

Microsoft fined $731m by European Commission over web browser choice - paulsilver
http://www.bbc.co.uk/news/technology-21684329

======
tomp
I think more companies should be fined like this, as a percentage of their
anual revenue. Except that I would further increase the percentage - up to 50%
or even 100%.

It's very simple: citizens go to jail, companies can't; so we have to make
them pay, a lot. When fines are a fixed amount, the corporations have to
simply earn more by committing the crime than they would have to pay if
caught; banks are very adept at playing this game.

~~~
brg1007
This fine is plain stupid. Why EU doesn't fine Google for the same thing on
Android. Android is in a monopoly position in EU and I do not saw any broswer
choice screen when I first start my Android phone.

~~~
martinced
You're seriously confused as to what a monopoly is and what a monopoly
implies.

There's nothing wrong with having a monopoly. What is, however, illegal is to
abuse your monopoly to keep and extend your monopoly to other domains.

Btw Google / Android isn't near anywhere a monopoly in the smartphone / tablet
market.

What would be illegal would be, for example, Google using its search engine to
eliminate any mention of the word "Apple" and of the "apple.com" domain or,
worse, only allowing access to negative criticism of Apple products. But they
aren't doing that (at least not that we know of).

On the contrary MS has been officially judged has being a monopolist abusing
its power to try to keep and extend its monopoly. Both in an US judgement and
in an European judgement.

Heck, even selling the Xbox at a loss for years and years while living on
monopoly money is a dubious way to enter a market (but personally I wouldn't
mind if MS faded into irrelevancy and had only its Xbox division doing fine ;
)

~~~
gjulianm
Google / Android + Chrome is not a monopoly in the same sense that Windows +
Internet Explorer isn't neither. Maybe in other ways MS has abused its
position, but not in IE. At least in my opinion.

Why? Because IE was a default browser, all the OS have a default browser.
Microsoft didn't prohibited anybody from installing another browser.

If we consider that a monopoly and something punishable, then Android + Chrome
is another monopoly. In EU, Android has over 61% market share [1]. And every
Android comes with its default browser. And as your parent said, I don't see
any ballot screen telling me to choose an alternative browser, but Google
doesn't keep you from installing other browsers. Is the exact same situation.

[1] [http://www.nasdaq.com/article/apple-raises-market-share-
to-5...](http://www.nasdaq.com/article/apple-raises-market-share-
to-53-ousting-android-from-top-spot-cm201499#.UTdBTXy92QY)

~~~
jsnell
Actually, Microsoft did contractually prohibit OEMs from pre-installing other
browsers and making them the default instead.

~~~
gjulianm
Never heard of that. Source?

~~~
stordoff
Mainly the US anti-trust case
<[http://www.justice.gov/atr/cases/f3800/msjudgex.htm>](http://www.justice.gov/atr/cases/f3800/msjudgex.htm>).
Example:

> At the same time, Compaq removed the Internet Explorer icon from the desktop
> of its Presarios and replaced it with a single icon [for Navigator]

>When Microsoft learned of Compaq's plans for the Presario, it informed Compaq
that it considered the removal of the MSN and Internet Explorer icons to be a
violation of the OPK process by which Compaq had previously agreed to abide.
[...] Finally, after months of unsuccessful importunity, Microsoft sent Compaq
a letter on May 31, 1996, stating its intention to terminate Compaq's license
for Windows 95 if Compaq did not restore the MSN and Internet Explorer icons
to their original positions. Compaq's executives opined that their firm could
not continue in business for long without a license for Windows, so in June
Compaq restored the MSN and IE icons to the Presario desktop.

------
marknutter
This fine would only make sense if Microsoft _prevented_ users from installing
a different browser.

Consider an analogy: let's say there's a power company who runs a monopoly on
generating electricity. They also provide natural gas services to their
customers. There is, however, a bunch of other smaller natural gas companies
just a phone call away that people can buy natural gas from; all you have to
do is call them and have a technician come and flip a switch in your home. Is
it really harmful to the consumer if the power company with the dominant
market position doesn't give their customers the phone numbers of the
companies competing with its natural gas division? No.

~~~
toyg
You don't understand the context. MS did indeed prevent OEMs from installing
another browser; it's like they were forcing house builders (which have to use
electricity) to connect only their own gas services to new houses.

And for that sin, MS will keep paying for a long time; they're basically an
ATM for the EU now. This is not great but hey, they do have a history; once a
felon, forever a felon, so to speak.

~~~
marknutter
But that doesn't fit with the analogy. Downloading and installing a third
party browser is next to effortless. Who cares if the OEMs didn't install
them? In my analogy the third party gas companies had to send out a technician
to install their service, but could presumably do that free of charge to
entice the customers to switch to their service.

~~~
toyg
It still prevented other companies to have similar, competing agreements with
house builders, and inflicted extra costs on them. As such, it's clearly an
abuse of a monopolistic position in one market to influence another.

In any case, this is not open to debate -- both the American and European
justice systems found MS guilty, so that's how it is.

~~~
marknutter
Right, because the American and European justice systems have never gotten it
wrong, before.

~~~
_Simon
No. The issue isn't that the end use couldn't install a browser, the issue was
that Microsoft forbade OEMs with the threat of removing their distribution
license from _pre-installing_ other browsers, thus preventing competition at
point of sale. This is anti-trust. It's not a 'stupid' law, it extremely
sound. Microsoft, in all reality, should have been broken up as a result, but
because the judge mouthed-off (and some heavy lobbying), they were treated
more leaniently.

------
youngtaff
It's completely crazy.

We've accepted browsers are part of the OS for a long time, what's next fining
Apple for not promoting Mozilla or Chrome on iOS?

~~~
masklinn
> It's completely crazy.

There's nothing crazy about it.

> We've accepted browsers are part of the OS for a long time

We've accepted that browsers are necessary, the EU seems to have not accepted
an OS natural monopoly can be leveraged into a browser monopoly. Sounds
perfectly sane, and a good thing.

> what's next fining Apple for not promoting Mozilla or Chrome on iOS?

Apple does not have a monopoly marketshare, which lead to the original
decision which Microsoft then broke:
[http://en.wikipedia.org/wiki/European_Union_Microsoft_compet...](http://en.wikipedia.org/wiki/European_Union_Microsoft_competition_case)

~~~
qntmfred
they did on iOS (for a while). Safari is bundled with iOS

~~~
masklinn
> they did on iOS (for a while).

No. Apple never had a super-majority (or even a majority) of the smartphone
marketshare, let alone in the EU where Symbian and BB historically held strong
marketshares during iOS's tenure.

iOS's best has been 30~40% in _some_ european country (not even EU-wide).
Although it _does_ capture the vast majority of profits, but that's not really
relevant to antitrust-type cases.

I believe Samsung currently has a bigger share of the EU market than iOS.
There never was a case of monopolistic abuse from apple in the EU, because
they never came close to a monopoly.

~~~
toyg
One has to wonder whether the whole "elitist" strategy from Apple isn't, in
fact, a way to avoid the sort of responsibilities Microsoft took on, both
towards developers, the "enterprise" community and the wider population.

------
paulsutter
It's only a small percentage of the taxes that Microsoft has dodged, er,
"structured away". Microsoft can pay the fine using their cash that's stranded
overseas without having to repatriate it back to the US and pay taxes on it.

------
flexie
Here is the European Commission's press release about the decision:
<http://europa.eu/rapid/press-release_IP-13-196_en.htm>

------
sbennettmcleish
Whilst it is Microsoft with bags of money and all that, I don't really see how
such a huge fine (even for M$) is warranted.

Yes, they stopped offering the browser choice, but at what point did someone
from EU-HQ contact MS-HQ and tell them they'll be fined if they don't put it
back in? Surely it would only take a few weeks at the most to actually re-
instate the "feature" once they were threatened with a huge fine.

It might have been better for Microsoft to have actually been forced to give
money to the other browsers to promote their products, or alternatively, just
bundle Firefox/Chrome with Windows and be done with it.

~~~
gsnedders
There was an explicit order in the previous anti-trust ruling that required
it. The ruling stated they could be fined up to 10% of their revenue if they
failed to comply. They did not comply. They were fined.

It's not like they weren't told about it first.

------
yread
This thread seems to be heavily flagged, but nobody mentions in their comment
that it's irrelevant or that they've downvoted or flagged it. Any of the
flaggers would care to share their reasons?

------
CurtHagenlocher
That's about $50 per user believed to have been affected by the error.

~~~
meaty
I understand the premise of the fine, but how is this supposed to help the
consumers and businesses who now have to foot the $50 bill per seat?

~~~
netrus
If MS raises its prices, it will weaken their market position - that's the
punishment for their malbehavior.

------
mechatronic
I think the EU should stop collecting taxes and get American tech giants to
fund the public service with spurious fines.

------
zacharyvoase
EU competition law is a completely different beast from US antitrust law, and
whilst I disagree with both forms, the EU definitely suffers from more of a
Tall Poppy Syndrome: if you're a market leader with a disproportionate share
of the market, it's almost assumed that you're acting in bad faith, and it's
up to you to prove you're promoting 'fairness' and 'competition'.

If anything is 'anti-competitive' it's rulings like these, which punish people
for producing quality software and increase the uncertainty of doing business
in the EU.

There's a good comparison of the two systems over here:
[http://www.iie.com/publications/chapters_preview/56/10ie1664...](http://www.iie.com/publications/chapters_preview/56/10ie1664.pdf)

------
mmahemoff
What does this mean for ChromeOS or Firefox OS? I'm seriously curious how the
legal system considers them in light of this and why MS hasn't mentioned them
(to my knowledge) in their defence.

~~~
ioulian
That's indeed my thought, why only Microsoft? Apple should also give that
choice to their OSX users.

~~~
masklinn
> That's indeed my thought, why only Microsoft?

Abuse of a natural monopoly.

> Apple should also give that choice to their OSX users.

Stuck at 10% global marketshare (probably below that in the EU), there is no
risk Apple will be able to leverage a dominant OS position they don't even
remotely have into market distortions in related domains.

------
dworrad
I'm sorry but what about the ipod, iPad, iPhone.... Can't remember them giving
me the choice of where I want to buy media. This must be a joke?

------
tm4n
This still seems rather unfair, why are other proprietary operating systems
_not_ obliged to incorporate a similar feature? It's Microsoft own operating
system and they should be allowed to incorporate whatever piece of software
they'd like, albeit to a reasonable extent.

On the other hand, I do find it weird there are no repercussions like this for
Windows' new secure boot "feature".

~~~
masklinn
> why are other proprietary operating systems not obliged to incorporate a
> similar feature?

Because "proprietary" is irrelevant, the operative word relevant to the
original judgement was "monopoly". And more precisely abuse of a natural
monopoly.

> It's Microsoft own operating system and they should be allowed to
> incorporate whatever piece of software they'd like, albeit to a reasonable
> extent.

If they were sitting at a 10% desktop OS market share that would be the case.
But over the last ~150 years, natural monopolies have come to be seen as too
dangerous (due to their ability to leverage an essentially impregnable
stronghold into dominance in other domains through "legal" market distortions)
to be left to play by the normal rules, so many first-world countries have
additional rules for monopolistic entities to follow.

In the EU, companies in dominant positions have "a special responsibility not
to allow [their] conduct to impair competition on the common market".

------
brudgers
In my opinion this sheds some light on Sinofsky's departure. That's quite a
fuck-up and it happened on his watch.

------
theklub
Microsoft is stupid for making this mistake but the fine is complete BS in the
first place. I think it would make more since to fine them over search engine
options since that's where the money is actually made. If someone can explain
how money is made off the browser alone then please enlighten me.

------
mda
Microsoft will probably counter-fine by raising its prices by 1€ in EU. Europe
will happily pay for it.

~~~
omd
Ah, it's the "Don't upset corporations or they will punish us with infinite
price hikes" mantra.

If they raise the price by €1 and for the sake of argument we assume a net
profit of 50%, they would have to sell 1.1 billion packages to recoup the fine
(I don't think Microsoft has sold that many software products in their
lifetime, but it's a fun little thought experiment). 1.1 billion Windows 8
licences at €280 a piece is €308 billion revenue of which the corporation
taxes will flow back to the EU members. It's a win-win for our tax payers!

~~~
mda
€1 was just figure of speech. (Still, Governments pay for a ton of Microsoft
products; Ms office, Windows, Exchange mailboxes, Sharepoint licenses, SQL
server licenses etc. etc. How much money do you think Ms makes from EU
governments in one year? in 5 years?)

High software prices indeed harm tax payers. There is no win-win.

~~~
r00fus
> High software prices indeed harm tax payers. There is no win-win.

High software prices generally hurt businesses more than individual taxpayers.
The 1EUR fine would be a catastrophe for Microsoft's PR, however.

That kind of move would also push a non-trivial population to alternatives
(however weak) like Google Docs.

------
pepperp
Why don't they start fining car manufacturers for not providing customers with
a choice of seats made by other manufactures? Antitrust law in the EU is a
load of bs, coming from someone who uninstalls IE first thing after installing
Windows.

~~~
MichaelApproved
You're misunderstanding. The problem is that Microsoft is using its OS
monopoly to try and create another one. These special anticompetetive triggers
only come into effect when the company has a monopoly.

To be more clear, there is noting illegal about HAVING a monopoly. It's what
you do WITH a monopoly that matters. If you don't have a monopoly, you're much
less restricted with what you can do.

To correct you analogy, it would be if one car company manufactured 90% of the
cars and decided to sell the cars with its own tire brand.

~~~
pepperp
Fair, I get you. I still wouldn't have a problem with the corrected analogy.
Firstly, I consider the web browser an integral part of an OS even if you have
the choice to replace it, so it's not creating a further monopoly, it's just
part of the package (just like tires and the body of a car).

But more importantly, problems caused by some monopolies (e.g. extortion), and
monopolies themselves, have historically been the RESULT of government
intervention. Other web browsers obviously can compete considering IE is not
the most widely used browser anymore.

~~~
MichaelApproved
First, let me say that I like Microsoft. I'm a happy Windows user and
developer but what they did with IE was wrong and I'm happy someone tried to
hold them accountable.

Originally, Netscape was a thriving company and able to make money by selling
it's software to consumers. Microsoft crushed them by giving their interferer
browser away for free with their Windows monopoly. For many years after that,
consumers had a terrible browser with little to no alternatives.

Eventually, web browsers found a way to compete but consumers suffered with
the artificially created IE monopoly. Innovation to slow down and even went
backwards during those years.

You're looking at the world today as if it was always thriving with choices
but MS inflicted many years of damage to consumers by illegally driving out
competition and stifling innovation.

It's important for governments to protect competition and prevent monopoly
abuse. You might argue that MS got away with killing Netscape because the fine
was worth it for them but at least they were stopped from preventing more
damage with their monopoly. Who knows what other businesses they would have
tried to shut down.

------
jermaink
For now, it´s "just" browser applications.

------
kabdib
Another trip to the Microsoft piggybank.

------
lucb1e
I wonder what they do with this money actually. Same as is done with tax
money?

~~~
Zirro
The money paid to the European Court goes back into the EU budget.

~~~
nolok
And lowers the amount member states have to pay (it does not increase the
budget)

~~~
lucb1e
Oh that's an interesting detail. That way the EU doesn't enrich itself but it
ensures that such "profits" are equally divided among member states. (Because
it all saves them money they would otherwise have had to pay.) Nice to know.

------
meaty
What motivation have Microsoft got to pay this?

~~~
lutusp
The right to continue to do business in the EU? That's what's at stake.

~~~
meaty
I don't think they can just cut off every Microsoft consultancy, every Windows
user and throw them out of the EU.

If they did, I'd be heading to Brussels with a pitchfork along with about 100
other people at my company.

~~~
arethuza
I don't think this has anything to do with companies that offer services
around Microsoft products - this will be about the Microsoft subsidiaries and
assets located within the EU - there will probably be at least one Microsoft
legal entity within each country where they have a direct presence, not to
mention significant assets like large data centers.

~~~
meaty
Which is still an issue for a lot of people who depend on them.

~~~
vidarh
That's an issue those people would need to take up with Microsoft if Microsoft
decides to risk their business over this. If they don't pay, they will have
assets frozen, just as any other company or individual that refuse to pay
their fines. Simple as that.

~~~
hodr
I know they will back down, but it makes me wonder; what if they didn't?

Could a business, a corporation, go to war against another entity. Countries
go to war all the time and while it may be "illegal", it's only the loser that
has to suffer the consequences.

What if Microsoft just decided screw it, and flipped a magic switch somewhere
and shut down the entire EU infrastructure. No OS, no web servers, no SQL, no
sharepoint, etc. Trashing or stealing every bit of data along the way? Freeze
Microsofts assets you say? What if they could freeze or steal a great portion
of the EUs assets?

Sure, the EU would get over it eventually, but it's an interesting thought
experiment.

~~~
glomph
I think it is funny that these types of comments always come up in threads
about EU rulings but are never made when it is the US government.

