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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Monopolies are always bad
By acedebase on 7/9/2008 8:53:04 AM , Rating: -1
I think its good that a government is willing to fight what is obviously a global monopoly. You'd never see this sort of stand in the US where the government is bought out by PACs and private interests. A monopoly is never good for the people - it results in artificially high prices and poor products - a mark that distinguishes Microsoft precisely.

Bravo EU Bravo

RE: Monopolies are always bad
By RandallMoore on 7/9/2008 9:06:22 AM , Rating: 4
yes,... Monopoly does = unfair pricing and "sometimes" poor product quality, but everyone needs to stop and think a minute. What would the IT industry be like if there was 1,000 different main stream OS's?? If anyone reading this is an IT Pro, then you perfectly well understand that microsoft can be really really shafty sometimes but at the end of the day, you realize that if not MS, then it would be someone else doing the samn d a m n thing. Im actually glad that 499 out of 500 systems that i service are MS products because there is enough info available out there to fix any kind of problem. Anyone complaining needs to write thier own OS and bring it to market. Dont get me wrong, im not a MS PR representative. But they arent the devil either lol.

I use the same example about people that do nothing but bash pres. Bush with every single breath they have. How about YOU try and run a chaotic country. huh?

RE: Monopolies are always bad
By bobcpg on 7/9/2008 9:40:07 AM , Rating: 2
I agree, but could you image how much more money we (IT people) would make if there was 500 different OS's :)

RE: Monopolies are always bad
By mindless1 on 7/10/2008 11:16:27 AM , Rating: 2
You are failing to see what their goal was, interoperability. With that, an open standard, while we would not have 1000 popular OS, we could have a few more tailored to the different needs that certainly exist.

Nobody that complains needs to write their own OS. If you feel your car has a problem do you need to build your own to justify feeling that way? Of course not, it's well known some are better than others and we welcome the competition because there are standards they all have to meet which at least ensures they are fairly suited to the core intended use.

Having a double standard when it comes to OS versus any other product is not reasonable. Complaining is good, it serves to indicate dissatisfaction in areas that can be improved upon. Even if complaining is not seemingly done in a constructive manner it would then be pointless to fixate on that as if we would have some nirvana as a result. Key is staying focused on actual details that can continue to improve the PC OS we use, accepting it is not perfect just as we had in the past so that no matter what we end up using 10 years from now, it is better and better over time.

MS certainly has the opportunity to do that and a decided advantage. This fine is trival to them, they'll just raise the price of windows next time if the fines add up enough but as always they will have to be mindful of the fact that no matter how much some like windows, others don't place value on the same things and in the end an OS that stays high in cost relative to the total price of a low end system is getting harder and harder to sell.

RE: Monopolies are always bad
By RandallMoore on 7/10/2008 6:37:06 PM , Rating: 2
I understand that the linux world of open source has its applications, but by your comments i can assume that you must have not worked as a tech for clients ranging from home users to medium sized businesses (i can be wrong). The reason MS prevails as a "standard" is because it is the most well known. As i said before, 499 out of 500 home users have MS products. And as you must be aware, whatever the masses of home users have, the businesses will also follow with the same due to less training and more productivity. Imagine this for a minute. Lets say 94% of the average joe, working class citizen uses linux at home, and 94% of businesses use MS or even MAC based systems. That would be complete and total disaster for any administrators and technicians. Its hard enough as it is with 99% percent of the people using the same thing at work and at home. Sure linux has significant market share, and can be useful for very specific situations, but i never see it becoming mainstream.

RE: Monopolies are always bad
By kenferg1 on 7/9/2008 10:00:28 AM , Rating: 2
Hmmmm... EU makes rules. Microsoft follows rules, pricing said technology below fair market value. Microsoft not allowed to comment on ruling made with admittedly illegally obtained evidence. Microsoft fined billions by a Confederate Congress with no real access to money from its member states. For more information on the success of confederated goverments I suggest you look at the Articles of Confederation as well as that well documented success the Confederate States of America.

Once again, Europeans are selling their freedom to petty dictators. You want to be "safe." You want to "feel" good. You want rights without responsibility. That's fine. It's your right under the doctrine of self-determination. It is also the right of a company to refuse to do business there.

I salute the Irish for voting againt membership in the EU. There is no greater threat to individual liberty than the EU, unless you include the imbecility of British Parliament Big Brother mentality.

RE: Monopolies are always bad
By kilkennycat on 7/9/2008 5:53:01 PM , Rating: 3
The Irish did NOT vote against membership of the EU. They are firmly in the EU and wish to remain in it!! They voted against the latest variant of the EU embodied in the new Lisbon Treaty. Ireland's constitution spells out the requirement for a national referendum for major changes in the EU constitution and the EU's current rules demand that ALL countries within the EU individually agree on EU constitutional changes ....

Ireland's major politicians were gung-ho about the Lisbon treaty. Since this is a massively obscure document (like many EU documents) and since the Irish populace distrust their politicians, the Lisbon vote went down. Thus this revision to the EU constitution is currently halted, so the MEPs in Brussels have to stop wining and dining themselves and get down to revising the Lisbon treaty in a manner that is comprehensible/acceptable to the average Irishman in the street and not subject to interpretation by Irish politicians.

"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher
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