|
Return
to The |
|
|
|
|
|
|
The
View from the Meadow
Observations
of the Passing Scene
Political
and Social Commentary by Dave Satre
|
Microsoft Antitrust Issues This company’s as hard to get along with as Bush and Company! Microsoft is finally paying for its aggressive efforts to monopolize the computer software industry. In 2004 the European Union fined Microsoft $650 million for its antitrust activities related to the use of the company’s Windows operating system to thwart competition. The company was ordered to make technical information available to software developers so they could produce programs that run on Windows. Microsoft agreed to the conditions. In July, 2006, the EU fined the company $351 million for not complying with the ruling. A pittance for the world’s wealthiest software company. Microsoft appealed the fine, but in Oct, 2007, CEO Steve Ballmer agreed to drop the appeal and reduce developers fees. Feb. 27, 2008, the EU fined Microsoft an additional $1.36 billion for non-compliance. Microsoft has now paid the EU a total of $2.5 billion. The fines are the only penalties ever levied by the European Commission over antitrust issues in its 50-year existence. The company has paid around $10 billion in fines and settlements between the EU and the US. In Feb, 2008, the EU also initiated two new antitrust investigations against the company’s antitrust practices in the word processing and spreadsheet markets. Microsoft has now announced it will make technical documentation available for free in a belated attempt to stave off more lawsuits Microsoft’s antitrust attitude is a serious part of the company’s corporate personality. It’s aggressive copying of other companies’ technologies is notorious. Most of the features of its products were originally developed elsewhere and then either purchased or reverse engineered by Microsoft. This includes the company’s initial product, the MS-DOS operating system. Microsoft developed it for IBM, a big-iron company that was the standard and a near monopoly in the large corporate computer systems market. (hmm, sounds a lot like Microsoft, doesn’t it?) Its management considered microcomputers nothing more than techie toys and totally missed this nascent market until the real entrepreneurs and techie wizards demonstrated its demand and potential. When the company finally decided to develop a microcomputer it basically cobbled the first one together with the parts from existing products. When they needed an operating system, for some inexplicable reason they hired young Bill Gates, who didn’t have an existing product and hadn’t even graduated from college. There were several microcomputer operating systems available in the industry, including CPM and those from Commodore, Atari and Apple. Gates apparently made several offers to purchase an operating system, but was turned down. He purchased Q-DOS for $50,000 an operating system developed by Seattle Computer, which was compatible with the Intel processor that IBM used. Microsoft modified it to serve IBM’s needs. The others were all better than Q-DOS, which didn’t even offer color, much less sound or graphics. There was no standard operating system in the market at that time, which made software development difficult. The industry acquiesced to IBM because it not only provided a standard, it offered large scale distribution and huge financial returns. Bill Gates ended up with a stranglehold on the industry and became the world’s richest man. Microsoft reported $51.1 billion in revenue for its 2007 fiscal year and $14.1 billion in net profit. They can afford the fines Microsoft has also been pursued over antitrust issues in America. The FTC investigated collusion between Microsoft and IBM in early 1990. The Justice Department took over when the FTC ran into huge deadlocks in the investigation. Microsoft signed a settlement in 1994 that specifically prohibited the company from using its operating system to develop a monopoly. The agreement wasn’t officially approved until 1995. In October, 1997, the Justice Department filed a complaint demanding a $1-million-a-day fine against Microsoft for violations of the 1995 consent decree. Antitrust hearings began and in May, 1998, the Justice Department and 20 state attorneys general filed an antitrust suit against Microsoft. The trial began in Oct 1998 and took more than eight months, ending in Jun 1999. Judge Thomas Penfield Jackson found Microsoft guilty of using its monopoly to control the software industry. Settlement negotiations collapsed and in June 2000 Judge Jackson ordered the breakup of Microsoft into two companies (shades of AT&T). Microsoft appealed the decision, but the Supreme Court refused the case Enter George W. Bush and Company. GW’s support for the corporatization of America took over and Judge Jackson was removed from the bench. The US Justice Department caved in and Judge Kollar-Kotelly ordered a settlement in the case, claiming it was in the public interest. In Nov, 2002, the European Commission, with an apparent eye on the happenings in the US , launched its own investigation into Microsoft. The company responded by charging the EU with stifling innovation. This didn’t work anywhere near as well as in the US. Antitrust practices are a core business concept for Microsoft, as they are for most of our major conglomerates. Reportedly, the company is currently attempting measures to control other areas in the software market, including free e-mail and instant messaging services. The antitrust issue could prevent MS from accomplishing its hostile takeover of Yahoo!, which would require consent from Europe as well as Washington. Bush and Company, which obviously holds a fascination for antitrust practices, is not expected to get involved. Resources Related to This Topic: Wall Street Journal Article (Feb 25th 2008) US Antitrust Case ZDNet.co.uk Video: Pirates of Silicon Valley (Available on NetFlix) |