Microsoft in Trouble

[Zeeble]

I read the Times today that MS is in the process of being fined by over 400 million euros for breachng competition laws.

 

[Zeeble]

I would have posted a response here, but it would have been the same thing as octobus has just said.

 

[theparrot]

True, government has many tools at its disposal, one of them being fines. Why not fines? It should work eventually, and it denies companies the use of ill-gotten funds.



Maybe not at you, but they did stick their proverbial big guns on PC sellers and say, "do what we want or else." PC sellers who refuse to cooperate would be unable to compete with those who toe the official MS line.

Why not fines? becuase they do not reconsitute that whome is claimed to be harmed. Again if they are being honest they would give the money to the parties alegidley harmed. Instead, they keep it and the now saved consumers pay more to pay off the fines.

The last time I checked there was only one provider of Windows OS. Thus Microsoft has a pure monopoly thanks to producing %100 of the market output.

Some general characteristics of a monopoly firm:

A single seller
(Microsoft)

Produces branded goods
(MS Office, Windows and etc)

Creates barriers to entry
(e.g Windows source code is not licensed to third parties)

nope, by your writing every firm is a monoply, incuding me and any programs I have written... even my special version of 'hello world , I am an monopoly to octopus" program I just wrote. No one else can sell it , I own the copyright. Only Ford sold escorts so they are a monolpoly? Only apple Macintosh computers so they are a monopoly?

Get real...

MS office is a word processor, a spread sheet, a db program etc...

shall I bother to point you to alernatives?

http://www.wordperfect.com/
http://www.openoffice.org/
http://www.netbsd.org/
http://www.gimp.org/
http://www.openbsd.org/
http://www.maths.ox.ac.uk/help/faqs/latex/slides.shtml
http://www.postgresql.org/
http://www.abisource.com/

[qoute]
Maximizes profits
(look at revenue/profit for Microsoft Corporation. NOT a single firm in a monopolistic competition can have such ratios, ONLY a firm with a monopoly can sustain such profit level in the long term.
[/quote]

Just how long is the long term? And all firms maximize profits, some just are able to do better at it then others.

[qoute]

So if you want to play a DirectX game (like almost all PC games). how many OS choices do you have. It's not a question of someone using a gun to force buy their products, that is not a condition for a monopoly. In addition the value of of their products is partly superficial, because of lack of any competition. So to say that government is stealing value of their products...
First of it's not even true. A fine is not a tax. Those are two completely different things.

Using your logic with monopolies, Standard Oil's monopoly should have left intact. Neither did Rockfeller force his customers to to fill the tank at gun point.[/QUOTE]

and using your logic, anyone who sells anything branded is a monoply, and yes I agree Standard Oil shoud have been left in tact. Thank you for understanding finally, though most of your post has me doubting you did.

And no, a fine and a tax are not two completely different things when they are implemented in the same ways.

The value is such that they are undercutting everyone else in the market yet they make exess profits??? Which is it now? They are unfairly competing or they are makiing execess profits? or do we just speak with a forked tough, whichever makes our case each time?


Why would I want to play a direct X game and not just a game?? you again use such narrow scope that you force things that are not that limited to seem so....

I would have posted a response here, but it would have been the same thing as octobus has just said.

then you would have been just as wrong as they are..

 

[armstrong]

Why not fines? becuase they do not reconsitute that whome is claimed to be harmed. Again if they are being honest they would give the money to the parties alegidley harmed.

Ah, but the money does eventually trickle to "the people". Every government raises taxes, or takes out loans; any money raised through fines means that much less taxes, or less loans. Its possible for the government to distribute the 400,000,000 Euro, but because of the number of affected, the amount might be too small to be worth the bother. I mean, how effective would it be to distribute 10 Euro each to 40 million MS license holders? Now maybe when the third fine comes around, perhaps another magnitude higher (4 billion!?), then it might actually be worth distributing.

Instead, they keep it and the now saved consumers pay more to pay off the fines.

You're saying that the fines will cause MS to increase its price? You mean MS is now charging lower prices than it could and still make the most possible money? I think not. They know very well how much they can sell at various pricepoints, and of course select the pricepoint that maximizes profits. If they increase their prices because of the fines, then they will actually make less money. Bill is smarter than that.

 

[Zeeble]

nope, by your writing every firm is a monoply, incuding me and any programs I have written... even my special version of 'hello world , I am an monopoly to octopus" program I just wrote. No one else can sell it , I own the copyright. Only Ford sold escorts so they are a monolpoly? Only apple Macintosh computers so they are a monopoly?

wrong, are are not the sole producer of that type of program. When assesing whether MS is a monopoply, you also need to take the size into account.
e.g. You produce and unbranded program, which gets you around 0.001% market share. MS produces a BRANDED OS which has well over 90% market share. MS has a monopoly in the fact that no other can produce Windows, whereas another CAN produce the same program that you have. The is the difference between perfect competition and a monopoly. The OS market is not perfect competition, a duopoly or an oligopoly, which leaves only monopoly.

 

[theparrot]

Ah, but the money does eventually trickle to "the people". Every government raises taxes, or takes out loans; any money raised through fines means that much less taxes, or less loans. Its possible for the government to distribute the 400,000,000 Euro, but because of the number of affected, the amount might be too small to be worth the bother. I mean, how effective would it be to distribute 10 Euro each to 40 million MS license holders? Now maybe when the third fine comes around, perhaps another magnitude higher (4 billion!?), then it might actually be worth distributing.

Actually, I am guesing it will trickle from the people. When an organization gets money it gets a thirst for it. This means soon one of two things will happen. Either they will raise taxes to replace the 'missing' money or they will suddenly start to find other companies that must pay this type of fine. You see this happen all time time. Looks at what the US States have done with the tobacco settlement money. Looks at what happens when bonds are taken out to pay for 'one time' consturction of bridges or worse sports stadiums.

And why are you talking now about giving it to the people, last post you told me the victums of the 'monopoly' were the computer manufactors? Is there really so many of them it still is not feasable to

You're saying that the fines will cause MS to increase its price? You mean MS is now charging lower prices than it could and still make the most possible money? I think not. They know very well how much they can sell at various pricepoints, and of course select the pricepoint that maximizes profits. If they increase their prices because of the fines, then they will actually make less money. Bill is smarter than that.

Not exactly. When I say pay more I mean in economic terms not necessary monitary costs. This can be in terms of time or money, or even oppertunity costs. If MS can not bundle the things they do, then people will either pay by going without them, spending the time to find freeware alternatives and install them.

wrong, are are not the sole producer of that type of program. When assesing whether MS is a monopoply, you also need to take the size into account.
e.g. You produce and unbranded program, which gets you around 0.001% market share. MS produces a BRANDED OS which has well over 90% market share. MS has a monopoly in the fact that no other can produce Windows, whereas another CAN produce the same program that you have. The is the difference between perfect competition and a monopoly. The OS market is not perfect competition, a duopoly or an oligopoly, which leaves only monopoly.

http://language.bin.org/ref/dict/?t=Monopoly

No, I don't. This what I am saying is wrong. Reread your classic econ texts again. A monopoly has to be over the commodity not a brand. You can even have a single supplier and not have a monopoly if there are low barriers to entry still. In this case the commodity is OSs. not a BRANDED OS... the fact you have put braned os, should right there tell you you lost your case in an economics sense. Now are governments going this route to justify the fines, yes... does that make them right in an economics sense? No.

BTW, one of my programs once has a usage rate in the 90% of the online users of a brand of computers, and some of them are branded.
See you are using defination #2... but that is not the economic defination.

 

[Zeeble]

I find it rather funny that you think that 400 million euros actually has an impact on taxes and the such like. 400million is not much. The UK alone raises £500bn in taxes. So the whole of europe is more than the US. Anyway, the EU does not decide spending on things like roads etc individual govt.s do. If the UK alone pays £30million per day to the EU, then I am sure that 400 million euros does not make a massive difference. This fine is not money orientated, it was soley about punishing MS for breaking the law.

 

[theparrot]

I find it rather funny that you think that 400 million euros actually has an impact on taxes and the such like. 400million is not much. The UK alone raises £500bn in taxes. So the whole of europe is more than the US. Anyway, the EU does not decide spending on things like roads etc individual govt.s do. If the UK alone pays £30million per day to the EU, then I am sure that 400 million euros does not make a massive difference. This fine is not money orientated, it was soley about punishing MS for breaking the law.

Ah, do now we resort to the fuzzy logic game when real logic fails us?

How many hairs does a man need to have to stop being bald? one, two, a hundred etc?

If someone unjustly fines you, it is ok when it is how much?

And since 400 million euros does not make a difference, maybe they will agree to just burn it?

Quote honestly in micro economic terms I would say the same about $1... you can scale it up or down as you want, but the same basic principals apply.l

 

[Zeeble]

ok, please don't insult me.

I was simply trying to put down the argument that the EU is only doing it to fund itself. It has nothing to do with the EU, it has to do with MS breaking the law. 400 million euros is a lot, even to MS. This will draw some blood and make them think twice about exploiting the market in the future.

 

[theparrot]

ok, please don't insult me.

I was simply trying to put down the argument that the EU is only doing it to fund itself. It has nothing to do with the EU, it has to do with MS breaking the law. 400 million euros is a lot, even to MS. This will draw some blood and make them think twice about exploiting the market in the future.

Now 400 millions euros is a lot, and a message back it was a triffle?

BTW, you say the OS market must be a monopoly? Yet, my computer can quad boot into four different OSs... that is my choice just at boot time. If I change hardware I have even more choices. With the BSD code base, the barriers to entry are not even that high any more, and apple has shown this code base can be used to make a usable OS.

I don't know what law it is the broke, as I do not know EU law. I do know if they claim the law claims that the law that was broke was a law for being a monoply then it is typical government double speak. I also think it sets a dangerous precendent. I also made the same statements about the US case.

 

[Zeeble]

ok, 400 million is a lot to MS, but not to the EU, ok?

There are no barriers to entry when it just comes to coding your OS, BUT if you actually want to get it out there, then you need to actually make your own brand of computers, like Apple has demonstrated.
Take this scenario: You make a brilliant OS, better than XP, you approch MS manufacturers such as Dell, and ask them to convert to your OS, they will tell you to go back to your day job. Simply because they can't shift computers unless its running windows.

 

[theparrot]

ok, 400 million is a lot to MS, but not to the EU, ok?

There are no barriers to entry when it just comes to coding your OS, BUT if you actually want to get it out there, then you need to actually make your own brand of computers, like Apple has demonstrated.
Take this scenario: You make a brilliant OS, better than XP, you approch MS manufacturers such as Dell, and ask them to convert to your OS, they will tell you to go back to your day job. Simply because they can't shift computers unless its running windows.

I still think the concepts hold whatever the amounts, the pricipals are the same. As one US sentator once said, a billion here, a billion there and pretty soon you are talking about real money.


From an economic sense, the fact no one will buy your product does not matter. And the advice to not quite your day job to sell your OS is a good one, as OS are becoming commeditites, there is little profit left in selling just an OS these days, hence sun opening up Solaris, and BeOS and OS/2 never making headway. The fact the markets will not accept another OS is not the economic definition of a monopoly. So the goverment made up a new one it seems.

It is sort of like freedom of speach, I have that, but I do not have the rights to a printing press. I can make an OS, and try to sell it, but I do not have the rights to a market?

Now the US States accepted from MS as part of the penalty, the MS would give software for free to schools.... seems from what you said earlier this actually would help MS keep selling their products and not hurt them?

so what is the purpose of this law and what is the government hopeing to gain from enforcing it? It is not to create a more competive OS market is it?

 

[Peter]

with regards to monoppolies, the government do not veiw a monopoly as a company having 100% market share of a product type sales. They consider a monopoly as a company that dominates over a % of the market share hence why companies both in the EU and the US have to go through the Monopolies and Mergers Commission (or similar organisation in the US) before they get approval on merging or buying another company out.

 

[Zeeble]

Ys thats right, and with good cause. I think the M&M Commission steps in at 25% when a company wants to buy out another one.

 

[Peter]

yeah thats right or if the company earns over £70 million there is a pdf on how they operate and on page 14 they give out on what conditions must be met.

http://www.competition-commission.org.uk/rep_pub/rules_and_guide/pdf/15073compcommguidance4final.pdf

 

[Zeeble]

Just remembered this thread was here, nice info filth.