The European Union just bought every one of their citizens a cup of coffee. Or at least, they’re giving them the equivalent. Their most recent fine against Micrsoft - a whopping $1.35 billion, will go directly into the EU’s budget. It works out to about $2.75 for every EU citizen.
Some notable publications are blinking, at, among other things, the size of the fine (a record), the possible lack of legal justification and the potential costs of doing business in Europe. The NYTimes said “The commission’s willingness to enforce vigorously its interpretation of what constitutes unfair competition potentially raises the costs of running a successful business in Europe for many American companies. It might pose problems for companies like Apple, Intel and Qualcomm, whose market dominance in online music downloads, computer chips and mobile phone technology is also being scrutinized by the European Commission.” The UK’s Guardian went further, saying “But some legal experts questioned the EU’s move. Denis Waelbroeck, competition partner at the lawyers Ashurst in Brussels, said: “While such a fine will no doubt do wonders for the commission’s image as a tough regulator, some might consider it unfair, not least since the commission refused to tell Microsoft what would be a ‘reasonable’ amount to charge for patent licences despite being asked several times.”"
This isn’t a crushing blow to Microsoft by any means. It’s equal to about two weeks of operating profit. And they have a long history of paying fines for antitrust abuses - $750 million to AOL/Time-Warner in 2003, $1.1 billion to California in 2003, $536 million to Novell in 2004, $1.6 billion to Sun in 2004, $775 million to IBM in 2005, $776 million to Real Networks in 2005. Etc.
But EU fines against Microsoft over the years now total €1.68 billion. And they are far from done - last month the EU opened two new cases against Microsoft, on behalf of a group of European software companies. This is despite the fact that Microsoft is routinely raked over the coals by U.S. regulators for the same issues the Europeans bring up.
The last time the EU visited the Microsoft ATM machine, a few congresspeople sent them a letter telling them to back off, that it was their job to police U.S. companies against antitrust abuses. That letter pretty much went nowhere.
EU’s chief Microsoft-taxer, errr, antitrust chief, Neelie Kroes, seems determined to make a name for herself by filling the EUs coffers. But perhaps it’s time for Europe to stop looking for the Microsoft handouts, and start promoting actual capitalism within their borders. Google, Apple and Mozilla, among others (including Germany’s SAP), seem perfectly able to compete against Microsoft without crying for help every time users decline to use their products.
Those who can, do. Those who can’t apparently live in Brussels and engage in a legalized shakedown of Microsoft every couple of years.
Watch out, Google. You’re next.
@All those posts about socialism in Europe
Didn’t the dutch invent capitalism anyway? Which caused the English to invite the dutch to invade in 1688 in the Glorious Revolution, so they could make lots of money.
@Michael Arrington
Clarifying my post above, I think the EU fine is a blatent attack on a US company and is unfair, especially the bit about including IE with Windows - but you’ve got to say why, not just attack the EU for regulating a US based multi-national company operating in the EU. Unless you like provoking such a debate.
Well, I think you vastely underestimate the low value of Dollar vs Euro now.
$2.75 would not even buy a coffee in a decent coffee shop Roma or Paris…
This post is such an example of americans anti-european feelings that it’s pathetic. My guess is that you should stop admiring your own navel and start realizing there is a world out there. Well, sorry, I forgot you are in SF ! So you’d first need to realize there is a country around you, and then a whole world beyond that.
When foreign company break business rules in the US, they are not fined ?
Really ? Even american decent people told you that, how come you could not figure it out by yourself ?
As for GMO, I would love to see you start on this one. I’m sure we would read another masterpiece of the kind.
First, GMO in Europe would not be used to feed the billion people crying for food. Please do not mix up everything.
Second, GMO seeds are sterile (I bet you did not know), and must be bought each year (you can’t use what you grew), which is the WORST possible solution for third-world countries needing food.
And I’m not even talking about the biological hazard that could just make some non-OGM plants to simply disappear from the surface of the earth.
Now, If you don’t SEE why this could be bad, …
With the greatest respect, I’m not sure I agree with absolutely all points of this post, however, I noted something similar myself on TechCrunch UK recently:
“European regulation is the one bug Microsoft just can’t nuke”
http://uk.techcrunch.com/2008/.....cant-nuke/
We are much nicer to European and Chinese companies as far as competing with U.S. companies in U.S. is concerned. I am not suggesting that U.S. needs to change their policies. But it wouldn’t hurt to see the powers in white house do something to save U.S. businesses get fined now and then.
Timothy, you weren’t nice to British Airways and Virgin - and unlike Microsoft, they actually fly our flags on them. Imagine the outcry if the Windows logo was the American flag and then we fined them.
As for saving them getting fined, how? Telling foreign countries what to do, I think that might already happen!
Jerome & Michael,
If the EU didn’t pay farmers not to grow food on up to 10% of their land with the Common Agricultural Policy then there would be no need for GMO anyway because enough real food would be being produced.
I asked this before and still have not got an answer, as Matt S also asks: what laws are they accused of breaking?
Hey I want one of those green highlighted comments as well..
Andy - agree, although the U.S. isn’t any better when it comes to farming subsidies.
Mike Butcher - never, ever, ever disagree with me. Even privately.
ok, i have to take off for a meeting. No comments that disagree with me while I’m gone, please.
#79
Michael, there’s already more than enough food produced in the world to feed every person - I think you should look first to free-market capitalism to see why it never reaches the thirld world, not Europe’s opposition to GM foods.
And does your heart bleed for Africans dying of AIDS who are denied medicines because of TRIPS even when the R & D on those medicines have been recouped many times over in the first world?
With such a fantastic system as neo-liberalism, it must be gratifying to have no poor, sick, uneducated or homeless in your own country. All of those social democratic countries outranking the US (dropped another 2 rankings to 12th in the last report, oh dear!) on the UN HDI must have gotten lucky for the last 50 years. With such a high GDP, the US rankings on infant mortality, health care and income distribution should be a source of embarassment to all Americans. As long as you all keep believing that you have the best socio-economic system in the world, and ignore *all* available data, everything will be just fine…
Monopoly is good. Greed is good. Equality is bad. Sharing is bad. Is that how it goes?
to quote the famous bank robber, Willie Sutton:
“…because that’s where the money is”
whose to blame EU? not me
The EU needs a big kick in it’s apathetic behind. They would still be wearing wigs and fluffy shirts if it weren’t for US innovation and know how.
MSFT today is lot diferrent than it was few years ago.
Besides, MSFT created thousands of jobs new jobs all over the world.
Instead, GOOG only helps its employees and shareholders, it actually took jobs away for many, killed lot of startups in their early stages because they cant compete with Google’s brand and their power in distributed storage. It killed whole offline ad industry, leaving them on the roads diverting the money into its shareholders pockets.
Who is better? Google who took away jobs or MSFT who created thousands of jobs never existed before? Google is the modern day’s monopoly.
..also, if EU truly wants to be on par with the US, they need to re-think their ‘overly generous’ social programs, immigration policies and anti-entrepreneurial business attitude. Their high standard of living and social welfare wouldn’t be possible without the US economic engine…
Yes, if the EU wants high crime & homelessness, follow the US!
You accept we have a high standard of living though, excellent.
As for the US economic engine, I think its breaking down.
both countries are great - you can’t have your cake and eat it too
I am not sleepy yet but there is nothing to do here in France at 1am. So let me bother my american friends
I agree with most of you concerning the feeling that we in Europe have more to complain about European companies than American ones. Lots of them have a monopolistic behavior in much more important sectors than the software industry (transportation, electricity and water supply for example). But I think you missed one point. Technology here is more expansive than in the US. Let’s take a few examples :
Today on Amazon.com/Amazon.fr
Windows Vista Business Edition - Price in France: 183 euros ($275)
Windows Vista Business Edition - Price in the US: $215
Today on Apple.com/Apple.fr
Apple Macbook 13″ 2,1Ghz - Price in France: 835 euros ($1,256)
Apple Macbook 13″ 2,1Ghz - Price in the US: $1,099
I know this is not completely fair: companies don’t adjust their prices directly on conversion rates (I took Google’s ones). That said, this is quite a big difference: 10% for Apple and much more for Microsoft (all the prices are without VAT, so it’s not because of our taxes). And I don’t think there is a huge additional cost concerning localization, as all those products come from China anyway… So I let you multiply the additional profit by the number of units sold in Europe. Don’t we largely exceed this lonely billion? Who is the cash cow?
Anyway, I’m quite happy with American products and will continue buying American, just because it’s the best and because (as some of you said) Europe is currently completely crazy…
(sorry if I misspelled some words, English is not my mother tongue…)
I’ve been debating unsubscribing from TechCrunch ever since the someone lost their panties debating what made Scoble cry, but this does it.
I’m done.
Have fun discussing comScores, guys.
..yes, EU has been riding US coattails for far too long. maybe this US downturn will shake them out of their stupor.
Love how Michael always can bait Europeans into Techcrunch. Especially the Frenchies are all over the place.
Anyways, this blog grew just exactly from plain stupid posts like this one. So why freak out about it. Nobody in the EU gives a damn about TC or Michael.
I am just glad that Google will pay for the next cup of coffee. 30 days vacation and a 35 hrs work week are hard enough to survive. A free coffee during lunch time is the minimum we can expect.
As an EU citizen and I’m glad our system works and rules apply to everyone. It’s not like Microsoft was the first company being fined by EU. Even EU’s own countries are fined when they break the rules. Don’t belive me?
http://europa.eu/rapid/showInf.....anguage=en
Is the EU anti-German? Regulators have been working to stop anti-competitive behaviour by E.ON, they have won:
http://www.iht.com/articles/20...../power.php
Same anti-Microsoft woman!
“The EU needs a big kick in it’s apathetic behind. They would still be wearing wigs and fluffy shirts if it weren’t for US innovation and know how.”
Nemrut,
first programmable computer was invented in the UK
RAM invented in Manchester, UK
The light bulb was invented by Joseph Swan, a Briton - a year before Edison
LCD’s was invented by Britain’s MOD (because it didn’t want to pay royalties on Cathode Ray Tubes and they broke alot - in combat situations)
The Jet Engine - another British invention (invented before WW2), though may be toss up with a German bloke.
That’s just a few…
Americans are good with money, most inventions do not come from Americans but appear to be so because they come out of (or completed products come out of) US companies or companies funded by Americans.
By the way we still wear wigs, well judges do.
“Their high standard of living and social welfare wouldn’t be possible without the US economic engine…”
The EU’s economy is larger than the US’s? If you think this way then maybe you shouldn’t retaine so much of your military forces in Europe, and coduct operations that benefit the EU more than the US, then the European countries would have to spend sufficent amounts on defence rather than paying people not to work.
Neelie Kroes is a c*** and so is the rest of the EU extortionists.
oops, by ‘is’ i meant ‘are’
@120
Oh, crap! Phil is gone. TechCrunch will never be the same …
126 - wow, skillful debate I see. What has she done to you? Are all regulators extortionists or just the ones who actually carry punishment for breaking rules in their territory?
To #20:
The reason all EU gambling operations pulled out of the US was not because they were banned, it was because they were banned from all access to cash of people living in the US based on government legislation. See this explanation:
http://www.betfromanywhere.com.....n-the-usa/
@125 Andy, …it doesnt matter who comes up with the idea first, it’s about the ability to successfully execute on the idea and achieve mass adoption.
In terms of military spending, EU countries are perfectly happy to have US foot the bill. Doing otherwise would result in widespread anarchy and even more people sitting on their ass while collecting government handouts..
Nemrut, the TVs aren’t made by American companies, phones aren’t - its all Japan or China, we’re fine with that in the UK - free trade and all, but I guess Americans would take a different view on that in this instance? Especially in states like Ohio?
As for millitary spending, you’re footing the bill for your own wars - get over it, what should we be paying for? Wars we don’t see just or want any part of?
I love the coffee or latte analogies:
http://greacen.com/greacen/?post=941
CG
@132 Bob..innovation in the US, production in China/India. But of course, that is getting turned on it’s head very soon.
US carries the stick that keeps everyone in check. Without it, lesser countries would have no fear of reprisal for careless aggression. If it were not for US intervention, Bosnia would still be at war while Europeans debated the merits of more foreful discussions..
@132 Bob..innovation in the US, production in China/India. But of course, that is getting turned on it’s head very soon.
US carries the stick that keeps everyone in check. Without it, lesser countries would have no fear of reprisal for careless aggression. If it were not for US intervention, Bosnia would still be at war while Europeans debated the merits of more forceful discussions..
u suck.
Thanks for the “two weeks of operating profit” perspective.
The enemy of my enemy is my friend. Mugro$oft gave the EU the many reasons to fine them, so stop blaming EU already.
@138
WTF how can you not blame EU? They are so absolutely off track with these fines it is absurd. It is the exact equivalent to fining a black person for being black. You may not like M$, but they have not broken any real laws here. Being fined 1.6 Billion for not being open? That is the stupidest bullshit I have ever heard.
I am soo sick of socialism, and soo sick of people asking for handouts. At least Microsoft has earned there money the real way. What are they going to do if MS doesn’t pay? Ban windows XP? Europe is sooo jealous of the US tech sector they whine and cry like little girls? Hey Europe, how about you guys stop sucking each other off and make something useful for the rest of the world. Your country is wack, get off our nuts!
@ 139. Europe isn’t a country, judging by your post you’re smarter than most Americans - scary.
Regulators regulate, they don’t make laws, it does not have to be outlined in laws but in regulations set by the regulator - this is the same in every country, the US is just corrupted by MS ( & Google’s ) money.
Fining an anti-competitive monopolist for being an anti-competitive monopolist is just like fining somebody for x because they are x … but not for being black because people don’t choose to be black, MS chooses its actions.
All I gotta say is… GREEN ENVY.
http://www.freshsupercool.com/.....reen-envy/
Bob - what if it’s $10 billion next year? Is that ok?
It depends what Microsoft has done, is your problem the reasoning behind the fines or the cost? Make up your mind.
hah. its the fact that europe is trying to regulate microsoft for stuff the U.S. has already regulated them for. And that they are now going back for second helpings (plus third and fourths with the new investigations).
So they got punished by regulators in other markets? Thats how regulators work, Japan & South Korea have been known to regulate when other countries have done so - would you prefer the EU dropped it and 27 nations started proceedings? Why should the US regulator be the only to press if the company operates against regulations in other jurisdictions, the US regulators don’t speak for the EU of course. Should we trust US regulators who dropped MS investigations when Bush took over? Doesn’t that smell funny?
Second helpings because Microsoft continued to flout the rules, the other investigations are again based on potential regulation violations - the EU has investigated other companies again, although Microsoft is the first to ignore rulings.
If someone is interested in actually knowing something about this matter instead of going on with hate rants generated by this post, which personally I judge very offensive and based on ignorance on the specific matter, there is a good piece on Washington Post, which explains what happened and why Microsoft was fined: http://www.washingtonpost.com/.....=rss_world
Even better, if someone has some time to spend and wishes to know in the detail how things are really gone, he can read all the papers. They are linked by this Press Release of European Commission, which explain very clearly why Microsoft has been fined.
So everyone can make up his opinion about how much substance this post had.
Sorry, cat ate the last link. Here it is: http://europa.eu/rapid/pressRe.....anguage=en
Bob, you’re getting boring. I get your position, you love it. k, move on.
The DoJ took action against British Airways & Virgin Atlantic despite them being punished in the UK by the Office of Fair Trading, should the US not have punished them? As they did, because BA & Virgin pricefix effected planes flying to & from the US?
Wow, what a debator - ignore fact, get bored when proved wrong - excellent.