MSFTextrememakeover

Monday, September 17, 2007

No one survives the European Inquisition

Sorry to bastardize a line from Monty Python. But there's no way to sugar-coat it; MSFT got clocked in Europe today. That was a loss of staggering proportions. Where most had expected a split-decision - myself included, the Court of First Instance upheld virtually the entire EU Commission case:

The Court of First Instance essentially upholds the Commission's decision finding that Microsoft abused its dominant position," a court statement said.

As a result, the judgments on both bundling and interoperability information stand. As does the record fine. MSFT even gets to pick up 80% of the EUC's legal costs and that of several competitive rivals - or at least rival-backed lobbying groups (EUC picks up 20% of MSFT's costs). What I haven't seen covered is whether this is likely to open the floodgates to additional litigation/financial settlements with competitors in Europe (as it did in the US following the Final Judgment).

Caveat: I haven't read the detail of the Court's decision. Supposedly, MSFT will be still be allowed to improve its products. But when the court found no technical advantage to bundling Media player the way they did, you have to wonder how high the bar will be to add anything without a major fight from a further emboldened EUC. And make no mistake, they are that:

“The ruling confirms more than ever that Microsoft must comply,” said EU Competition Commissioner Neelie Kroes. “I will not tolerate continued noncompliance.”

Additionally, chances that Office and Vista - both of which are under investigation - will now be subject to further EUC demands and or charges seems like a foregone conclusion.

As readers know, I personally thought the European case was far weaker than the US one. Nevertheless, MSFT's legal team went down to total defeat. While they can still appeal to Europe's highest court, that is now restricted to much narrower rules of law only. It's TBD whether they will do so. If they're smart they won't. Which of course means...

Here's the current party line:

“I don’t want to talk about what will come next,” said Microsoft lawyer Brad Smith. “We need to read the ruling before we make any decision.”

EUC head Neelie Kroes is quoted as saying that her view of "success" [now] would be for MSFT's European marketshare to eventually drop to 50% or so. An aide later felt compelled to add that she meant "as a result of normal competitive forces". Sure.

Meanwhile, the stock is off $0.37 or 1.27% on decent but not spectacular volume (presently). The market appears to be trying to decide if this is at least short-term resolution - which they like, versus the beginning of the end for MSFT's dominant market position in Europe - which of course they don't like. Unless the US Administration brings some persuasion to bear to keep the EUC in check, MSFT - and possibly other dominant companies - are going to find it even tougher doing business in Europe. Oh well, at least we got that $0.10 dividend last week. Did you even have a chance to spend it yet?

 

Update: (related)

and,

Excerpt: 

Thomas Barnett, head of the Justice Department's Antitrust Division, said the European Court of First Instance (CFI) in the case against the US software giant may do more harm rather good for consumers.

 

"Rather than helping consumers, (the decision) may have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition," the US official said in a strong rebuke of the EU action.

 

Barnett said that in the United States, "the antitrust laws are enforced to protect consumers by protecting competition, not competitors" and that barring "demonstrable consumer harm, all companies, including dominant firms, are encouraged to compete vigorously."

Update #2 (9/19/07):

Joe Wilcox adds his two cent's worth on the potential implications of this ruling:

What the European Commission wants is the breakup of Microsoft without severing the business asunder.

Gives you the basic tone, if you want to save yourself the effort.

Paul Thurrott links to an interesting piece re: potential impact of this judgment for AAPL:

Update #3 (9/20/97)

Last one, I promise:

30 Comments:

  • And the sad part is the impact that this has on other companies. INTC will be next, GE already got hit with this. I don't want to get all political, but where the f--k is the Bush Administration or Congress lobbying on behalf of the US commercial sector. A sad day indeed, most of which was already factored into the stock price, but it does not bode well for US companies.

    By Anonymous Anonymous, at 10:10 AM  

  • You know what I always thought would be funny. If in the desktop OS space, if we just gave the finger to the EU by not selling to EU countries. Just tell our customers in France (or wherever)..."sorry, we've decided not to service your market, talk to your government"...let the market, let the large enterprise customers drive the change in the EU. Oh, and BTW...where WERE the big customers in EU, like Siemens, SAP (I know, I know...), AXA, Deutsche Bank, etc. coming to our defense and saying "lay the f--k off, they are strategic to us". Bottom line is that we never thought to build those types of relationships with our customers. Sigh.

    By Anonymous Anonymous, at 10:14 AM  

  • ...sigh...
    KT comes out with the "don't worry, be happy" mail last Friday, we get clocked today, and we just trudge along. There is NO wake up call for msft...

    By Anonymous Anonymous, at 10:41 AM  

  • "as a result of normal competitive forces"

    For the EU, that basically means subsidizing the shit out of Linux.

    By Anonymous Anonymous, at 11:37 AM  

  • Apropos of nothing (or everything), the "record fine" of $600M is still less than half of what MS is shelling out for that Xbox360 warranty debacle. Will MS ever just admit the gaming business is never going to show returns commensurate to the incredible (what, $10B+?more? ) investment so far?

    By Anonymous Anonymous, at 12:19 PM  

  • Caveat: I haven't read the detail of the Court's decision. Supposedly, MSFT will be still be allowed to improve its products. But when the court found no technical advantage to bundling Media player the way they did, you have to wonder how high the bar will be to add anything without a major fight from a further emboldened EUC.

    It seems to me that public sentiment is that Microsoft "innovate" by making their stuff work in the first place, forget the endless bundling of marginally useful apps.

    Microsoft can certainly work around this if they genuinely decide to make quality their goal. There's no need to (and in fact - the tactic no longer seems to be working, so from a business sense there seems to be no call to) proceed with "business as usual" subsuming every feature a PC might have into the Windows platform.

    I'd consider the EU defeat as another wake-up call to Microsoft management: the market has changed, get with the program! Make products that work and that people want to buy!

    MS legal certainly has the funds to fight these losing battles for years, but from an investor's standpoint - why? MS isn't going to win by fighting the last war. It needs to step up and fight the new battle.

    -M

    By Anonymous Anonymous, at 9:38 AM  

  • "It seems to me that public sentiment..."

    I agree with much of your comment here. However, I would not call Media player a "marginally useful" application, nor do I think it's a good precedent that in this case they were not allowed to upgrade functionality that has been in the OS for eons w/o offering an unbundled version.

    By Blogger MSFTextrememakeover, at 10:43 AM  

  • Anonymous notes:

    where WERE the big customers in EU, like Siemens, SAP, AXA, Deutsche Bank, etc. coming to our defense and saying "... they are strategic to us"

    While Windows/Vista may be an important deployment platform to these companies, I doubt most would be inclined to defend MS as a strategic partner. Entrenched on the desktop, yes, but valued or preferred AS-IS, doubtful. These are the same "strategic" companies that MS just burned for 3-5 years worth of Software Assurance fees with an unusable Vista release, so they're not feeling too charitable lately. While in many cases MS was formerly deemed part of the solution, it is now perceived as part of the problem.

    Further, these same companies have customers who would benefit from lower desktop TCO (via competition) and defending MS monopolistic behavior would not be good customer relations.

    MSFTextrememakeover notes:

    nor do I think it's a good precedent that in this case [MS] were not allowed to upgrade functionality that has been in the OS for eons w/o offering an unbundled version.

    That is the reality of having a monopoly position. The rules for monopolies are different. They must (by law) avoid exploiting their monopoly position to the disadvantage of competitors and customers. A tactic allowed when not a monoploy becomes disallowed by virtue of having become a monopoly.

    By Anonymous Charles, at 1:03 PM  

  • "They must (by law) avoid exploiting their monopoly position to the disadvantage of competitors and customers."

    How were customers and competitors disadvantaged? And where is the "exclusive control" that "monopoly" dictates?

    By Blogger MSFTextrememakeover, at 3:06 PM  

  • I'm not a big fan of MSFT (I run Linux at home almost exclusively), but this EU action is just ridiculous. Apparently the EU is writing off free markets, and the markets should in turn write them off and pull out.

    Plus, Media Player seems like an especially weird thing to attack. It's clear that MS desparately wants to completely own streaming media (the Xbox360, Zune, and Silverlight make sense only in that context), but they don't even own it on their own platform. iTunes is a common sight on Windows machines nowadays, and Adobe owns the Web. Silverlight will fail unless they can get YouTube and Google Video to switch, and Google ain't gonna do that.

    By Anonymous Ian, at 3:28 PM  

  • MSFTextrememakeover:

    How were customers and competitors disadvantaged?

    (This was more a case of direct impact to competitors while impact to consumers was indirect.)

    From the JUDGMENT OF THE COURT OF FIRST INSTANCE (Grand Chamber) against MS:

    1225 In particular, Microsoft retains the right to continue to offer the bundle of Windows and Windows Media Player. It must be borne in mind that the Commission’s sole intention is to make it possible for consumers to obtain Windows without Windows Media Player.

    1355 The Commission was quite correct, moreover, to observe, at recital 1066 to the contested decision, that the tying ensured the worldwide ubiquity of Windows Media Player, which created disincentives for OEMs to pre-install competing media players on their client PCs and harmed competition on the market for streaming media players (see paragraphs 1031 to 1058 above).

    1356 Last, as the Commission properly emphasises at recital 1067 to the contested decision, the abusive tying has significant effects on competition for the delivery of content over the Internet and also on the multimedia software industry. As stated at paragraphs 1060 to 1075 above, the ubiquity that tying confers on Windows Media Player gives content providers an incentive to distribute their content in Windows Media formats and gives software developers an incentive to develop their products so that they rely on certain functionalities of Windows Media Player, in spite of the fact that competing media players are of similar or even better quality than Windows Media Player. It has also been shown at paragraphs 1076 above that the Commission was quite correct to find, at recitals 897 to 899 to the contested decision, that the abusive tying had also had effects on some adjacent markets.

    And where is the "exclusive control" that "monopoly" dictates?

    "monopoly" is not defined as "exclusive control" but rather dominance. Keep in mind that dominance of a market(s) per se is ok, but dominance combined with "abusive" tactics is not.

    Again, from the JUDGMENT OF THE COURT OF FIRST INSTANCE (Grand Chamber) against MS:


    The contested decision

    21 In the contested decision, the Commission finds that Microsoft infringed Article 82 EC and Article 54 of the Agreement on the European Economic Area (EEA) by twice abusing a dominant position.

    22 The Commission first identifies three separate worldwide product markets and considers that Microsoft had a dominant position on two of them. It then finds that Microsoft had engaged in two kinds of abusive conduct. As a result it imposes a fine and a number of remedies on Microsoft.

    23 The contested decision identifies three separate product markets, namely the markets for, respectively, client PC operating systems (recitals 324 to 342 to the contested decision), work group server operating systems (recitals 343 to 401 to the contested decision) and streaming media players (recitals 402 to 425 to the contested decision).

    26 The contested decision identifies, more particularly, three types of services. These are, first, the sharing of files stored on servers, second, the sharing of printers and, third, the administration of groups and users, that is to say, the administration of the means whereby those concerned can access network services (recitals 53 and 345 to the contested decision).

    30 In the contested decision, the Commission finds that Microsoft has had a dominant position on the client PC operating systems market since at least 1996 and also on the work group server operating systems market since 2002 (recitals 429 to 541 to the contested decision).

    32 The Commission states at recital 472 to the contested decision that that dominant position presents ‘extraordinary features’ in that Windows is not only a dominant product on the market for client PC operating systems but, in addition, is the ‘de facto standard’ for those systems.

    III – Abuse of a dominant position

    A – Refusal to supply and authorise the use of interoperability information

    36 The first abusive conduct in which Microsoft is found to have engaged consists in its refusal to supply its competitors with ‘interoperability information’ and to authorise the use of that information for the purpose of developing and distributing products competing with Microsoft’s own products on the work group server operating systems market, between October 1998 and the date of notification of the contested decision (Article 2(a) of the contested decision). That conduct is described at recitals 546 to 791 to the contested decision.

    40 In the contested decision, the Commission emphasises that the refusal in question does not relate to Microsoft’s ‘source code’, but only to specifications of the protocols concerned, that is to say, to a detailed description of what the software in question must achieve, in contrast to the implementations, consisting in the implementation of the code on the computer (recitals 24 and 569 to the contested decision). It states, in particular, that it ‘does not contemplate ordering Microsoft to allow copying of Windows by third parties’ (recital 572 to the contested decision).

    41 The Commission further considers that Microsoft’s refusal to Sun is part of a general pattern of conduct (recitals 573 to 577 to the contested decision). It also asserts that Microsoft’s conduct involves a disruption of previous, higher levels of supply (recitals 578 to 584 to the contested decision), causes a risk of elimination of competition on the work group server operating systems (recitals 585 to 692 to the contested decision) and has a negative effect on technical development and on consumer welfare (recitals 693 to 708 to the contested decision).

    42 Last, the Commission rejects Microsoft’s arguments that its refusal is objectively justified (recitals 709 to 778 to the contested decision).

    B – Tying of the Windows client PC operating system and Windows Media Player

    43 The second abusive conduct in which Microsoft is found to have engaged consists in the fact that from May 1999 to the date of notification of the contested decision Microsoft made the availability of the Windows client PC operating system conditional on the simultaneous acquisition of the Windows Media Player software (Article 2(b) of the contested decision). That conduct is described at recitals 792 to 989 to the contested decision.

    44 In the contested decision, the Commission considers that that conduct satisfies the conditions for a finding of a tying abuse for the purposes of Article 82 EC (recitals 794 to 954 to the contested decision). First, it reiterates that Microsoft has a dominant position on the client PC operating systems market (recital 799 to the contested decision). Second, it considers that streaming media players and client PC operating systems constitute separate products (recitals 800 to 825 to the contested decision). Third, it asserts that Microsoft does not give consumers the opportunity to buy Windows without Windows Media Player (recitals 826 to 834 to the contested decision). Fourth, it contends that the tying in question restricts competition on the media players market (recitals 835 to 954 to the contested decision).

    45 Last, the Commission rejects Microsoft’s arguments to the effect that, first, the tying in question produces efficiency gains capable of offsetting the anti-competitive effects identified in the contested decision (recitals 955 to 970 to the contested decision) and, second, Microsoft had no interest in ‘anti-competitive’ tying (recitals 971 to 977 to the contested decision).

    By Anonymous Charles, at 5:06 PM  

  • There are 2 parts to the ruling: interoperability and bundling. Since most of the comments here are about bundling I will address those questions.

    How does bundling harm competitors? In this case, if every PC has Windows Media Player, (but not every PC has Real, Quicktime, etc) it is a strong incentive for media websites to provide WMV/WMA files. Thus making it very difficult for Real, Quicktime or anyone else to gain traction in the market. This is a classic example of using a monopoly in one market to establish a monopoly in another.

    As for innovation, the EU commission has no problem with MS innovating a new product and bundling it with Windows. What they don't like, is MS following in other companies footsteps with a me-too product (like WMP) and bundling it to take over an existing market. So, MS will have to innovate if it wants to keep adding new features to Windows.

    This could become a problem for Silverlight, since that seems to be designed to kill Flash, rather than anything else.

    By Blogger Geoffrey, at 5:40 PM  

  • "While Windows/Vista may be an important deployment platform to these companies, I doubt most would be inclined to defend MS as a strategic partner."

    You made my point exactly. Where was Microsoft building the kind of customer relationship where the customer was so satisfied and delighted that they would stand up to defend their strategic partner...nowhere. The simple fact is that we're not strategic or responsive to customers and as a result exec heads and especially field exec heads should roll.

    And on the bundling issue, this has already been argued. Having WMP on the box hasn't prevented anyone from getting Quicktime, iTunes or REAL out there. Quite the contrary. They're EVERYWHERE and websites provide that content in equal measure. Having WMP on the box hasn't hurt companies like YouTube from gaining market dominance. I've always thought that decoupling from the OS might actually allow them (WMP) to innovate in areas that might even compete better.

    By Anonymous Anonymous, at 6:31 PM  

  • "(This was more a case of direct impact to competitors while impact to consumers was indirect.)"

    From what I can see there's no direct proof that any customer was harmed or otherwise disadvantaged -and I suspect a majority would actually say they benefited from MSFT's inclusion of Media Player. I know I would. Even the case for competitors being harmed is unclear. Mostly every OS competitor today bundles a media player and competing media players are easily available to all that want them and downloaded in the 10's of millions.

    ""monopoly" is not defined as "exclusive control" but rather dominance."

    Actually, it is. Hence the reason I queried you on it since you cited it as the justification for treating MS differently.

    By Blogger MSFTextrememakeover, at 6:32 PM  

  • "In this case, if every PC has Windows Media Player, (but not every PC has Real, Quicktime, etc) it is a strong incentive for media websites to provide WMV/WMA files. Thus making it very difficult for Real, Quicktime or anyone else to gain traction in the market."

    Your first part is accurate. Your second would have been compelling if not for a) the ubiquity of the web and downloads and b) the ubiquity of paying OEMs to bundle your stuff. Plus, who said competing was meant to be easy?

    "As for innovation, the EU commission has no problem with MS innovating a new product and bundling it with Windows."

    That really remains to be seen, doesn't it?

    "This could become a problem for Silverlight, since that seems to be designed to kill Flash, rather than anything else."

    And who will decide what is "innovation" (whatever that is, in an industry where so much is derivative) vs me-too? Some bureaucrat with a MSFT competitor whispering in one ear and a politician focused on creating local European economic development in the other? Or can MSFT add whatever they want as long as they continue to provide a Windows stillborn edition that no one wants or buys?

    By Blogger MSFTextrememakeover, at 7:25 PM  

  • MSFTextrememakeover:

    Actually, it is. Hence the reason I queried you on it since you cited it as the justification for treating MS differently.

    No, "monopoly" is not defined as "exclusive control" but rather dominance. Answers.com is not the legal standard used in the EU Commission or Courts.

    Note further, in the excerpts I quoted above (and throughout the judgment), "dominant position" and "Abuse of a dominant position" are used. Those were not arbitrary words used by the commission or court but legal terms of art:

    Dominant position: A firm is in a dominant position if it has the ability to behave independently of its competitors, customers, suppliers and, ultimately, the final consumer. A dominant firm holding such market power would have the ability to set prices above the competitive level to sell products of an inferior quality or to reduce ts rate of innovation below the level that would exist in a competitive market. Under EU competition law, it is not illegal to hold a dominant position, since a dominant position can be obtained by legitimate means of competition, for example by inventing and selling a better product. Instead, competition rules do not allow companies to abuse their dominant position. The European merger control system (merger control procedure) differs insofar from this principle, as it prohibits merged entities from obtaining or strengthening a dominant position by way of the merger. A dominant position may also be enjoyed jointly by two or more independent economic entities being united by economic links in a specific market. This situation is called collective (or joint or oligopolistic) dominance. As the Court has ruled in Gencor, there is no reason in legal or economic terms to exclude from the notion of economic links the relationship of interdependence existing between the parties to a tight oligopoly within which those parties are in a position to anticipate each one another's behaviour and are therefore strongly encouraged to align their conduct in the market.

    Abuse of a dominant position Anti-competitive business practices (including improper exploitation of customers or exclusion of competitors) in which a dominant firm may engage in order to maintain or increase its position on the market. competition Law prohibits such behaviour, as it damages true competition between firms, exploits consumers, and makes it unnecessary for the dominant undertaking to compete with other firms on the merits. Article 82 of the EC Treaty lists some examples of abuse, namely unfair pricing, restriction of production output and imposing discriminatory or unnecessary terms in dealings with trading partners.

    More background at:

    http://www.europarl.europa.eu/factsheets/3_3_2_en.htm

    and

    http://www.reckon.co.uk/open/Article_82

    By Anonymous Charles, at 9:34 PM  

  • and I suspect a majority would actually say they benefited from MSFT's inclusion of Media Player. I know I would.

    I run several different browsers, media players, html editors, graphics designers, and MS apps are often fighting to switch filetype defaults and app startup defaults (some like realplayer do that as well.), so no, not all of us benefit from MS bundling of apps. The interfaces (hyperlink editing for example) are also impaired with non-MS apps.

    Even the case for competitors being harmed is unclear.

    You can't possibly be serious. RealNetworks, Nullsoft, Apple, VideoLan, etc market media players which are harmed by the bundling because it raises barriers for OEMs and content providers to use non-MS players.

    By Anonymous Charles, at 11:15 PM  

  • "No, "monopoly" is not defined as "exclusive control" but rather dominance. Answers.com is not the legal standard used in the EU Commission or Courts."

    I wasn't talking about how Europe defines the term. I was querying your use of it to justify the action against MSFT. The fact that the Europeans drop the pretense of even trying to prove monopoly (a bar they could never scale imo) in favor of the much more nebulous "dominant position", just shows how fraught with subjectivity this whole area is.

    By Blogger MSFTextrememakeover, at 7:42 AM  

  • "I run several different browsers, media players, html editors, graphics designers, and MS apps are often fighting to switch filetype defaults and app startup defaults (some like realplayer do that as well.), so no, not all of us benefit from MS bundling of apps."

    So do I, and I haven't noticed MS apps doing this more so than numerous others. Regardless, that doesn't negate my specific point which was:

    "and I suspect a majority would actually say they benefited from MSFT's inclusion of Media Player."

    BTW, note the use of "majority" and not "all". I'm sure there are some like yourself who might answer that they didn't. But do you honestly think a majority of users would? I don't.

    "You can't possibly be serious. RealNetworks, Nullsoft, Apple, VideoLan, etc market media players which are harmed by the bundling because it raises barriers for OEMs and content providers to use non-MS players."

    I'm totally serious. Are you seriously citing a list that includes Apple/iTunes to argue that I'm wrong? I won't speak to Real, etc, specifically (though many would make the case that Real, for example, shot itself in the foot). However, the last industry stats that I saw said that the average user has 3+ media players loaded (i.e. your and my case is the norm, not the exception). WRT OEMs, have you bought a PC lately? There's no end of 3rd party craplets that they've taken money to load on there. Bottom line, the world has changed.

    By Blogger MSFTextrememakeover, at 8:28 AM  

  • MSFTextrememakeover:

    I wasn't talking about how Europe defines the term. I was querying your use of it ["monopoly"] to justify the action against MSFT.

    Well, if I mislead you by my initial generic use of "monopoly", then I apologize. Had my initial response been:
    "That is the reality of having a dominant position. The EU rules for dominant positions are different. They must (by EU Competitive law) avoid abusing their dominant position to the disadvantage of competitors and customers. A tactic allowed when not dominant becomes disallowed by virtue of having become dominant."
    You would have instantly recognized the nuance and we would have avoided this waste of bandwidth, right?

    The fact that the Europeans drop the pretense of even trying to prove monopoly (a bar they could never scale imo) in favor of the much more nebulous "dominant position", just shows how fraught with subjectivity this whole area is.

    And scaling that bar apparently neither MS management nor MS Lawyers ever contemplated either. 'Course we really can't blame them. After driving Netscape out of business, the US DOJ just nodded with a wink and a nudge, so MS really had to give it another shot (for their fiduciary responsibility to their shareholders), in spite of the repeated warnings from the EU commission that they were dead serious.

    And the EU's law isn't all that more nebulous than the US. There is just less history of it to review when evaluating the merits of one's legal position.

    "and I suspect a majority would actually say they benefited from MSFT's inclusion of Media Player."

    But the issue is that "majority" were not in a freely competitive market. MS bundled WMP to exclude the potential benefits from other players, and the majority didn't make that choice. They took what they were forced to use, including the impaired operation of competitive players (when anyone installed them or supported them). The appearance of "benefits" resulted from "abuse of a dominant position".

    BTW, note the use of "majority" and not "all".

    But "majority" isn't nebulous and subjective when you state it, is it. What, again, was wrong with "dominant"?

    Are you seriously citing a list that includes Apple/iTunes to argue that I'm wrong? I won't speak to Real, etc, specifically (though many would make the case that Real, for example, shot itself in the foot).

    The EU Commission antitrust documents re Microsoft are at COMP/37.792 - MICROSOFT. Go there and scroll down to their decision at 24.03.2004 - Prohibition with fines decision, Web publication of non-confidential version, and therein go to 5.3.2.1.4 on page 221 "Microsoft’s tying of Windows Media Player forecloses competition in the market for media players" and further look at paragraph (930) therein for a summary of the erosion of competitive market share from just April 2002 to January 2003 alone.

    There's no end of 3rd party craplets that they've taken money to load on there.

    But the EU commission's point is that MS expects its competitor's software to be treated as craplets while MS declares its WMP as a standalone product when MS sells it on Apple or Sun platforms, but "must" bundle it (for efficiency sake - lol) on Windows. When MS is encroaching on someone elses market as opposed to locking-in its own it expectes no one to notice ('course no one did when the exact same tactic was used against Netscape, so we can't blame MS for trying again).

    Bottom line, the world has changed.

    But the EU market isn't part of that world, or EU laws aren't part of that change, or bottom line, does MS just think it's special?

    By Anonymous Charles, at 9:50 AM  

  • Charles,

    I penned another point by point response and then decided to scrap it. We're getting into diminishing returns here. Suffice to say we disagree on most if not all of these issues. It happens, and I appreciate you providing the opposing view.

    By Blogger MSFTextrememakeover, at 10:31 AM  

  • MSFTextrememakeover:

    I am suprised by the disagreement, but appreciate your graciousness.

    I would offer a final point, that the EU Commission and CFI decisions and penalties are yet one more consequence of Gates' legacy, inept management, myopic vision, and "embrace and extend" tactics. I doubt the windows/longhorn/Vista architecture will lend itself to the interoperability disclosure requirements mandated by the EU. And as evidenced by the recent attempt to impair Google's desktop search app on Vista and impose DRM on everybody, Gates/Ballmer still don't get it. Look for more litigation in the future. Experienced management would not misread the clues let alone commit these mistakes, repeatedly.

    That all said, I am genuinely interested in your reasons to the contrary. You've given me a soapbox, thank you, please do take the last word for yourself.

    By Anonymous Charles, at 7:49 PM  

  • "And as evidenced by the recent attempt to impair Google's desktop search app on Vista"

    Huh? Improving Windows native search in Vista != "impair Google's desktop search". The indexer was designed to throttle usage in the presence of other apps. Google just didn't bother optimizing their code despite having the same access to early betas as everyone else.

    By Anonymous Anonymous, at 9:48 PM  

  • Wow, this ruling just makes me think that we really need to vastly increase our funding in China, which will dwarf Europe. From talking to people in China, however, we're going to blow it because we're not allowing enough autonomy. We need to vastly fund Chinese software written by Chinese people for the Chinese market. 1.3 billion people can't be wrong....
    China is the future, it is at least a Europe now, and can be worth 5 Europes in the future, now is the time to go big and get all the way in.

    By Anonymous Anonymous, at 10:05 PM  

  • "From talking to people in China, however, we're going to blow it because we're not allowing enough autonomy."

    Yes, and I see that the most recent head, who apparently was very good and starting to turn things around, just left. Not a good development - like several for MSFT lately.

    By Blogger MSFTextrememakeover, at 6:56 PM  

  • "As stated at paragraphs 1060 to 1075 above, the ubiquity that tying confers on Windows Media Player gives content providers an incentive to distribute their content in Windows Media formats and gives software developers an incentive to develop their products so that they rely on certain functionalities of Windows Media Player, in spite of the fact that competing media players are of similar or even better quality than Windows Media Player."

    That statement right there is a prime example of the absurdity of the EU ruling. Didn't anyone bother to introduce the EU to www.youtube.com? Those idiots in Brussels must be living in a cave.

    Its called TEH INTRAWEBZ you EU dorks. Who the heck cares what crapware has been shoveled onto my PC by Microsoft or anyone else. I click a link, download some Flash .swf, and a few seconds later blammo! I've got video + audio, and it sure as heck ain't WMV/WMA.

    This whole mess is a perfect example of why government regulation on Internet time is a crock. Thanks for solving yesterday's problem.

    By Anonymous Anonymous, at 10:00 PM  

  • China is the future?
    Perhaps, but not of paid software...

    By Anonymous Anonymous, at 7:35 AM  

  • The decision is now final, I understand, and avenues of appeal are exhausted. Criticising it is a bit futile now, as is picking a few choice bits out of a long, legal (read 'tedious') document and using them to show the judges in a poor light. These are people very well versed in law, who are unlikely to have just made the decision for the hell of it, or to piss of a US company.

    The challenge is how Microsoft will move forward, not how the ruling will be debated. We all saw this coming about a year ago, so I'd imagine there are good plans to move forward. Well... I'd hope there are...

    By Anonymous Anonymous, at 8:53 AM  

  • Outrageous

    Housing slump yields Microsoft loss on CFO's home
    Fri Sep 21, 2007 5:43pm EDT
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    ¥ € $ - Learn. Practice. Trade.SEATTLE, Sept 21 (Reuters) - The prolonged U.S. housing market slump has forced many a homeowner to sell for less than they wanted.

    Add Microsoft Corp (MSFT.O: Quote, Profile, Research) to that list.

    The world's largest software maker disclosed in a regulatory filing on Friday that it suffered a loss of up to $2 million in the sale of a home once owned by Chief Financial Officer Chris Liddell. The sale price of the home was not given in the filing.

    Microsoft hired Liddell in 2005, moved him from Connecticut, and bought his home on the East Coast for a price based on independent appraisals when the property did not sell within an allotted period of time.

    Redmond, Washington-based Microsoft sold the home in its 2007 fiscal year on the open market -- for significantly less than it paid.

    The real estate loss was included in a $2 million "relocation expense" for Liddell. A Microsoft spokesman would not disclose details of the transaction, but said a bulk of that relocation expense was for a loss on the home's sale.

    A native of New Zealand, Liddell joined Microsoft from International Paper Co. (IP.N: Quote, Profile, Research) where he was also a chief financial officer. (Reporting by Daisuke Wakabayashi)



    http://www.reuters.com/article/marketsNews/idUKN2142978520070921?rpc=44

    By Anonymous Outrageous, at 9:28 PM  

  • And the rich get richer... but do they deserve it??? And what the hell are shareholders doing??? Why is there no revolt. I'm all for human rights, but are these the best shareholder proposals we can come up with??? Meanwhile GOOG is up 7 again! At get this... 560!!

    http://biz.yahoo.com/ap/070921/microsoft_executive_compensation.html?.v=3

    By Anonymous Outreageous, at 9:31 PM  

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