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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.



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RE: Funny
By FITCamaro on 7/9/2008 8:41:08 AM , Rating: 5
Did you even read the article. This fine was not from Microsoft breaking the rules. It was from them saying Microsoft did not sufficiently comply with what they wanted them to do as a result of the initial ruling.

quote:
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.


So you think its ok for Microsoft to be fined because they didn't meet a goal that was never told to them? That'd be like your boss firing you for not getting your work done by the deadline when he never told you when the deadline was.

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.”


So experts in the computer industry say that Microsoft's protocols are worth a certain amount, Microsoft prices its licensing fees more than 30% below that, and those prices are deemed unfair by the EU who don't have a damn clue what any of this stuff is worth.

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


Hey who cares what they get or how they get it just so long as they make a decision right?

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.”


Ah so we'll just throw out any kind of ability for a company to speak up against absurd fines as well. Perfectly ok.

The fact of the matter is, Microsoft makes a product. It spends billions of dollars doing so. It has the right to charge whatever it wants for protocol information and anything else. If those prices are too high, then people and businesses will go to other products. It's called the free market. Something the EU wouldn't know if it smacked them in the face with a sledgehammer.


RE: Funny
By Maharajamd on 7/9/2008 9:09:57 AM , Rating: 2
^ I generally don't agree with you, but you're about spot on with this.


RE: Funny
By karielash on 7/9/08, Rating: -1
RE: Funny
By baseball43v3r on 7/9/2008 1:59:29 PM , Rating: 4
protectionism? no free market? are you insane? then explain why we pretty much import EVERYTHING nowadays. our economy is in the crapper right now because of the free economy because we have the minimum wage and countries like India and China really...dont. but your right, we dont have a free market. We only lose jobs to foriegn countries every day because our country has the free economy. As to the home of protectionism, i can think of quite a few countries, some most notably in the actual EU that are far far far worse then the US in terms of that.

The experts come from PriceWaterhouseCoopers so that is at worst reasonable, just because the link comes from Microsoft doesnt mean the information they tout isnt verifiably true. They were told to put their house in order but not exactly what that meant, so how could they do so under sucha vague premise? of course the EU would say they are spouting rubbish do you honestly think MS can win this after the EU wants that much money from them? its not like the EU is a holy santic body who does no wrong, they are just a money grubbing organization going after the fat little piggy for the bacon.


RE: Funny
By michael67 on 7/9/2008 6:07:31 PM , Rating: 2
I am amazed how rude the comment are here to worth the EU citizen, what a hatred just because we have a other philosophy how to control the market.
Yeah we have a little more social society but believe me, we have still a capitalistic based economy its just different based, and the rules collide sometimes .

Even do “I” think our system is better for its citizen doesn’t mean it is but same gose for the US system, shouting that the US system is the best doesn’t make it so. (doesn’t rule it out idler) and properly the truth is some ware in the middle!
I would just say have a little respect for others and try to see there point even if you don’t agree.
quote:
Did you even read the article. This fine was not from Microsoft breaking the rules. It was from them saying Microsoft did not sufficiently comply with what they wanted them to do as a result of the initial ruling.

You get stopped for speeding, doing 50 in a 30 zone and you get a fine.
Afterwards you get pulled over a other couple of times for doing 40 in the same zone afterwards you have to come for a judge and he takes away your license (read the 1.4B fine) and you start arguing yeah but 40 is a real safe speed there this is bogus (read MS dint wane comply) do you find it strange that in the end a judge gives suds a penalty because you wont wane hear to reason ?

Its very simple different country’s have different rules and different economical models if you doing business in a other country you have follow there rules.
Just because they are different docent make them bad ore good but you have to follow them.

In Holland stands one of the worlds best aluminum factory but it cant do business in the US because of a 30% import tax
Ore Airbus maybe lost its 30B contract whit the USAF for new tankers because Boeing got incredible pull in DC

Do you hear EU citizens saying “all Americans are damn protective neocons only think about your self” have a look in the mirror and use a bit more respectful languish
quote:
So you think its ok for Microsoft to be fined because they didn't meet a goal that was never told to them? That'd be like your boss firing you for not getting your work done by the deadline when he never told you when the deadline was.

The ware tolled multiple times what they had to do.
I have seen a intervieuw whit Neelie Kroes the EU Competition Commissioner, in that interview she was saying that in her hole life she never came a crosses a company, that tried to stall, wiggle, BS its way out of complying whit the rules.
And dint see any other way then taking the gloves of in the end and just put a 2M Euro daily fine in place to get them to comply
quote:
So experts in the computer industry say that Microsoft's protocols are worth a certain amount, Microsoft prices its licensing fees more than 30% below that, and those prices are deemed unfair by the EU who don't have a damn clue what any of this stuff is worth.

Again EU law different from US law, if you have +75% market share the rules change for you and have to follow stricter rules to let smaller companies also have change to be competitive.
I also have seen in forums ware programmers for smaller companies ware very happy whit the EU ruling , and dose ware not only EU but also US companies (1)

quote:
The EU based some its assessment reports on documents obtained that courts later determined to be “unlawful.”
Hey who cares what they get or how they get it just so long as they make a decision right?

Yeah right, like a US court would rule out document given by employee that had singed a secrecy document of wrong full doing.
That employee can properly not even be fired even under US rule.
quote:
Ah so we'll just throw out any kind of ability for a company to speak up against absurd fines as well. Perfectly ok.

The fact of the matter is, Microsoft makes a product. It spends billions of dollars doing so. It has the right to charge whatever it wants for protocol information and anything else. If those prices are too high, then people and businesses will go to other products. It's called the free market. Something the EU wouldn't know if it smacked them in the face with a sledgehammer.

Read comment (1) again pleas
They have a monopoly they can strong arm ask what ever they want and small business have no other way to go then to: 1) pay what ever MS ask. 2) do reverse engineering.

Look at graphics market ware Nvidia actual helps in the development of a CUDA driver for Ati.
If Nvidia had a market share of 90% they would have sad to Ati want a CUDA driver pay us a dollar per vga card, now they are asking only pennies because there is competition


RE: Funny
By Donkeyshins on 7/9/2008 7:43:23 PM , Rating: 2
quote:
You get stopped for speeding, doing 50 in a 30 zone and you get a fine. Afterwards you get pulled over a other couple of times for doing 40 in the same zone afterwards you have to come for a judge and he takes away your license (read the 1.4B fine) and you start arguing yeah but 40 is a real safe speed there this is bogus (read MS dint wane comply) do you find it strange that in the end a judge gives suds a penalty because you wont wane hear to reason ?

Actually, this is incorrect. The proper analogy would be:

You get stopped for speeding, doing 50MPH in an unmarked zone and you get a fine. After slowing down to 40MPH and asking the officer if this is slow enough, you get a warning, but no indication of the proper speed. You slow down to 30MPH and get another warning, but still no indication of the proper speed. You slow down to 20MPH, cars passing you on either side, and are hit with a 1.4B fine...while still not being told what the speed limit is.
quote:

I have seen a intervieuw whit Neelie Kroes the EU Competition Commissioner, in that interview she was saying that in her hole life she never came a crosses a company, that tried to stall, wiggle, BS its way out of complying whit the rules.


Yes, and Neelie Kroes is so impartial. Let's see, she's on the board for Lucent Technologies, which is a subsidiary of Alcatel-Lucent. Who is A-L suing again for infringement on MP3/MPEG licensing again (appealing a ruling which was thrown out of court)? Microsoft, who licensed the technology from Fraunhofer (which co-developed the technology with Bell Labs - Lucent's 'parent').

Why hasn't Neelie recused herself from the EU v. Microsoft case again? Makes one think...


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