backtop


Print 54 comment(s) - last by purefat.. on Jul 10 at 8:03 PM

Software giant balks at penalties

The European Union appears set to keep its hard-line stance against Microsoft’s allegedly anticompetitive tactics, and it is insisting on imposing a €899 million ($1.36 billion USD) fine on the company to keep its future actions in line.

Microsoft’s lawyers disagree, however, and entered a variety of arguments last May that the fine is too high, and was entered based upon “manifest errors” in the EU’s process. With copies of the arguments released publicly earlier this week (PDF), its demands to annul the fine are now available for perusal worldwide:

  • The EU “erred” in its decision to subject Microsoft to regular, periodic fines while the company released copies of its interoperability specifications, due to the fact that Microsoft’s pricing for the documentations was not in line with the EU’s definition of “reasonable,” – the EU never explicitly stated what it considered a “reasonable” price to be.
  • Further, licensing rates for information on its proprietary protocols – despite not passing the EU’s benchmark of reasonability – were more than 30 percent lower what industry experts PriceWaterhouseCoopers determined to be a fair price for “comparable technology.” (Ars Technica questioned this finding early last year, noting that in many cases ‘comparable technology’ was open source, and therefore free.)
  • Microsoft should not have been subjected to a “heightened patentability test,” where the innovation of its trade secrets was placed under scrutiny in order for the EU to decide whether or not Microsoft should have charged royalties for the use of its trade secrets.
  • The EU based some its assessment reports on documents obtained that courts later determined to be “unlawful.”
  • Microsoft was denied its “right” to be heard due to the EU’s failing to give Microsoft the opportunity to speak up after the period for which it was fined, preventing the company from “commenting on all relevant aspects of the case.”
  • And, simply, the fines imposed are “excessive and disproportionate,” particularly due to the fact that the EU chose to challenge its licensing practices.

Additionally, Microsoft previously appealed the fine to Europe’s Court of First Instance last May – however little has developed in the appeal since its filing.

The company’s trouble began in 2004 when the EU demanded Microsoft provide competitors the ability to connect to software running under its Windows platform (applications like Exchange and Active Directory). Third-party attempts to connect to Microsoft technologies have, typically, been written by reverse engineering the company’s communications protocols.



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

Fight and win
By FITCamaro on 7/9/2008 7:34:04 AM , Rating: 4
My attitude is that even if the fines aren't repealed, Microsoft simply not pay them. What can the EU do? Make using and selling Windows illegal? Make Microsoft close its European offices? Darn, more jobs to come back to the states.

F*ck you EU and your attempt to use Microsoft as a piggy bank to pay for your government programs. "Hey we need a few more hundred million. Where can we get it?.....Fine Microsoft again!"




RE: Fight and win
By FaceMaster on 7/9/08, Rating: -1
RE: Fight and win
By Aloonatic on 7/9/2008 7:53:11 AM , Rating: 3
Yeah, pull out of the EU entirely.

Most Windows and Office products on EU systems are pirated anyway.

Luckily China and India etc all use legitimate copies, so MS will be fine.

MS shareholders will be delighted at the news that they have lost 500M customers in the developed world over night.

$1.4BN does seem rather steep however.

I can't wait for my payout as an EU "citizen".

Happy Days.

*rubs hands together awaiting cheque through the door and anticipates the Intel Fine.

Who's next?


RE: Fight and win
By ikkeman2 on 7/9/2008 8:38:41 AM , Rating: 3
$1.4billion / 500million poeple = < $3.00 per person...

< €2.00

* scratches behind his ear and goes to take a leak


RE: Fight and win
By Aloonatic on 7/9/2008 8:46:32 AM , Rating: 2
Oh no

It's only £1.44 per EU Citizen

And I've already paid a down payment on my speed boat :-s

Curses


RE: Fight and win
By MrBlastman on 7/9/2008 9:28:32 AM , Rating: 2
You know, on many levels, pull out of the EU is exactly what they should do. But, I would only attempt this if Bill and Steve were to remain at the helm.

It is clear they are unwanted there so they should just jump ship. Ignore the fact that most US businesses use Office and Microsoft products - just run away.

The EU would then be forced to either:

a. adopt something else - and get the rest of the world to do it
b. suck it up and let Microsoft back in

Either way, weather you are a Microsoft lover or hater, it would be an interesting drama to watch indeed. More interesting than say - you stepped on my line in the pavement, I'm suing you!


RE: Fight and win
By Aloonatic on 7/9/08, Rating: 0
RE: Fight and win
By bnutz on 7/9/2008 11:06:51 AM , Rating: 3
Then they would just go after Apple, which I am surprised they have not done yet since they do they same thing with their software.


RE: Fight and win
By SiN on 7/10/2008 2:10:38 PM , Rating: 2
I cannot wait for Apple to be disected and scrutinized... its far overdue!

Shame on the EU, they have overstepped the mark... but then again, so have microsoft, just not lately.


RE: Fight and win
By Screwballl on 7/9/08, Rating: 0
RE: Fight and win
By Strunf on 7/10/2008 6:31:16 AM , Rating: 2
The EU would pick a... and btw the rest of the world as you call it is eager to change to something else than windows, who knows if the EU wouldn't start the global trend...


RE: Fight and win
By lynxss on 7/9/2008 11:02:22 AM , Rating: 1
Just think, if they'd just paid the original fine instead of trying to fight it, they would have saved $500 million or so from the currency exchange before the dollar tanked.


RE: Fight and win
By Amiga500 on 7/9/2008 8:04:17 AM , Rating: 2
Are you pissed off or stupid?

Microsoft exits Europe => Another software company/organisation steps in and provides a widely used and well supported alternative to windows.

What would happen if ubuntu reached a 'critical mass' user base, and 3rd party developers started going for linux software in a big way? With drivers following from ATI and Nvidia.

The rest of the world would soon follow. Something like that *could* kill windows within 3 years.

That is Microsoft's worst nightmare, not a fine from the EU.


RE: Fight and win
By RandallMoore on 7/9/2008 8:19:20 AM , Rating: 2
Im not sure you realize just how much of the material world runs off of MS software... Before anyone says it, YES i do understand that there are ALOT of servers out there that run UNIX and linux. But seriously, linux is garbage when it comes to serious business productivity. Its sometimes nice for IT pros i.e. programer, web design, network admins, etc etc. As a whole though, the world revolves around MS and they know it.


RE: Fight and win
By Amiga500 on 7/9/2008 8:32:35 AM , Rating: 3
As a whole though, the world revolves around MS and they know it.

Yeap - thats kinda my point.

If people **had** to find alternatives, then MS's position with regards compatibility, reputation, penetration & support is all under severe scrutiny.

There are alternatives to windows and MS software - its just that businesses & home users like to know things will run on their machine. If MS loses that stranglehold, they lose a lot of the reason people buy windows in the first place.


RE: Fight and win
By crimson117 on 7/9/2008 11:56:28 AM , Rating: 2
Define "serious business productivity" ...


RE: Fight and win
By mindless1 on 7/10/2008 11:06:57 AM , Rating: 2
I hateo to break it to you, but EU doesn't matter, nor does America. If China and India cultivate an adoption of 'nix then things will change quite a bit in the next 10 years. Yes, it'll take years, just as MS didn't get this popular overnight they won't fold from a few billions in fines or losses of fractional markets.

Linux is great for serious business productivity. Maybe you meant home use instead? Typical business systems are locked down, fixed application base, almost ideal for linux except for a need for more high quality administrators that know how to support it and still do the hand-holding at the same time since most linux admins seem to pretty much hate average joe users.

Think about what the typical office machine does. Email? Check. Browser? Check. Office? Check. Of course there are going to be certain mission critical applications that only support certain OS, and those certain OS are most likely to be in the Windows NT family if recently released but what made windows what it is? A lot of momentum by the industry, not by MS. Widescale adoption, just like you could see in India and China.

Linux has already evolved beyond what Win9x was with exception of a few usability features. An OS with minimal commercial development for the PC sector has eclipsed what MS had accomplished during Win9x era with millions of dollars pouring into it regularly. There's no denying a future where it becomes cheaper to do the everyday things that people need to do with PCs and MS doesn't understand that as shown by an ever increasing hardware base on Vista just to do those things. What did the world need? A fixed interface, not changes like with Vista, so there was no retraining to do the same things. What else? More security, to decrease user burden not increase it like Vista does with the nagging or deactivation of certain OS components. What else? Lower footprint and computational demands than XP, not higher - because low power light weight cheaper greener systems are in our future.

MS really doesn't get it. Everything and the kitchen sink is definitely a geek's delight but most of the world are not computer geeks.


RE: Fight and win
By SolidSteel144 on 7/9/2008 8:24:08 AM , Rating: 2
Linux is not that bad...
Sure it kinda feels like a lot of free stuff glued together with Elmer's glue. But it's an OK OS.


RE: Fight and win
By RandallMoore on 7/9/2008 8:33:55 AM , Rating: 1
And I'll agree with you. Linux isnt a bad OS at all. Sure its complicated, Open Source, pretty secure, and most of all FREE :)


RE: Fight and win
By MrBlastman on 7/9/2008 9:33:15 AM , Rating: 3
At the command-prompt, UNIX/Linux/BSD etc. can't be touched by Windows.

At the GUI level... this is where UNIX/Linux/BSD fall flat. Sure, there are some features that have been around in X11 for years that Vista just finally got around to implementing, but, there are many more that they lack either in usability or fluidity of control.

I own a Macbook and a PC - I'd go so far to say they both have their own stupid share of problems, but, when it boils down to daily use - I still prefer Windows XP. Granted, this is Mac OS, it is a wide-scale usage of a GUI on a BSD platform.

From an admin perspective for servers/automation/programming/logic - I would pick any UNIX/Linux/BSD etc. variant without even thinking twice. For productvity, they still have a long way to go (but are diligently working towards it).


RE: Fight and win
By ElBrujo on 7/10/2008 4:30:04 AM , Rating: 2
I haven't used PowerShell to its fullest, but it's a pretty impressive start. I'd imagine that the GUI version of PowerShell 2 offers even more...


RE: Fight and win
By enlil242 on 7/9/2008 8:24:12 AM , Rating: 2
quote:
What would happen if ubuntu reached a 'critical mass' user base


LOLLL, only if they gave it an AOL user interface.. Then, maybe... Remember, the "masses" are full of technological ID10Ts!


RE: Fight and win
By MPE on 7/9/2008 9:39:23 AM , Rating: 1
quote:
full of technological ID10Ts!

Did 'ID1OTs' required a college degree from the University of Dumbass?


RE: Fight and win
By Polynikes on 7/9/2008 9:38:08 AM , Rating: 2
The EU's fines have been unreasonable against MS. I agree with you, they shouldn't pay a dime.

Oversight like they have here in the US might be OK, but exorbitant fines? That's just greedy government.


RE: Fight and win
By Polynikes on 7/9/2008 10:21:08 AM , Rating: 2
I forgot to mention... If they're doing it for the customers' benefit, you know, since MS "screwed" the europeans, then there should be some form of tax cuts so they can get their money back.

But clearly that's not the case.


RE: Fight and win
By Aloonatic on 7/9/2008 11:11:27 AM , Rating: 3
That's always been the thing that I have never understood about these "fines".

For example, In the UK we have a lousy rail network, which you would think would be sorted as we all know that trains will save all the polar bears and seals from certain doom.

They were privatised, but they still go to the government for money when it doesn't work out for them. The shareholders still get their payouts however, even though they miss targets and deadlines so they get fined by the government, but then have to get loans and handouts from them as well???

Madness, where does this money go???

I'm no fan of the EU by the way.

This money will probably go to the friends and families of the EU/EC in dodgy handouts and "jobs" where their useless nephews turn up for an hour a week and get a yearly salary.

The EU is a terribly corrupt monster hell bent on creating a European super state (they already have a flag and an anthem, what more do they need?!?) and wants money to grow and expand.

I guess the other winners (apart from unemployable idiot relatives of MEPs and such) from this will be the former Eastern Block nations in the Europe who have joined the EU and need to be bought "up to spec" with lots of nice new roads and such like.

In saying all that, it's not just the EU who don't like large companies behaviour, including MS and Intel.

Most similar bodies to the EC/EU have had investigations into business prectices and such like.

The EU will always be the highest fine however as:

a) It is pretty damn large, nearly 500M people (that's continent though I think, not the EU but you get what I mean?)

b) Everything's more expensive over here.

Queue flaming about choosing to live in a socialists paradise etc etc etc....


RE: Fight and win
By Some1ne on 7/9/2008 3:37:20 PM , Rating: 2
While you may have a point, it's hard to agree with you given the piss-poor arguments that Microsoft is using in its appeal. For example:

quote:
The EU “erred” in its decision to subject Microsoft to regular, periodic fines while the company released copies of its interoperability specifications, due to the fact that Microsoft’s pricing for the documentations was not in line with the EU’s definition of “reasonable,” – the EU never explicitly stated what it considered a “reasonable” price to be.


Um, if the courts order you to submit copies of your interoperability specs, you'd damn well better not try to charge them for it. If you do, you're just asking for them to drop the hammer on you.

quote:
Further, licensing rates for information on its proprietary protocols – despite not passing the EU’s benchmark of reasonability – were more than 30 percent lower what industry experts PriceWaterhouseCoopers determined to be a fair price for “comparable technology.”


Their argument admits that they failed to meet the benchmark. That's not going to work, regardless of what PriceWaterhouseCoopers says. If MS feels that the benchmark is unreasonable, and has evidence to back it up, then they should challenge it in a seperate suit instead of trying to make the complaint as part of their appeal. Flat out admitting that you failed to meet the benchmark is not the way to win an appeal, no matter how unfair you think the benchmark was. Next.

quote:
Microsoft should not have been subjected to a “heightened patentability test,” where the innovation of its trade secrets was placed under scrutiny in order for the EU to decide whether or not Microsoft should have charged royalties for the use of its trade secrets.


Why shouldn't they have been? Because it didn't play out in their favor? If you patent something, it needs to be novel and innovative, and you need to be able to prove that it is such. I don't see the issue here, and in fact I support the idea of having a "heightened" review process, as it sounds like it's intended to help blunt the damage caused by people obtaining overly broad and/or obvious/frivolous patents. If Microsoft's argument is that they should not have been subjected to the test, because they ended up failing it, then that's not going to fly either.

quote:
The EU based some its assessment reports on documents obtained that courts later determined to be “unlawful.”


This one has some minor chance of working, though how much depends entirely on how many documents were deemed inadmissable, and how much of a role those documents played in the decision process. I don't have this information, though I'm guessing that if it were really substantial, Microsoft would be playing up this aspect a lot more than they are. Thus, this argument seems unlikely to succeed as well.

quote:
Microsoft was denied its “right” to be heard due to the EU’s failing to give Microsoft the opportunity to speak up after the period for which it was fined, preventing the company from “commenting on all relevant aspects of the case.”


You don't have any right to respond after the response period has expired. Microsoft should have completed its response in a more timely manner.

quote:
And, simply, the fines imposed are “excessive and disproportionate,” particularly due to the fact that the EU chose to challenge its licensing practices.


Of course Microsoft is going to say that, but unless they can somehow prove it, all this argument boils down to is Microsoft saying "we dont want to have to pay a fine". That won't work, as the judge is probably already well aware of the fact that the losing party in any given case would prefer not to lose.

Seriously, if that's the best their legal team can come up with, then they deserve to lose $1.4 billion. And then they should get some better lawyers.


RE: Fight and win
By DragonReach on 7/10/2008 12:51:16 AM , Rating: 2
There are some misconceptions here.

1. The charges for the interoperability documents was not for the court but for competitors of MS.

2. Subjecting one company to more stingent patentability tests than other companies is straight out wrong and an obvious measure to ensure a pre-determined outcome.


RE: Fight and win
By ElBrujo on 7/10/2008 4:44:10 AM , Rating: 2
The EU are just a bunch of socialists jealous that they can't tax Microsoft any more than they already collect for sales tax (which is highway robbery if you don't already know). Part of the reason people want to come to the US from Eurape is that US taxes are much lower. The rest of the mindless sheep who'd rather pay through the nose so that everything else is spoon-fed back to them are pissed at American capitalism and not getting their share of other people's efforts.

Hell, Microsoft should pay the fine and raise the cost of all EU SKUs. Then it would be painfully obvious who actually pays for fines and taxes. You could call it Capitalism 101.


RE: Fight and win
By purefat on 7/10/2008 8:03:30 PM , Rating: 2
quote:
Part of the reason people want to come to the US from Eurape is that US taxes are much lower.


The only reason I am really anxious to come to the US is the extremely weak dollar. It's really a free shopping spree.

quote:
The EU are just a bunch of socialists jealous that they can't tax Microsoft any more than they already collect for sales tax


I am unhappy to inform you that the vast majority of the governments the EU states, the people with the real power, belong to the right-radical right wing. Cyprus is the only EU state with communist goverment, while social democrats ( which are extremely far from communism) govern Spain and take part in the governing coalition with the Christian Democrats in Germany. As far as I know nearly all belong to the right wing.
In addition to this, in some EU states all communist symbols are banned.
As you can conclude the EU/EC are not consisted of jealous socialists. In fact Europe is a political midget, nearly always obedient to the US. So if MS would like to get rid of all these fines, it should focus to Washington rather than Brussels

P.S. I am not against free market, but at least in my country untill now free market = unlawful, full of cartels, expensive market


“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

Related Articles













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki