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Another $634M fine to follow if Microsoft does not comply by July 31st

The European Commission today fined Microsoft a whopping $375.4 million for failure to comply with antitrust rulings. The EU had previously fined Microsoft approximately $634.7 million in 2004 for taking advantage of its monopolistic position in the market.

The EU had previously told Microsoft to open up its code as well as open up its Windows operating system to competitors. The amount of the fine comes from the number of days the EU waited for Microsoft to comply. Having violating the ruling since December 16th of 2005 all the way to June 20th of 2006, the EU fined Microsoft at a rate of approximately $1.92 million per day.

Competition Commissioner Neelie Kroes told reporters that "Microsoft has still not put an end to its illegal conduct. I have no alternative but to levy penalty payments for this continued noncompliance." According to the EU, if Microsoft still does not comply by July 31st of 2006, it will be facing an heavier fine of $3.83 million per day. Microsoft however, says that the fines are unjustified. The company is currently appealing the decision.

Since then, Microsoft has responded to the EU with a public statement claiming "We have great respect for the Commission and this process, but we do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission’s original decision and our good-faith efforts over the past two years. We will ask the European courts to determine whether our compliance efforts have been sufficient and whether the Commission’s unprecedented fine is justified."

DailyTech previously reported that the EU would raise the daily fine cap for Microsoft if it does not comply. The EU decided today that it would penalize Microsoft anyway for the lack of compliancy during the last several months.

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Good
By Monkmachine on 7/12/06, Rating: 0
Not Good
By qdemn7 on 7/12/2006 7:58:15 AM , Rating: 1
This shows just how far the EU has drifted into Socialism. If I were Gates, I'd tell the EU to F.O. and pull out of the EU completely.

I have less and less respect for the EU every day. They're not embracing the market. The people don't want to work, or else they want the guarantee of a lifetime Government job. They're not even having enough children to replace themselves, yet they still expect their antiquated dinosaur of a social system to keep right on churning out the dole.


RE: Not Good
By Strunf on 7/12/2006 8:10:46 AM , Rating: 2
If MS pulls out it would sure be a problem for a few months but there's countless companies ready to fill the gap, actually Apple and Linux supporting companies would be more than happy for that, and the EU accounts for more people than the US so I really doubt MS would really no to OUR rules.


RE: Not Good
By ghost101 on 7/12/2006 8:23:50 AM , Rating: 1
I wouldnt mind if the MS pulled out. Using Apple's OSs wont be such a burden because software markets will develop to accomodate the huge change is OS shares of the market.


RE: Not Good
By BladeVenom on 7/12/2006 4:42:07 PM , Rating: 2
No, problem. They could all just switch to Apple. That would only cost in the 100's of billions for Europe to replace all their hardware and saoftware.

Then Europe would go from being dependent on Microsoft's software, to being dependent on Apples software and hardware . I doubt most would consider that a good alternative.


RE: Not Good
By segagenesis on 7/12/2006 8:16:57 AM , Rating: 2
While im not gung ho pro-MS I think on the same lines as you, although not to the point I consider the EU to be socialism. I find it stupid that they are arguing over the bundling of media player or IE (or was it just media player?) like it makes a difference on what people use. Netscape lost marketshare to IE because they sat on thier golden pedestal and did nothing for too long and Microsoft did what anyone does in a capitalist market, compete. Remember when you had to pay for Netscape?

Now as entertaining as your solution might be of Microsoft leaving the EU completely it's also rather impractical despite how much we read about Linux or alternatives being picked up... Microsoft depends on sales outside the US to, like any business wants to do, make more money. How much the fines would affect thier bottom line (or rather how they are even managing to enforce this?) I do not know and I imagine if it got to the point that the EU is unprofitable for them then they probably would do an exit, stage right. Quite interested in seeing how this one turns out...


RE: Not Good
By Spoonbender on 7/12/2006 8:43:30 AM , Rating: 3
Oh yes, that was what they fined MS for. For including Media Player. Odd though, that they still got fined even though they delivered an OS that wasn't bundled with it a year or two ago, isn't it?

Good to know that opponents of this fine are so well-informed.
Here's a suggestion, try reading up on what it was they were actually fined for before you comment.

To put it simply though, try making *any* application that interacts with Windows. It may be replacing IE as the built-in browser that's *always* used in some circumstances, it might be providing support for a different file system, or heck, it might just be an app that needs to pull some data from a Windows box. These communication protocols just aren't documented. A lot of functionality for a Windows system is just impossible for 3rd party vendors to deliver, because Microsoft won't open up the relevant API's/protocols/documentation.

"Like it makes a difference on what people use. Netscape lost marketshare to IE because they sat on thier golden pedestal and did nothing for too long"
If that is so, then how come 3rd party browser which are better than IE in every way today still only hold ~10% market share?
Bundling your own product obviously makes it harder for others to compete. Especially because *many* users don't know a lot about computers, aren't aware that alternatives exist.

Another question though, if you think Microsoft is competing fairly, where is my alternative?
Now, by alternative I mean a different product I could use instead of Windows. Where's my other OS that could run my games, MS Office, any other Windows app?

I can buy any brand of car, and it'll still work with the same kind of gasoline, on the same roads.
I can buy an AMD or Intel processor, and still run the same programs.
I can buy any electrical appliance, knowing that it'll plug into the wall socket. I don't need a different phone depending on who I want to talk to.
Every other market is standardized enough that it's possible to compete.
Only on the OS market does competition mean "develop your own damn infrastructure that's incompatible with ours"
Is that fair competition?
(And no, this isn't exactly what they got fined for. It's just an observation in response to the whinging that "Ohnoes, a US company got fined by a non-US entity. that is sooo wrong"

Funnily enough, I didn't notice any outcry when the US government fined MS for abusing their monopoly. Was it becaues the fine was smaller? Or because they were American, so "they're allowed to"?


RE: Not Good
By masher2 (blog) on 7/12/2006 9:00:03 AM , Rating: 3
> "if you think Microsoft is competing fairly, where is my alternative?"

In the Server OS marketplace-- VMS, Open-VMS, MVS, AIX, Solaris, MXS, HP-UX, Netware, OpenServer, IRIX, FreeBSD, OpenBSD, and a thousand different varieties of Linux. And countless others I didn't name.

> "then how come 3rd party browser which are better than IE in every way today still only hold ~10% market share? "

Because they're not *enough* better to justify most people taking the time to install them. If a browser browses...its good enough for the average Joe.

> " I didn't notice any outcry when the US government fined MS for abusing their monopoly. Was it becaues the fine was smaller?"

Primarily it was because a) Microsoft actually had a monopoly in the desktop market, unlike the server market the EU action is addressing. And b) because the DOJ demands were far more reasonable than the EU's "we-wont-tell-you-what-we-want-but-provide-it-anywa y" attitude.


RE: Not Good
By Spoonbender on 7/12/2006 9:06:53 AM , Rating: 4
"b) because the DOJ demands were far more reasonable than the EU's "we-wont-tell-you-what-we-want-but-provide-it-anywa y" attitude. "
That one is subjective at best, isn't it?
As far as I know, their demands have been pretty clear. "Documentation, so that others can use these protocols and API's".

Now, Microsoft has delivered a few thousand pages that might qualify as documentation, but didn't satisfy the latter part, of allowing people to actually use it. In other words, it was lousy documentation that just didn't make it any easier.
Next, they offered to open up their source code, which again doesn't satisfy the requirement. It's not a matter of being allowed to see what goes on inside a Microsoft product. It's simply delivering documentation that makes it possible for 3rd party vendors to deliver server products on an equal footing with Microsoft's own similar products.

And DOJ's "far more reasonable" demands haven't exactly had a big impact, have they?
So maybe they were a bit *too* reasonable?

"Because they're not *enough* better to justify most people taking the time to install them. If a browser browses...its good enough for the average Joe. "
Exactly. So Microsoft wins by default in *every* market. Simply because they have a dominating OS. That's not fair, it's not free market, it's not anything other than preventing competition.
True, it makes it easier for the lazy consumer, but it makes it impossible for other developers to even compete. Because the vast majority isn't going to even *see* their product.
If you look at the browser market again, sure, Average Joe has had his OS bundled with IE6 for ages now. And how much competition have we seen there? How much improvement? How much development?
None. No one can compete with a mediocre browser that's bundled with the de-facto monopoly OS.
Ok, in the last 3 years or so, Firefox has sloooowly been breaking out, but look at the pace, and look at how much time has been wasted with *no* improvements on the browser market. Then try to claim again that it's not a problem.


RE: Not Good
By masher2 (blog) on 7/12/2006 9:50:49 AM , Rating: 3
> "As far as I know, their demands have been pretty clear"

Then you don't know. Their original demand was for "all internal documentation and information". Microsoft provided it. After months of "review", the EU called it incomplete, saying it may not fully document what the source code was doing. So Microsoft offered licensed source code...the EU replied with a demand for free source code, and the creation of a whole new set of documentation.

Microsoft spent a year asking the independent trustee on the case to tell them *exactly* what was required. This was done in March of this year...and since that date, Microsoft has delivered 6 of his 7 required installments, and hopes to deliver the 7th by July 18.


RE: Not Good
By masher2 (blog) on 7/12/2006 9:55:01 AM , Rating: 3
> "Exactly. So Microsoft wins by default in *every* market"

It wins in the market in which browsing isn't critical. Nothing wrong with that...it doesn't hurt the consumer in the slightest. For people that truly want to pay for a better browser...better browsers are available.

Most consumers DON'T want to pay for a browser though. They don't even want to spend 15 minutes installing one. They want one that's good enough, period.

You have to understand a basic tenet of antitrust law. It exists to protect the consumer...NOT to protect competitors. The consumer is not being hurt by a free browser in Windows...not as long as they have the option to replace it with another one.

> "Ok, in the last 3 years or so, Firefox has sloooowly been breaking out"

More proof that competition exists, and is not being stifled. Hell, some people even PAY for Opera.



RE: Not Good
By segagenesis on 7/12/2006 10:39:44 AM , Rating: 2
Sigh. Microsoft and monopoly bring the worst out and people and I see far too many scathing rebuttles...

Since DailyTech doesnt like deeply nested replies I'll have to clarify who im referring to...
masher2
It wins in the market in which browsing isn't critical. Nothing wrong with that...it doesn't hurt the consumer in the slightest. For people that truly want to pay for a better browser...better browsers are available.

Ex-act-ly. Why this is even being argued with such religious ferver is beyond sensibility. You are not being forced to use IE with windows. Everyone can start screaming bloody murder monopoly HELP IM BEING REPRESSED once Microsoft stats disallowing you to run firefox.exe or opera.exe. It's like obese people complaining they are fat because of the food when the food does not just jump into thier mouths.

Spoonbender
So Microsoft wins by default in *every* market. Simply because they have a dominating OS. That's not fair, it's not free market, it's not anything other than preventing competition.

Chill out there, bro. While you are entitled to your opinion I think this has to be the oldest and most worn out excuse one can give. The vast majority of PC users use Windows and continue using it because they do not want to re-learn Mac OS or Linux. Imagine the training costs and productivity losses to corporations if Microsoft disappeared tomorrow. Please, think sensibly here in your arguments... even though it might seem unfair that Microsoft is the dominating operating system its not like the world is ending because of it either. Especially in the case of Linux or FreeBSD or even Mac X Server, it might be able to compete in the more tech savvy field of servers... there is no monopoly here by a long shot.

Linux for a desktop seems unviable as a replacement for Windows to the masses until there is alot more agreement going on between distributions. KDE vs. Gnome and x.org vs. xfree86 and something vs. somethingelse does not help the situation. Where I work if I put Ubuntu on my bosses desktop or anyone elses and said they could not use Windows anymore I would get fired.


RE: Not Good
By Hare on 7/12/2006 12:10:39 PM , Rating: 2
Opera has been free for a while...


RE: Not Good
By fsardis on 7/12/06, Rating: 0
RE: Not Good
By masher2 (blog) on 7/12/2006 7:02:43 PM , Rating: 2
> "*clap* *clap* I bow to your ignorance. So tell me the last time you ordered a pc from dell which one did you chose? win xp or win mce? cause still i cant find the linux option.
and i case you didnt know, most people will buy a Dell.
nice free choice eh?

Lol, you totally missed the EU action is concerned with the SERVER MARKET. A point the ill-informed in this thread seem to continually miss.

To further compound your ignorance, even Dell ships servers with several different choices of OS. Red Hat Enterprise and Suse LINUX among them.

Oops.


RE: Not Good
By maxusa on 7/12/2006 3:39:56 PM , Rating: 2
> how come 3rd party browser which are better than IE in every way today still only hold ~10% market share?

This is such a generalization, which is also false. Let me ask you how did you determine that a "3rd party browser" is better than IE in every way? Which ways did you consider?

Let me tell you one particular way that I interact with on a daily basis - software development. Based on my personal and my web development team's experiences, IE6 is "better" in capabilities, interop, integration, and compliance perspectives than most other browsers. There are advantages these other browsers hold over IE, but generalizations like yours are incorrect.


RE: Not Good
By TomZ on 7/12/2006 8:23:53 AM , Rating: 3
Nah, Microsoft wouldn't do that, after all, they are a business, not a political body.

What Microsoft probably will do, however, is realize there is a higher cost of doing business in Europe, and pass those higher costs along to European consumers. I don't see any reason that Microsoft should absorb these unreasonable costs out of its profits. If the EU wants to fine Microsoft, then it would be fitting if the fines were paid for by EU consumers.


RE: Not Good
By raven3x7 on 7/12/2006 9:03:01 AM , Rating: 2
Difted into Socialism? The EU? LMAO YOu got to be jocking.


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