
  • At 11:00 AM on 28 Feb 2008,
  • Paul Smith wrote:

There has been an even bigger fine (although I am unsure if they got off) Exxon Mobile for an oil spill in 1989. $2.5bn

Im glad MS have been fined - nice to see the EU have some bottle unlike the US.

  • 7.
  • At 11:43 AM on 28 Feb 2008,
  • Gavin wrote:

Howard, post #5:
"The Europeans are so stuck up on utopian ideals that people actually think punishing innovation and success is a good thing."

The whole point is to allow other companies to create products that will work with Microsoft's operating systems. If anyone is stifling innovation, it's Microsoft, by ensuring that only their products work seamlessly with their OSs.

  • 8.
  • At 02:21 PM on 28 Feb 2008,
  • Chris wrote:

"Microsoft must offer a stripped-down version of its Windows operating system minus the firm's MediaPlayer audiovisual software within 90 days. "

Why do any of these EU idiots think anyone would want to buy an operating system with no media player, or no browser, or etc. etc.

If I want a different one I'll upgrade.

It's like having to buy a car with no tyres because there are rival tyre makers who don't get a look in.

  • 9.
  • At 02:36 PM on 28 Feb 2008,
  • Bryn Roberts wrote:

So, a company is told "work harder; get better; get bigger; become the market leader", and is then told "You're the market leader; you're monopolising the market; you're anti-competitive; you're being fined."

I don't understand why so many people have a huge downer on Microsoft - we all use their products (with occasional problems) - what's the problem with them dominating the market? If someone comes along with something better, that outsells Microsoft, do people rejoice, for the Evil One has been toppled, or claim that the new company is now monopolising the market, anti-competitive and therefore should be fined.

It seems the message is: if you're rubbish, you lose; if you're really good, you lose; if you're mediocre, you win. There's something wrong there!

  • 10.
  • At 04:34 PM on 28 Feb 2008,
  • Sam Cook wrote:

There are many big companies that do very well (eg google, apple, bp, shell and pretty much any bank) but there comes a time when a lot of big companies forget that they still held by the law.

Its one thing to do well its another to then achieve a position of power and essentially use that to try and crush any competition that exists; to use the car analogy would you buy a car that won't take anyone else's standard tires?

I use XP very grudingly now - I have a linux computer that is much nicer to use and as soon as I have the software in place I will only be using windows when I have no other option.

I think the EU was right to force this fine. MS has been ruled to have broken the law, whether the law is correct or not it has still broken the law and she pay up for it.

As for fortress EU - yes there are some frankly stupid laws on imports.. but the US does the same as does pretty much every country that can its one of the easiest ways of keeping your populace happy by making sure they have jobs.

Oh and yes I would love a version of XP that doesn't have media player or IE they are both horrible programs that I don't use.

/rant

  • 11.
  • At 05:17 PM on 28 Feb 2008,
  • Matt R wrote:

I'm glad the EU has the guts to pursue Microsoft. The heart of the problem is that software is unlike most other industries -- due to compatibility issues and end-user inertia, there is scope for monopolization that cannot arise in other businesses. This is extremely disadvantageous to Joe Consumer -- it means that virtually the entire digital world is in a blind lock-in to one vendor. We are completely at their mercy. For an example of how dangerous this is, take the problem of archiving important files: if you are reliant on a (closed) Microsoft file format, there is no fool-proof way to ensure that you will be able to read these documents in the future -- what if you cannot obtain a copy of Word 97 -- what if Microsoft in the year 2020 refuses to help you out, and insist that you upgrade to Office 2020 instead? (Which you know will be totally unable to read them). The solution is to promote open standards -- and if Microsoft do their level best to subvert this cause (and they do, believe me), than they must be held to account.

  • 12.
  • At 06:12 PM on 28 Feb 2008,
  • t001 wrote:

I don't understand the fine, Microsoft are just doing there job and I think they should offer extra programmes so people get their value for money.

I do agree that Microsoft should do more for open source but this fine is way out of proportion and probably won't go towards helping open source.

Also if your fining Microsoft then you should fine Apple as well. They include their own web browser a media player but nobody complains.

  • 13.
  • At 06:51 PM on 28 Feb 2008,
  • JDEdward wrote:

There is a saying. It is very easy to make money if you already have it. First of all you can pay for expensive lawyers and accountants which will help you find loop holes in legal/tax rulings. Secondly you can use that money to create a lot more money by creating your new products. Thirdly you can pay for costly patents etc for your items/intellectual property.

You can read that in two ways. You could read into the above the great entrepreneurial aspects of the vision. You live out the American dream by becoming wealthy, you can pay to protect yourself from law suits and ensure that anyone who owes you pays up. Using your profits you can expand perhaps into other marked segments and easily finance R&D on new products and ideas. If you do it right you can retire and live out your days with few financial worries.

But you could read into it something much more negative. Even if you start out with good intentions as outlined above, money and power are very corrupting influences. You can use those smart lawyers to heavily penalise anyone who merely tries to break into your field. You can make life very difficult for smaller people who would have liked to have followed in your foot steps. Your accountants can figure out nifty ways of escaping even the smallest tax bill. What is worse, you can take other peoples ideas and patent them first ensuring that you can then make them pay for the use of their own idea, or simply just make their product and put them out of business for good.

If you find yourself with a lot of power and money you will not want to give it up without a fight. Being dominant gives you not only control but also limits everyone else's choice. If you don't have any real competition what stops you from reducing the quality of your products and services and raising the price of them just to make lots of lovely money?

I have not made a judgement as to which one of these two Microsoft is although I do have my suspicions. I am merely stating that power and money can do strange things. If you find yourself with a lot of power and money you will not want to give it up without a fight. Without appropriate checks and balances even the most loyal supporters of a company could end up with a very bad deal and the most fair company can become possessed by chasing the green.

JDEdward

  • 14.
  • At 07:04 PM on 28 Feb 2008,
  • Thomas Brownlee wrote:

I use Windows XP Media Centre edition.

I use Firefox for my browser because I like it more than Internet Explorer, but I'm yet to find a Media Player I like more than Windows Media Player 11.

Removing it just adds the extra hassle of needing to download it from their website for free. It also adds the problem for people who maybe can't figure this out.

  • 15.
  • At 07:07 PM on 28 Feb 2008,
  • Ewan wrote:

Bryn Roberts @9 - It's really not complicated. The competition authorities don't have a problem with success, and they don't have a problem with a company having a >90% market share, /if/ and it's an important if, that dominant player acts fairly and competes and wins on its merits.

The problem with Microsoft is that that's not what they've been doing; they've using a win in one market (desktop OSes) to force there way into other markets (browsers, media players, servers etc.) even where the MS product is (at least arguably) worse than the competition. No matter how good the alternative is MS can stifle it by changing Windows on the desktop to break it, leaving the consumer no option but to go with them. That's exactly what they've been doing, and that's why they received and deserved, this fine.

  • 16.
  • At 07:09 PM on 28 Feb 2008,
  • Cris wrote:

I don't think it is a matter of how good/bad the operating system is, as many people seem to argue.

It is more a matter of Microsoft abusing its dominant position... as a matter of fact, the EU ruling doesn't state it is fining Microsoft for bad software, but for bad behavior

And bravo to the EU who recognizes that large companies do behave too aggressively and as a result makes harsh rules that check that behavior.

As a side note, it has been mentioned that there are "more secure" O/S's or that most people run Windows anyways. This is simply not as relevant as the argument regarding the fair environment available (or not available) in which new software businesses can fairly compete and make revenue based on innovation. Yes, Microsoft is innovative, but it is also abusive.

And furthermore, it is not the domination of the market for which Microsoft is being fined, it is for some of the practices it uses to maintain that position.

  • 17.
  • At 08:04 PM on 28 Feb 2008,
  • Laurence wrote:

鈥淎nother example of the inflated and out of control ego of the EU!鈥 says one Canadian e-mailer.

As opposed to the inflated and out of control ego of Microsoft? The dominance, obfuscation and insecurity of Microsoft products causes enormous problems in the IT world, problems which people take for granted because they aren't aware of the alternatives!

And, to Neil Williams, I do use something else. I'm entirely Linux based at home, and virtually entirely Linux based at work (there's one last Windows program which, sadly, we can't do without - a common problem!) and I've not missed it. After a slight learning curve, Linux allows me to do far more with my computer, more easily.

That said, I do agree to some extent with what Chris (comment 8) said, forcing Microsoft to release a version of Windows without Media Player, without IE etc is not the best way to go about it, however if an OEM took these versions of Windows, and added Winamp or VLC and Firefox or Opera, then I can see it being worthwhile. A much better response would be to force Microsoft to release the speces for the various file formats used (wmv, doc, xls, asf and so on) - I can't see this happening though, as even Microsoft often don't know how their file formats work.

  • 18.
  • At 01:20 PM on 29 Feb 2008,
  • Julian Sweet wrote:

Howard you just sound like someone bitter about the credit crunch and the strength of the Euro!

You cannot blame europe for America abandoning President Clintons policies. The economy was better, the world was more peaceful and Microsoft would of been broken up.

Half of America is truly a great country of brilliant innovation and enterprise. We all owe that half a hell of alot!

  • 19.
  • At 02:45 PM on 29 Feb 2008,
  • Gary wrote:

With the army of lawyers Microsoft have, do you think they would have been fined if there was even an inch of evidence that they were not doing something illegal? Microsoft have been caught blatantly trying to keep their market dominating position by using illegal business practices. Good on the EU. Microsoft learn the lesson quickly or you will sink faster than you already are.

  • 20.
  • At 05:01 PM on 29 Feb 2008,
  • Alan wrote:

Does Apple not have an unfair avantage with mp3 players? They are doing the exact same sort of thing. Microsoft are abusing their market position by not allowing more innovated products on their OS, but excuse me, is their not only one product avainable to sync. your music to the ipod? Is there not only one online store to purchase your music? and both of these are owned by apple. You could argue that value of these two markets is completely different, but with an 82% share of portable media players in the US, the problem is the exact same.

This fine just screams of the EU trying to say they are bigger and better, rather than actually help the smaller guys in the market. Companies are fined all the time, but I have alway wondered where the money then goes?

On the note of people slating the Microsoft OS's, saying they are insercure and such, to a hacker why bother to go for something else? More time and effort is aimed hacking Microsoft. Nothing is perfctly secured. Furthermore, the vast majority of people use, and like to use Windows Media Player and/or IE. Why remove it, if someone prefers a different client then why can't the minority download it? Not once, not saying they wouldnt if they could, have microsoft stop other media players and/or internet browsers.

Linux, yeah well if you good with computers then fantastic you can make it more personal, but owning a PC doesnt automatically mean i also want to learn everthing about. I own a car, but appart from the basics, I'm no mecanic.

  • 21.
  • At 06:05 PM on 29 Feb 2008,
  • Ed wrote:

I bought a new car recently. I had no choice about the radio, I had to have the one the manufacturer had pre-installed. I had no choice about the sat-nav, again having to use the one the manufacturer pre-installed. how is this different to pre-installing software on a PC? Car manufacturers have now intergrated radios to the point that they cannot be replaced. Back in the 80s you could at least put a new radio in the standard sized slot. I cannot get the brakes changed at KwikFit because a special computer is needed to release the brake calipers and the manufacturer will only sell this to authorised dealers. It costs over 拢800 for all four wheels.
On a PC I can get rid of what I do not want and replace it if I choose. It might be a hassle, but I can. With my car I do not have this option. Why is the EU so obsessed with Microsoft and not the German car manufacturers that are stitching up their markets be removing as many "standard" parts as possible?

  • 22.
  • At 01:17 PM on 01 Mar 2008,
  • Craig Eastman wrote:

Why are Microsoft being punished exactly? As a European PC user I am well aware of the other, entirely viable options open to me in the form of competing packages for media playback and internet browsing. Maybe if companies like Mozilla and their peers spent some money on advertising via traditional media (like, say, any other type of product manufacturer has to) they could spread awareness of their products to the other 80% of the populous who aren't so tech-savvy. I am frankly embarassed at the fines imposed on Microsoft; a company who have achieved their current status by working hardest and being the best and brightest in their field.

  • 23.
  • At 04:18 PM on 01 Mar 2008,
  • David Heron wrote:

This is just about the EU using Microsoft as a cash cow. What have they done about Apple and Ipods for goodness sake? Who do the EU represent anyway? Nobody elected them, they don't represent any country in Europe yet somehow speak for us as though "Europe" is a country. I know that's the goal what with a flag and an anthem, but the fact remains we are a collection of countries and each has their own elected government.

  • 24.
  • At 11:55 PM on 01 Mar 2008,
  • T wrote:

IPODs I do not believe compare. You pay for a piece of hardware the plays music/video. The software that gets media onto it is free. As far as I know, you can also play regular MP3s on the device too, so there no lock-in. I think there is loads of vendor lock-in with DRM protected content, so nothing special about ITunes there.

The anti-competitive evidence against MS is in abundance, and has been cropping up for over 10 years now. One of the worst in my mind, is when they signed up (with many other vendors) to use the Java specification, and bundle their own support for it in IE 3 and later.

They produced great a development tool for it (Visual J++), but with one really major problem, any GUI based programs you wrote in JAVA would only work on Windows platform!

Yep, they took a technology to allow programs written to work on any platform, and used their excellent market reputation to distribute tools to would break the 'write once run anywhere' principle of the technology. Needless to say, Sun Micros. claimed against them on this, and they lost the right to bundle their own Java products after 2001.

Just about all other vendors managed to keep to their license agreements, and produce some excellent Java products in the process. (IBM, Oracle, BEA, Symantec etc)

Luckily they didn't manage to break 'Write Once, Run Anywhere'

..and they are happy with their own principle that they use the their .Net technology of:-

'Write in any language, run on Windows!'


Can you see the tie-in?

T.

  • 25.
  • At 03:10 AM on 02 Mar 2008,
  • johno wrote:

There have been many analogies used to explain Microsofts dirty tactics to non-technical people. Most of them don't really paint an accurate picture. This is how I explain it to people who ask me about this anti-trust thing.

Think of Microsoft as a company that controls all the traffic lights operating at junctions all over a continent. This same company also runs a transportation company with buses and trucks. In the past they abused their power over the traffic lights to prevent rival companies from making deliveries on time. Now all the rival companies are gone and they are abusing their power over the traffic lights to prevent motorists from getting where they want to go on time. They're trying to get everyone to use their buses for all private transport. They're NOT making anything better for anyone except themselves. That's not innovation.

  • 26.
  • At 01:22 PM on 02 Mar 2008,
  • Fion wrote:

The EU is simply syphoning money from Bill Gates illustrious coughers, Rather than remand and punish big business the EU should be working with these companies to promote economic excellence

  • 27.
  • At 03:04 AM on 03 Mar 2008,
  • shanee wrote:

Reading some of these posts is pretty funny.
What you seem to have forgotten is that Microsoft has gone ahead and broken the law of the land. If anyone broke the law, either by speeding or committing murder, you would expect them to be punished for it.
It should not matter if that person is a millionaire or has no money at all. The same has to be practiced with Microsoft.
Further more, Microsoft's practices have for years been squeezing out other companies and reducing our choices. This is not 'innovation' or 'good business'. Netscape closed this week and was pushed under by the aggressive and illegal bundling of Internet Explorer with other software in the nineties. Then it was real player squeezed out by WMP. If Microsoft keep going without being stopped, there wont be any choice.
The result will be tantamount to a communist state: Things keep on going with one choice and one choice only. This is not the way that I want to see my computing experience go.
For those of you who think that microsoft should shut up shop in Europe and push off, it may surprise you to find that Europe would survive without Microsoft. Linux has and is being adopted in many areas as a real viable alternative to Windows and their doing that would just further push people in that direction. In fact Microsoft would fear exactly this. Their stance in Africa with the $100 laptop project outlines this.
In addition to this, there are versions of Linux that are being adapted by several up and coming countries in Asia with the intention of replacing Windows as the primary OS. This includes economic super powers India and China.
I know that there are going to be people who are going to respond by telling me that I should stop using windows then. In anticipation of this response, I am simply going to say that I use a Mac. I still use Microsoft Products where my work demands it, but my machine of Choice would not be one with Microsoft Software installed.

  • 28.
  • At 07:34 PM on 03 Mar 2008,
  • wrote:

Microsoft does not get the Web. They do hire very smart people just as Yahoo and Google do, but they do not provide the freedom to help the users. Their focus is to just help the paying customers.

This basic difference between MS and Yahoo will mean that most of the engineers from Yahoo will leave as soon the the merger is done.

I wish EU can find a way to block it before it happens. Yahoo on its own is precious. Yahoo will find a way to create on its own without MS.

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