decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books

Gear

Groklaw Gear

Click here to send an email to the editor of this weblog.


You won't find me on Facebook


Donate

Donate Paypal


No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
Cost of Doing Business | 105 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections thread
Authored by: nsomos on Wednesday, June 27 2012 @ 11:10 AM EDT
Please post any corrections in this thread.
A summary in the title may be helpful.
Please check against source before suggesting correction
to a transcript, as we do not correct errors in originals.

Thnx -> Thanks

[ Reply to This | # ]

Point 142 of the judgement
Authored by: Ian Al on Wednesday, June 27 2012 @ 11:35 AM EDT
142 Moreover, allowing Microsoft to charge remuneration rates reflecting the value resulting from the mere ability to interoperate with Microsoft’s operating systems – in other words the strategic value stemming from Microsoft’s power in the client PC operating systems market or the work group server operating systems market – would in effect allow it to transform the benefits of the abuse into remuneration for the grant of licences.
I read the point several times and it always seems to come to the same thing. The Commission were wrong to assert that the WSPP agreements for payment were in line with the principles demanded by the law. In other words, the 'license' payments agreed by the Commission were unlawful and the money must be paid back to Samba and no future users of the interoperability information could be charged, at all.

I think that the small discount that Microsoft obtained for the extended and repeated failure to comply with the Commission's instructions might not have been outweighed by the money they must now return to the Samba group, but the principle that they must not demand license fees ever again for such interoperability in the future is a much greater loss to their business model. I'm thinking along the lines of FAT patent licenses and whatever they might be thinking of to prevent compatibility with NTFS and any of the rest of their software systems.

---
Regards
Ian Al
Software Patents: It's the disclosed functions in the patent, stupid!

[ Reply to This | # ]

  • Costs must hurt - Authored by: Anonymous on Wednesday, June 27 2012 @ 11:44 AM EDT
Oracle intervention
Authored by: hardmath on Wednesday, June 27 2012 @ 11:37 AM EDT
Note that Larry Ellison held an antipathy toward Microsoft bordering on
hatred dating from their move into enterprise database markets.

---
"Prolog is an efficient programming language because it is a very stupid theorem
prover." -- Richard O'Keefe

[ Reply to This | # ]

Off Topic Here
Authored by: SilverWave on Wednesday, June 27 2012 @ 11:39 AM EDT
:-

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

News Picks Here
Authored by: SilverWave on Wednesday, June 27 2012 @ 11:40 AM EDT
:-D

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Comes Stuff Here
Authored by: SilverWave on Wednesday, June 27 2012 @ 11:40 AM EDT
:-O

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Nelson "Ha ha!" thread here:
Authored by: SilverWave on Wednesday, June 27 2012 @ 11:49 AM EDT
http://www.youtube.com/watch?v=rX7wtNOkuHo

The case has wound up costing Microsoft a grand total of (euro) 1.64 billion.

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Microsoft Loses Its EU Appeal ~pj
Authored by: Anonymous on Wednesday, June 27 2012 @ 12:23 PM EDT
Microsoft Loses Its EU Appeal ~pj
Microsoft lost its appeal with me a long time ago

[ Reply to This | # ]

Carlo Piana lost for words?
Authored by: Anonymous on Wednesday, June 27 2012 @ 09:28 PM EDT
Since PJ had linked it, I went to read Mr Piana's take on this story before
trying to digest the EU Court's verdict. Right there near the top of his
post Mr Piana blockquotes Para.152 from the ruling. As I went down that
paragraph it got thicker and darker, and at the end I said "Huh?"
I note with some pride that I am in the company of the esteemed
Mr Piana, as he also said "Huh?" in somewhat more delicate words.

If we two cannot understand this I am sure MS cannot either.
Looks like some grounds for appeal to higher authority. One
more court in EU to go, how many years? Then what?

[ Reply to This | # ]

Cost of Doing Business
Authored by: sproggit on Thursday, June 28 2012 @ 01:45 AM EDT
Other regulars have already posted comments on this development that offer the
view that Microsoft will try and pay the fine by donating product (i.e. Windows
software) of the relevant market value.

Given the cost of a CD [a few cents] against what they charge for the software
[hundreds of Euros], this would be an easy out for Microsoft.

Believe it or not, the truth may be even more wild than that...

First, Microsoft was put on notice in 2008 - four years ago - that a fine would
be levied for their illegal actions. This has given the company 4 years to make
accounting provisions for this deduction. So already that 860 Million Euros
drops to 215 million per year for the 4 years that have elapsed.

Second, assuming Microsoft rolls over and pays, they will not do so without
negotiating some drawn out payment plan, citing the state of the economy and
threatening to close Eu-based Microsoft offices if their request is refused. The
Eu will look the other way and will grant MS at least another 4 years to pay. So
that's 8 years in total, or roughly 108 Million Euros per year when the fine is
averaged out.

Third, over the period that we're talking about, inflation has been quite
variable. Think of the price of gasoline in 2008 compared to today, for example.
This has the effect of reducing the actual harm. 860 Million Euros in 2008 was a
big number for Microsoft. That amount in 2012 is still a large fine, but in real
terms it has diminished considerably. Note that the fine wasn't index-linked
[inflation-protected] by the Commission.

Fourth, fines are treated as legitimate business expenses for tax calculation
purposes. Microsoft can legally and legitimately offset the cost of these fines
against tax, not only in the US if they choose, but in Europe as well. In other
words, the cost of the fines are deducted from their gross profits before they
are required to calculate their Corporation Tax liabilities. The law allows
Microsoft to adjust back-taxes for a certain number of years. I don't know the
limit for Corporation Taxes in the EU, but it will be something in the range of
4-7 years.

Fifth, Microsoft will factor in the harm to their business and it's profits if
they had not committed the act of which they were found guilty. What would have
happened to the proliferation of GNU/Linux and free alternatives to expensive
Microsoft products had they not held back these protocols and related data? The
answer is that Microsoft would have suffered lost sales and thus lost profits.
Would that amount to anything close to Eu 100 Million a year? I honestly don't
know, but I doubt it.



However, when you take all of these factors into account, I can assure you that
Microsoft's Senior Management are laughing their socks off at this ruling. On
balance, this hasn't hurt them. There has been a financial impact, for sure, but
for a company that makes multi-billion profits every year, this fine is a drop
in the ocean. A drop that can be largely evaporated through careful management
and negotiation with the EU Commission.

There is a lesson to be learned from this story. The lesson is that breaking the
law is just the cost of doing business. The lesson is that when you are a big
enough company, breaking the law pays.

It's just that the people of Europe are paying the price, in reduced choice and
more expensive technology.

Thanks, European Commission, for nothing.

[ Reply to This | # ]

Are most Microsoft patents invalid?
Authored by: maroberts on Thursday, June 28 2012 @ 04:53 AM EDT
As I understand it, there is an obligation to disclose on a patent the
"Best Practice" of that particular invention. Since presumably
Microsoft implemented best practice in its CIFS/SMB protocols and did not openly
disclose them until forced to, and certainly did not do so to the Patent Office,
are the patents relating to such protocols invalid?

[ Reply to This | # ]

The most important result - Microsoft was GUILTY and abused its dominant position
Authored by: TiddlyPom on Thursday, June 28 2012 @ 07:13 AM EDT
The fine will hurt Microsoft a bit but not significantly. What is MUCH more
important is that this process has proven that Microsoft (yet again) abused
their dominant position to try and hurt competition - in the full glare of the
public eye. This bad publicity will hurt Microsoft far more than any fine.

The most galling thing about all this is that Microsoft Windows is STILL
pre-loaded onto almost all (non-Apple) PCs. Certainly this applies to most major
places that the general public can buy PCs - thus continuously forcing people to
purchase copies of Windows whether or not they actually want them - as though
there were no alternatives to Windows.

---
Support Software Freedom - use GPL licenced software like Linux and LibreOffice
instead of proprietary software like Microsoft Windows/Office or Apple OS/X

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )