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.
Totally agree. The EU has never been happy with the US dominance of the tech market, and Microsoft is an easy scapegoat. Most developers should know at this point that Microsoft has made a big push towards being more open (the new Office doc formats are completely documented and they just released documentation on the old formats)…
I’m happy to see at least one of the more web-centric blogs take a more balanced approach to this topic. Microsoft does yield its weight around occasionally, but the EU clearly has some resentment over US technical prowess.
In response, the US Govt. should ban all EU firms from operating here. But I am sure Google will oppose that!
Possibly, my favorite TechCrunch article ever.
To suggest that a $15 trillion/a economy is enriching itself by a one-time charge of a billion and change strikes me as a bit daft. Perhaps more than a bit.
The simplest explanation usually being the correct one, perhaps this could be explained by saying that the EU is a much tougher regulator and MS’ couldn’t get past them like they got past the lax American regulators, then support it by evidence of how tougher the EU has been in a number of other industries (emission, chemical toxins, gm foods, mobile providers etc).
But no, let’s go with the far-flung theory about a mighty EU vs US showdown featuring greedy evil beaurocrats, envy, jelousy, corruption… Kroes is a woman, perhaps you should’ve thrown in a love intrigue in the story as well?
@Rick: agreed.
@Martin: “the EU is a much tougher regulator” = “many countries in the EU border on socialism”
@Martin: Good point.
Correct me if I’m wrong; but if someone from country A commits a crime in country B, then that someone is prosecuted in country B. That fact does not change just because that someone also commits crime in country A.
I second #3.
Maybe if Microsoft start behaving they don’t have to keep buying people coffee.
So is this an order to pay or can they still wiggle out of it? I’m sure its just a part of doing business and they’ll get it back somewhere else like charging the world $1.00 more for Windows7 - it’s all good BillyG!
I for one am sick of the EU wielding a stick over U.S. companies and from my point of view, Microsoft should just say fcukem and not offer any of it’s products to the European countries. Let all the EU snobs find their own cash cows. I am so sick of the U.S. being treated like the bad step child of Europe. Fcukem.
anyone want to come up with a better image for the post, please send it to me and I’ll credit you with a link. An ATM machine properly photoshopped with the microsoft logo, for example.
With that kind of money, they could have bought cash down…all the startups covered by TC in the last 6 months.
not kidding ..
http://yooflix.com/ShowVideo.a.....xOp5mBY9IY
Well said Mike. This is an arbitrary, retroactive tax by an unelected official. I guess they need the $$ to gild their buggy whips or something.
@Martin
One point to conceed , ie: the U.S. being lax regulators, or else the mighty Google would already have their butts between a rock and a hard place.
What’s this? Tech Crunch showing some anti-European sentiment
Never.
@Martin: Agree completely.
To put this in perspective the EU budget
http://ec.europa.eu/budget/index_en.htm is almost 130 billion. As such fines against Microsoft ‘over the years’ amounts to only a little over 1%. The coffers are hardly awash with Microsoft fines.
I also take issue with the cup of coffee for $2.75. Technically possible but only if you just want a plain (small) coffee and are filling to shop around.
This article is 100% spot on, Michael, which is why we’d never see anything like it on Slashdot or the like.
If Microsoft wants to make buisiness on our soil, it has to comply with EU laws just like EU companies comply to the US laws on your soil. End of the story.
There is a major difference in how Europe and US sees anti-trust.
US is built on a capitalist system. Everyone living is supposed to produce efficiently and contribute to the economy.
In Europe, it’s a different story. Many countries have much more socialist foundations. Therefore the governments have more role in overseeing the competition in the economy.
Hold on, didn’t Bush ban all those European online gambling companies last year?
Do all Tech Crunch editors hate anything slightly left of their republic ideologies?
@martin: Well put.
@Steel: The EU wields a stick over anybody doing business in the EU. Get used to it, you do the same on your turf. Nobody forces Microsoft to do business in the EU but if they do, they’d better adhere to the rules.
By the way, you don’t get much of a coffee for $2.75 nowadays, not here in Iraklio, Crete anyway. Pettiest article I have read here so far.
Maybe the U.S. should start charging 100K per green card.
@Jonathan Street
I don’t know where you’re shopping for coffee that’s more than $2.75 a cup… O.o
Can’t think of anything to add to this spot-on post. Well said, Michael, well said. Oh, except the EU’s actions against Microsoft remind me of the screeching by some in our own country for a windfall profits tax on the oil industry.
What law did they break MrL?
Whatever TC.
With the US subprime mortgage mess, I do not think that the timing is good to deliver the “Start promoting actual capitalism” message. Maybe tougher regulations would have allowed to avoid it.
@23
Coffee starts at $2.50 here in London and if you really like it strong and creamy you can buy a cup for $6- that just from the major chains!
http://www.exiva.com
share your life, treasure the privacy
Hey what can you do, Microsoft is an obvious target, I think we should go after some big European companies here.
Maybe Shell or SAP.
Hey ! It has nothing to do with MS being US !
France Telecom is another major “ATM” for EU… And France Telecom (owner of the Orange mobile brand) is not american, as far as I know !
Stop publishing this kind of “half information”.
Seriously, this article is full of Anti-European sentiment.
“The EU’s ATM Machine” Oh, nice start!
“EU visited the Microsoft ATM machine” How witty.
“EU’s chief Microsoft-taxer, errr, antitrust chief” Hahahahaha! It’s funny because you deliberately said something and pretending it was an accident. Hilarious!
“and start promoting actual capitalism within their borders” Way to go, you have actually now said the EU doesn’t support capitalism.
Oh, and should I mention the picture? Calling the European Union and Europeans as well, leeches.
WAY TO GO. Who knew Tech Crunch should only be read by Americans.
–Europeans not welcome–
@wraith808: I’m not a coffee drinker but out and about in Edinburgh the cheapest I see is 80p. That’s ~$1.60 in the cheapest diner I know about.
I’ve seen £2.95 charged in half-decent restaurants. That’s getting on for $4, again for a basic cup.
Nick, #27, sounds like he knows his coffee better than me but that’s my experience.
Michael Arrington, you are my new hero. You put in words what I have been thinking in my head.
Anyone who thinks Microsoft does not have a monopoly or two in Europe should look again. Really.
Except for design companies, you will not find a single company that has desktop machines running anything else than Windows. While that is fine, it makes it impossible for any other company to enter that market. The only thing one can do about it, is making sure the de facto standards are open.
Neelie Kroes is doing a good job.
#32: your head must hurt
They broke no laws, we just wanted a cup of coffee on the back of a US company.
If you sell in the EU, you work and sell by EU laws; therefore you are subject to EU laws and EU regulators. If you sell in the US, you work and sell by US laws; therefore you are subject to US laws and US regulators.
If a US company could trade with impunity in the EU or vice-versa then a comapny could trade with impunity in another country. Neither side would agree that that is acceptable.
In UK coffee is aprox $4.18 (£2.10)
“But perhaps it’s time for Europe to stop looking for the Microsoft handouts, and start promoting actual capitalism within their borders.”
Or maybe large American corporates should treat local laws less like guidelines and more like legislation. Stop whining.
Bloody colonials.
@17 - MrL
What we are saying is “change the freakin law”
Come on, Michael, how can such a respected tech blogger like you write an article about a $1.3bn fine without even explaining why Microsoft got fined?
Oh wait.. gratuitous EU bashing! Bashing France on twitter wasn’t good enough? Not France or the UE’s fault if you weren’t invited to TED, you know?
What a group of nationalist guys you are !
Anyone talking bad about one of your american firms is evil ?
Ok. Continue to think USA is perfect and the rest of the world is bad. You’ll sleep well tonight.
We’re too busy drinking coffee to change our laws right now, come back later.
This is probably the worst article I ever read on TechCrunch.
Unprofessional. Disappointing.
How about some random bombing over Europe now?
More like “Microsoft is the EU’s Frank Lucas.”
I think it’s funny that people are throwing “socialism” around like that should be enough to horrify people. Try leaving the country once in your life.
Sincerely, I expected better from Techcrunch. These considerations and many comments are based just on ignorance about what EU is and how it works. And about ignoring facts. EU does not fine just Microsoft or US firms. EU has a set of laws which every of 25 sovereign european countries accepted to abide to. EU fines whomever don’t respect them: US firms, European firms and even European Governments when they don’t respect the rules as we in Italy have come to learn way too well. Just to talk about some cited US firm, Apple with its iPhone circumvented a few european laws, but then obliged to court’s rule and was not fined. Microsoft didn’t (repeatedly) and was fined. It is that simple.
Sincerely it is ghastly to read still in 2008 considerations about some european countries being “socialist” and confounding national governments behaviour and attributions with EU ones. We are no longer in 1980.
How to write a crap :
fucuse on a reduced part of a fact and hide other related facts.
It can’t be burried ?
A lot of comments here seem to suggest this to be a result of socialist government. That confuses me. Since when is pursuing free trade (which Kroes does) considered socialist?
Protectionism, that would be a socialist approach, but believe me, Kroes hates protectionism. I bet she wishes she had the authority to stop the support the farmers get in Europe. She would, without a doubt.
@ Tony Arringa
what a nice lesson of peace and liberty !
Hmmm… Is not US the country of sue ?
ah ah
You morons.
Michael,
Don’t listen to the negative comments above - your article is spot on. Having lived in the UK for the last 12 years I can say with certainty that if it is American and it is in even the slightest way objectionable the UK or the EU will find a way to extract their pound of flesh. That is not to say I am defending MSFT at all, but I am merely commenting that one never sees Dassault or SAP with these actions taken against them by the EU regulators, irrespective of those company’s business practices in their particular verticals…