EU's $1.35 billion fine on Microsoft to do any good?
It's tough to please the European Commission on matters of antitrust. But then, Microsoft hasn't tried very hard.
The Commission just hit Microsoft with a $1.35 billion fine for being "unreasonable" over its proposed patent fee structure:
"Microsoft was the first company in fifty years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision," said European Competition Commissioner Neelie Kroes. "I hope that today's decision closes a dark chapter in Microsoft's record of noncompliance with the Commission's March 2004 decision and that the principles confirmed by the Court of First Instance ruling of September 2007 will govern Microsoft's future conduct."
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Now, why would she think that? The Commission has dinged Microsoft before with fines, to no effect. Clearly, it is using the wrong tools or perhaps has the wrong argument. The ironic thing is that Microsoft could reduce its patent fees from its initial 3.87 percent to 0 percent, and it wouldn't affect its business one iota.
Microsoft's decreasing proposals for patent royalties demonstrate that while it wants to hold on to the potential royalties, it really doesn't need them. Even if it did, Microsoft has taken such an ugly public stance on its patents that it's no wonder that the Commission wants to put it back in its place. Microsoft has tried to use its patents as a club against open source, and I've got to believe that the Commission doesn't appreciate it.
Where do we go from here? Well, I hope that the Commission stops crowning itself regulator of the free world. The market can take care of itself.
Google doesn't need the Commission to kick the snot out of Microsoft, and neither does open source. We're doing just fine, thank you, Ms. Kroes. As Mary Jo Foley writes, the Commission seems to be trying to protect competitors, not customers, and the competitors it is protecting are the same ones frittering away time in the 20th century. Time to move on.
As for Microsoft, it just needs to let go of its silly stance on patents. It may jibe well with the 20th century's concept of how one monetizes intellectual property, but we've moved on. Time for Microsoft to do so too.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
"Well, I hope the EC stops crowning itself regulator of the free world."
The EC has never done that. The EC does it job of taking care of the situation in Europe.
There is this thing called "The Law". Microsoft is welcome to do business in Europe if it respects the European law. It has repeatedly broken it in the past and continues to do so in the present, though the situation seems to be improving. Why shouldn't the EC do its job?
For the record, since some of your readers have mentioned the idiotic argument that all of this is happening because MSFT is American, the EC has also intervened very strongly in the case of EUROPEAN energy companies. In fact, the EC has come done MORE strongly with other companies than it has with MSFT.
No, it's not. Only you and Microsoft seem to have a problem.
"Now why would she think that? The EC has dinged Microsoft before with fines...to no effect."
So far. This was a record fine; if M$ want to continue making records, that's fine by me - we'll get a few high speed railways out of it. But I suspect that sooner or later, they'll learn. And you think we should let M$ get away with it?
"Well, I hope the EC stops crowning itself regulator of the free world. The market can take care of itself. "
Patently untrue, or M$ would not be continuing in it's monopolistic behaviour. The market has shown - all over the world - that it has a problem with monopolies, that's why all countries have antitrust laws. Including yours. In this case, M$ just clicked a filter in Europe before the States. And you think we should let M$ get away with it?
You are choosing your words carefully to criticise both M$ and the EU; Here in Europe, we don't like abuse of the market, and until they change, we don't like Microsoft. So we don't chastise the EU on this occasion, we applaud them.
On this occasion, EU=Good, M$=BAD. Period. No weasel words, no problem.
We save the chides for those who do something bad - your new friend, M$.
That has absolutely no basis. In fact, this is the argument monopolies use to protect their status quo. The market CAN'T take care of itself, and that is why there are regulators. The EU regulators are doing their job, hitting Microsoft with fines every time it breaks the law. The US regulators set such small fines (if they even do that) which Microsoft has absolutely no problem paying up, and consider a cost of running their monopoly.
If you think that keeping Microsoft as a monopoly in the OS environment serves the customers' interests, you're making a huge mistake.
At the end of the day, as someone else said, these fines are set because Microsoft wants to do business in Europe. If they don't like it, they can take their business elsewhere. But don't think for a second, that just because monopolies reign gree in the US, that the same thing will happen in Europe.
It's shocking to see how reactionary people can be. I'm looking forward. The future sees little of Microsoft. Why don't you join me there?
- by dio_gratia February 27, 2008 2:02 PM PST
- While not directly about patent fees, rather "By charging other companies prohibitive royalty rates for the essential information they needed to offer software products to computer users around the world."
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(7 Comments)The net effect is the same, raising competition's marginal costs to maximize their own profits. The amount of money they were asking could be an indication of their own marginal costs. If it isn't then perhaps its the result of a calculus that provides for a threshold size of a business, that our favored monopoly could then pursue for acquisition?