Wednesday, February 27, 2008

EU Fines Microsoft $1.3 Billion for "Unreasonable Prices"

In a sickening case of socialist authoritarian market intervention, the European Union fined Microsoft $1.3 billion dollars for charging "unreasonable prices" to competitors looking for software information:

BRUSSELS, Belgium (AP) -- The European Union fined Microsoft Corp. a record $1.3 billion Wednesday for the amount it charges rivals for software information.

EU regulators said the company charged "unreasonable prices" until last October to software developers who wanted to make products compatible with the Windows desktop operating system.


The fine comes less that a week after Microsoft said it would share more information about its products and technology in an effort to make it work better with rivals' software and meet the demands of antitrust regulators in Europe.

But that's not good enough for the EU Competition Commissioner, who was far too eager to make a stand against the software powerhouse:
"Talk is cheap," Kroes said. "Flouting the rules is expensive."


"We could have gone as high as 1.5 billion euros ($2.23 billion)," she said. "The maximum amount is higher than what we did at the end of the day.
Oh, well thank you Almighty European Union for saving Microsoft from having to pay $2.23 billion.
Microsoft had initially set a royalty rate of 3.87 percent of a licensee's product revenues for patents and demanded that companies looking for communication information - which it said was highly secret - pay 2.98 percent of their products' revenues.

The EU complained last March that the rates were unfair. Under threat of fines, Microsoft two months later reduced the patent rate to 0.7 percent and the information license to 0.5 percent - but only in Europe, leaving the worldwide rates unchanged.

Apparently the EU has jurisdiction outside of Europe? Is a rate drop of almost 550% for patents, and almost 600% for information licenses not good enough? And most importantly, why does the EU get to decide what prices Microsoft should charge?

Why not just nationalize them? Is it not Microsoft's right to determine when and if to share their information, and how much they will charge? Is it not THEIR information, implying ownership? Also, to say that their prices are too high and that they must be lowered, one implies that in some way, others have a claim to Microsoft's property. But in that case, it's not property is it?

Should I ask you to sell me a car, and you ask price X. Would it be ethical for a third party to force you down to price .5X because they think your prices are too high? You would be outraged. If I was willing to pay the price in the first place, I obviously made an economic choice where I believed that the car was worth more to me than the sum of price X. What is wrong with that?

1 comment:

The Liberative said...

Interesting: Microsoft is fined for charging too much -- who is to deem what is "too much?" What if the penalty is "too much?" Who's gonna rule on that?

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