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Microsoft concerns over possible unfair competition

 
 
Bruce Sinclair
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      09-10-2003
In article <bjm2fk$kcl32$(E-Mail Removed)-berlin.de>, "T.N.O." <(E-Mail Removed)> wrote:
>"steve" wrote
>> They also required the PC OEM vendor to pay them a windows license fee for
>> each system shipped whether it had Windows loaded or not.
>> If they didn't agree to sign such contracts, they effectively had to pay
>> retail price for their Windows....and that made them uncompetitive for
>> total price.


>So they had a choice... I have to drive the speed limit, or get ticketed for
>speeding, it is a choice that I have, as it happens, I do a little of both.


Well , technically I suppose yes ... but wouldn't a fairer analogy be
something like ...
Buy a car from me for all your customers ... even tho some of them may not
want one ?

ie the price "consequence" is not related to the choice

Bruce

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The Competition
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      09-10-2003
"Peter" <(E-Mail Removed)> wrote in message
news:(E-Mail Removed)...
> this quote is from The Competition of Wed, 10 Sep 2003 00:43:
> > The New Zealand Herald reports on Microsoft's concerns over possible
> > unfair competition, as a result of plans to develop a competing

operating
> > system.
> >
> > Intending to offer an inexpensive and trustworthy alternative based on
> > Linux, it would have the potential to restrict Microsoft's domination

and
> > monetary extraction techniques in a number of large Asian markets.
> >
> > More at http://www.nzherald.co.nz/storydispl...toryID=3522451

>
> It's just Microsoft showing their true colours.
> Microsoft wants to deny consumers choice. They hate the idea that users
> might be able to make their own choice of software, even if that software
> is more secure and more reliable, and offers better performance and more
> freedom in its use.
>
> Surely, Microsoft can't be against government intervention. Elsewhere,

they
> have instigated this themselves, even getting the US government to heavy

on
> foreign countries in favour of Microsoft.
>
> Or, you're not accusing Microsoft of being hypocritical, are you?


Assessment of background circumstances
------------------------------------------

# Microsoft's has monopoly power in the PC operating system (OS) market:
* Microsoft's 90-95% share of the OS market has remained stable for many
years
* Extreme barriers to entry exist in OS software, due to the "network
effects" that prevent new OS products (such as IBM's OS/2) from being
successful
* Microsoft has increased Windows prices while all other software and
hardware prices fell

# Microsoft used its monopoly power over Windows to dictate terms to
Original Equipment Manufacturers (OEMs) and Internet Service Providers
(ISPs) that protected its monopoly and effectively ended the "browser war"
with Netscape:
* Compaq, Gateway and others have "no alternative" to Windows
* OEMs were forced to use IE in lieu of Netscape's browser and feared
retaliation from Microsoft if they sided with Netscape
* ISPs were paid to use IE exclusively, taking away Netscape's outlet
for retail distribution

# Microsoft tried to "integrate" IE into Windows 98 to end the threat of a
new browser-based "platform" that could replace Windows:
* Microsoft's claim that IE is essential to Windows 98 is false; IE is a
stand-alone product
* Microsoft deliberately chose to bundle IE with Windows 98 in order to
"crush" Netscape
* Internet companies, such as AOL and Intuit, were forced to use the IE
browser exclusively due to Microsoft's power over the bundled
Windows/browser "desktop"

# Microsoft engaged in other anticompetitive practices designed to maintain
its Windows OS monopoly, including: Polluting Sun's Java cross-platform
technology, thereby turning an open standard that threatened Windows into a
proprietary product that reinforced its monopoly.
* Weakening IBM's OS/2 operating system by denying licenses for
Windows-compatibility and making application programs for its newest version
of Windows incompatible with this competition
* Forcing Intel to back off producing software that could compete with
Microsoft

# Microsoft's practices have harmed consumers:
* Consumers have been hurt by rising prices for Windows at a time when
prices for all other software has declined
* By eliminating competition, Microsoft has deprived consumers of OS
choice
* The likely demise of alternative platforms stifles innovations that
would give consumers new and improved technologies
* Microsoft's attempt to "kill" Internet and network-based open
standards threatens to undermine the most technologically fervent,
consumer-friendly "space" in the computer Industry
* Microsoft's extension of its Windows monopoly into Internet content
would limit choice and innovation in electronic commerce and Internet-based
information

www.ccianet.org/papers/ms/trial_exec.php3

"As a condition to licensing the Windows operating system, Microsoft forced
computer makers like Gateway to agree to use the Microsoft screen as the one
that opens automatically when consumers turn on their computers."

"Compaq, the world's largest computer maker, also wanted to configure its
own screen display, in this case by deleting an icon for Microsoft's browser
and replacing it with an icon for a competing browser. Microsoft informed
Compaq in writing that it would terminate its license to the Windows
operating system unless it shipped the Microsoft screen, complete with
whatever icons (including icons for third parties, as Micron discovered)
Microsoft dictates."

"The contract disclosed at the Senate hearings showed that Earthlink was
required to agree that it would "not advertise or otherwise promote any
non-MS web browser." It also had to agree that "at the time of ISP Service
request from an ISP Subscriber, [Earthlink] shall not express or imply that
an alternate browser is available."

http://www.procompetition.org/resear...ds/cheese.html

"This is not an industry problem but rather bullying by a monopolist. With
more than 90% of personal computers carrying the Windows operating system,
Microsoft had influence over other companies and has used it to head off
competition from potential rivals--most notably browser pioneer Netscape
Communications Corp. (NSCP). Microsoft, Justice claims, was even able to
push around giants such as Apple Computer (AAPL), Compaq (CPQ), and Intel
(INTC)."

www.businessweek.com/1998/44/b3602072.htm

Microsoft response
--------------------

"We'd like to see the market decide who the winners are in the software
industry,"

http://www.nzherald.co.nz/storydispl...toryID=3522451

You decide
------------

According to Webster's;

Hypocritical - Of or pertaining to a hypocrite, or to hypocrisy.

Hypocrite - One who plays a part; especially, one who, for the purpose of
winning approbation of favor, puts on a fair outside seeming; one who feigns
to be other and better than he is; a false pretender to virtue or piety; one
who simulates virtue or piety.


 
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T.N.O.
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      09-10-2003
"The Competition" wrote
> Assessment of background circumstances
> ------------------------------------------
>
> # Microsoft's has monopoly power in the PC operating system (OS) market:
> * Microsoft's 90-95% share of the OS market has remained stable for

many
> years


That show signs of having a good product... Look at Toyota.

> * Extreme barriers to entry exist in OS software, due to the "network
> effects" that prevent new OS products (such as IBM's OS/2) from being
> successful


Barriers to entry are not MS's fault... the market decides how hard it is
for competitors to enter.

> * Microsoft has increased Windows prices while all other software and
> hardware prices fell


Errr, really, Leading edge video cards are still way too expensive, Cad
hasnt got cheaper, AV hasnt become cheaper.

> # Microsoft used its monopoly power over Windows to dictate terms to
> Original Equipment Manufacturers (OEMs) and Internet Service Providers
> (ISPs) that protected its monopoly and effectively ended the "browser war"
> with Netscape:


Do they have to sign the agreements? no... but they do, they have a choice,
they could have gone Linux, but realised that MS is what the Market wants.

> * Compaq, Gateway and others have "no alternative" to Windows


Errr, Linux?

> * OEMs were forced to use IE in lieu of Netscape's browser and feared
> retaliation from Microsoft if they sided with Netscape


That was their choice.

> * ISPs were paid to use IE exclusively, taking away Netscape's outlet
> for retail distribution


If Netscape was unable to compete, their problem, not MS

> # Microsoft tried to "integrate" IE into Windows 98 to end the threat of a
> new browser-based "platform" that could replace Windows:


I never saw the problem with this... I use Mozilla on Win2k, it is my
choice... if users are too dumb to look for alternatives, that is their
problem. Dont blam customer stupidity on MS.

> * Microsoft's claim that IE is essential to Windows 98 is false; IE is

a
> stand-alone product


Does it actually matter?

> * Microsoft deliberately chose to bundle IE with Windows 98 in order

to
> "crush" Netscape


It's called business... I got a free chocolate bar the otherday when I got a
large chocolate bar... it's a conspiracy its a conspiracy.

> * Internet companies, such as AOL and Intuit, were forced to use the

IE
> browser exclusively due to Microsoft's power over the bundled
> Windows/browser "desktop"


Their choice... they could have not signed the deal...

> # Microsoft engaged in other anticompetitive practices designed to

maintain
> its Windows OS monopoly, including: Polluting Sun's Java cross-platform
> technology, thereby turning an open standard that threatened Windows into

a
> proprietary product that reinforced its monopoly.
> * Weakening IBM's OS/2 operating system by denying licenses for
> Windows-compatibility and making application programs for its newest

version
> of Windows incompatible with this competition


Dont know enough to comment on these ones.

> * Forcing Intel to back off producing software that could compete with
> Microsoft


Did someone at Intel sign an agreement... there it goes again... it was
their choice.

> # Microsoft's practices have harmed consumers:
> * Consumers have been hurt by rising prices for Windows at a time when
> prices for all other software has declined


See above where I gave examples to the contrary.

> * By eliminating competition, Microsoft has deprived consumers of OS
> choice


Linux has been around for years, inablility on users part to look for
alternate products is not the fault of MS.

> "As a condition to licensing the Windows operating system, Microsoft

forced
> computer makers like Gateway to agree to use the Microsoft screen as the

one
> that opens automatically when consumers turn on their computers."


How did they force Gateway to "agree"<-note the word agree... meaning that
they... well, agreed to it, implying that they had a choice.

> "Compaq, the world's largest computer maker, also wanted to configure its
> own screen display, in this case by deleting an icon for Microsoft's

browser
> and replacing it with an icon for a competing browser. Microsoft informed
> Compaq in writing that it would terminate its license to the Windows
> operating system unless it shipped the Microsoft screen, complete with
> whatever icons (including icons for third parties, as Micron discovered)
> Microsoft dictates."


So it was part of the licience that Compaq agreed to... again, something
that they didn't have to agree to, but they did.

> "The contract disclosed at the Senate hearings showed that Earthlink was
> required to agree that it would "not advertise or otherwise promote any
> non-MS web browser." It also had to agree that "at the time of ISP Service
> request from an ISP Subscriber, [Earthlink] shall not express or imply

that
> an alternate browser is available."


Again note the word agree featuring in the quoted material... they could
have "declined"

> www.businessweek.com/1998/44/b3602072.htm
> "We'd like to see the market decide who the winners are in the software
> industry,"


If the market has govt intervention, then it will no longer be a "free"
market.


 
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steve
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      09-10-2003
T.N.O. allegedly said:

> "The Competition" wrote


..........

>> * Extreme barriers to entry exist in OS software, due to the "network
>> effects" that prevent new OS products (such as IBM's OS/2) from being
>> successful

>
> Barriers to entry are not MS's fault... the market decides how hard it is
> for competitors to enter.


You need to read the judgement in the US anti-trust case that saw Microsoft
convicted of 12 illegal practices.

If you had read it, you could not baldy assert that barriers to entry are
not Microsoft's fault.

In secret agreements, Microsoft required OEM PC vendors to NOT preload any
alternative operating systems.

This is why, from the time that Win95 came out, you never saw a system for
sale from any major vendor that had two operating systems preloaded.

They also required the PC OEM vendor to pay them a windows license fee for
each system shipped whether it had Windows loaded or not.

If they didn't agree to sign such contracts, they effectively had to pay
retail price for their Windows....and that made them uncompetitive for
total price.

................

> If the market has govt intervention, then it will no longer be a "free"
> market.


If the market has ceased to function due to illegal maintenance of a
monopoly, then government intervention is the only way out.

This is why anti-trust laws exist. It is recognised that markets fail,
whether through natural processes (like a game of monopoly....) or through
the unchecked illegal activities of one of the vendors.

John Rockafeller (sp?) who founded Standard Oil had his own private army to
enforce the writ of his company. A true robber baron....or in Afghan
parlance...a warlord.

His abuse of his monopoly and wealth for political influence caused the US
to put anti-trust laws in place to start with.



 
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T.N.O.
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      09-10-2003
"steve" wrote
> > Barriers to entry are not MS's fault... the market decides how hard it

is
> > for competitors to enter.

>
> You need to read the judgement in the US anti-trust case that saw

Microsoft
> convicted of 12 illegal practices.
> If you had read it, you could not baldy assert that barriers to entry are
> not Microsoft's fault.
>
> In secret agreements, Microsoft required OEM PC vendors to NOT preload any
> alternative operating systems.


But who agreed to that, the companies involved didn't have to sign the
agreements...

> They also required the PC OEM vendor to pay them a windows license fee for
> each system shipped whether it had Windows loaded or not.
> If they didn't agree to sign such contracts, they effectively had to pay
> retail price for their Windows....and that made them uncompetitive for
> total price.


So they had a choice... I have to drive the speed limit, or get ticketed for
speeding, it is a choice that I have, as it happens, I do a little of both.

> > If the market has govt intervention, then it will no longer be a "free"
> > market.

>
> If the market has ceased to function due to illegal maintenance of a
> monopoly, then government intervention is the only way out.


If there is competition then it is not a monopoly... MS may behave like a
monopoly, but there is competition, and it is getting better each and every
revision.

> This is why anti-trust laws exist. It is recognised that markets fail,
> whether through natural processes (like a game of monopoly....) or through
> the unchecked illegal activities of one of the vendors.


Incidentally, I love the game monopoly, and I have never lost, even from
playing in my younger days against my sisters... I never made any friends
doing it though, but it is business... not pleasure.


 
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Bruce Sinclair
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      09-10-2003
In article <bjm4f5$kdi8e$(E-Mail Removed)-berlin.de>, "T.N.O." <(E-Mail Removed)> wrote:
>"Bruce Sinclair" wrote
>> ie the price "consequence" is not related to the choice

>
>Actually I'd imagine that the price consequence would have been one of the
>only things that they were looking at... I'd imagine that on the scale that
>they buy MS OEM liciences, that it was remarkably cheaper to buy a licience
>for each machine whether or not they were going to use them or not, than
>buying individual non OEM liciences for each machine that requires it.


Agreed. But the choice (a basic freedom of expression if you like ) did not
have "even" consequences ... or even "fair" consequences I would say. Sounds
like your basic blackmail to me. YMMV.

>I know of a few companies that bought 10 packs of liciences even though they
>only intended on using 8, simply because it was cheaper, for essencially the
>same deal.


and at that level that's a reasonable choice. When, however, those same
companies have little choice (yes, some I admit, but not much) when faced with
buying licences and the agreement says "you can't even use anyhting else" then
I say that's not a "choice" but again, basic restriction of trade - blackmail
if you like.Again, YMMV.
Try it with anything except software and see where you end up

Bruce





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T.N.O.
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      09-10-2003
"Bruce Sinclair" wrote
> ie the price "consequence" is not related to the choice


Actually I'd imagine that the price consequence would have been one of the
only things that they were looking at... I'd imagine that on the scale that
they buy MS OEM liciences, that it was remarkably cheaper to buy a licience
for each machine whether or not they were going to use them or not, than
buying individual non OEM liciences for each machine that requires it.

I know of a few companies that bought 10 packs of liciences even though they
only intended on using 8, simply because it was cheaper, for essencially the
same deal.


 
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Chris Wilkinson
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      09-10-2003
Hi there,

Patrick FitzGerald wrote:
> Micro$oft is hyocritical to complain about unfauir competition.
>
> They have an evil plan to control what you can run on your computer
> called Palladium.
>
> Let us ensure they never suceed in that very nasty plan


Agreed! It doesn't matter how bloody fast it goes...I'm sticking
to AMD CPU's (unless they sell out and implement similar into
next-gen CPU's too!).

If AMD sell out I'll give up on x86 PC's and get Linux on a MIPS
or PPC architecture instead...

Kind regards,

Chris Wilkinson, Christchurch.

 
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Ben Perston
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      09-10-2003
On Wed, 10 Sep 2003 13:05:50 +1200, T.N.O. wrote:

> "steve" wrote
>> Your petty infractions are hardly comparable to ripping of billions and
>> billions globally through illegal business practices.

>
> Even evil genius's have to start somewhere...


Careful not to give away too much of your ingenious plan...


 
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bt
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      09-10-2003
On Thu, 11 Sep 2003 00:23:41 +1200, "Nathan Mercer"
<nathan@4757979!!!SPAMSUCKS****mcs.co.nz> wrote:

>> If AMD sell out I'll give up on x86 PC's and get Linux on a MIPS
>> or PPC architecture instead...

>
>Of course AMD will, the market will demand it as a security feature...


Like they were 'demanding' .net ? Like they were 'demanding' 'product
activation' ? DRM ?

The only group demanding it so far are Microsoft. And they are
gauranteed to use it as part of their 'lock-in' strategy as the fear
having to compete honestly.

The concept is fundementally flawed for atleast two reasons:

1. People do not trust Microsoft - and for good reasons.

2. It reduces the usability, compatibility, and flexibility of the
computer. It also adds complexity.


Brendan (Avatar)

--
`,,`,,`,,`, ,`,

Check out my cool Water Cooling Project! http://www.computerman.orcon.net.nz/WaterCooling1.html

Email: corum.usenet@myrealbox (dot com). No Timewasters. No UCE.
My comments are IMHO, IIRC, FYI, and Copyright.
 
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