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Microsoft Fined $11.9 Million for Office Price-fixing

By - Source: Tom's Hardware US | B 20 comments

Microsoft has been dealt a second blow in the courts as a ruling from Germany sees the software giant fined nearly $12 million.

The German competition authority, the Bundeskartellamt, ruled that Microsoft had coordinated with retailers for Microsoft Office Home and Student 2007, which resulted in anti-competitive pricing. The Bundeskartellamt said that prior the launch of the advertising campaign in mid-October 2008, employees of Microsoft and the retailer in question had agreed on at least two occasions on the resale price of the software package “Office Home & Student 2007.”

"The product in question was heavily advertised in the autumn of 2008 in stationery retail outlets,” said the Bundeskartellamt in a statement. “Among others, a nationwide active retailer advertised the product with financial support from Microsoft," the statement continued.

While Microsoft has accepted the ruling and will be paying the fine in full, the competition authority assured suppliers and retailers alike that not all talks regarding resale is illegal. “However, this must not lead to a form of coordination where the supplier actively tries to coordinate the pricing activities of the retailer and thus retailer and supplier agree on future actions of the retailer. In the present case, this boundary has been crossed.”

Microsoft this week lost a patent infringement suit against Uniloc Inc. which could cost the company $388 million.

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  • 0 Hide
    maximiza , April 9, 2009 1:34 PM
    Its stupid to sue when you have open office around.
  • -1 Hide
    squatchman , April 9, 2009 2:27 PM
    yea... I'm not exactly sure why microsoft is paying this fine. Their next biggest competitor(OpenOffice) gives the product away for free. The retailers were the ones to gain with an "unfair" advantage in pricing.
  • 1 Hide
    timmorey , April 9, 2009 2:42 PM
    So basically, Microsoft offered to sell their product for a specific price, and people voluntarily chose to purchase it for that price. That is being considered criminal. At the same time, people with guns make me pay taxes to support programs that I don't care about, and that is considered virtuous. What sort of morally vacant people are coming up with these rules?
  • 4 Hide
    dark_lord69 , April 9, 2009 3:12 PM
    The people that were ripped off will never see a dime of that money.
  • -2 Hide
    Anonymous , April 9, 2009 3:17 PM
    And this comes from the high and mighty company that so self-righteously and hypocritically makes criminals out of average citizens with their dogma about moral legal obligations. Check out that they also lost another case worth even more. What a bunch of criminals. We should sue their 11 year old children hundreds of thousands of dollars for this and also their dead grandparents. I guess when you are buying the politicians off through lobbyists, you can make up the laws as you go. Fortunately, the judicial system is not a part of the legislative system.
  • -1 Hide
    hellwig , April 9, 2009 3:41 PM
    Sadly, OpenOffice is not ready for Prime-Time, mostly because everyone still uses the proprietary Office .doc format. Hopefully the move to open standards will fix the compatability issues, and OpenOffice will gain a better foothold. Nothing pisses me off more than opening a .doc in OpenOffice that doesn't render properly because someone used some feature in Office no one else even knows about.

    That said, it doesn't matter what you're selling, you can't conspire to fix the price. Microsoft could sell donuts, it wouldn't matter, they still couldn't fix the price with a retail chain. Manufacturers put MSRP values on products, but the retail outlet gets to decide how much to charge (and in theory, that price is driven by what consumers are willing to pay, in theory).
  • -1 Hide
    frozenlead , April 9, 2009 4:14 PM
    hellwigSadly, OpenOffice is not ready for Prime-Time


    Having been screwed over on presentations with people who use it, I would tend to agree. The lack of a truly standard format for documents is really a pain to deal with.
  • -1 Hide
    the_one111 , April 9, 2009 4:39 PM
    Sigh, everybody hates MS, not without good reason, but what would happen if they went bankrupt in a month...? God, I would never use a computer again, apple would probably be the head OS company....

    This is so retarded, people are getting a almost racist hate of microsoft...

    But yet... guess who made half the programs you run...

    [/rant]

    (Oh and I don't LIKE microsoft, but they are a hell of a lot better than the alternatives..)
  • 0 Hide
    skine , April 9, 2009 4:46 PM
    hellwigSadly, OpenOffice is not ready for Prime-Time, mostly because everyone still uses the proprietary Office .doc format.


    OpenOffice supports Word 6.0, 95, 97/2000/XP and 2007 documents. Open documents can be opened in Word after installing a plugin, or they can be converted using Media-Convert.com or Zamzar.com.
  • 1 Hide
    skine , April 9, 2009 4:53 PM
    the_one111This is so retarded, people are getting a almost racist hate of microsoft...

    Hatred for Microsoft isn't because of the color of their skin, or any prejudicial notions. It's because of what they've done. To even say that we're just Microsoft haters is ridiculous following an article that shows that Microsoft was engaged in illegal practices.
  • 0 Hide
    Anonymous , April 9, 2009 7:34 PM
    It's good to see that the EU continues to generate new revenue streams in this challenging economic time. As apparently they can't tax their people anymore then they already do, going after large corporations seems to be a 'good' alternative.

    Sell something at too high a price? Price gounging/monopoly! Sell it too low? Anti-competitive! Give rebates to retailers for large volumes? How dare you screw consumers by allowing retailers to lower costs and lower prices! I think the EU gov't should just publish what they consider acceptable pricing to be, what acceptable features are, and what acceptable annual revenues should be. Let's stop this charade and just get to the central planning already!
  • 1 Hide
    oserus , April 9, 2009 8:00 PM
    Let me see if I have straight... a supplier can talk with a vendor, but they cannot discuss the price at which a vendor is going to sell it at??? Regardless of if it is MS or not that is assinine.
  • 0 Hide
    falchard , April 9, 2009 8:19 PM
    The European Union is trying really hard to replace a Microsoft Monopoly with a different unix iteration monopoly.
  • 0 Hide
    skine , April 9, 2009 8:26 PM
    Quote:
    Price fixing is an agreement between business competitors to sell the same product or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether expressed or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to price gouging.


    Microsoft didn't simply apply a set MSRP (manufacturer suggested retail price), but they told the retail outlets to sell office at a given price.
  • 0 Hide
    anamaniac , April 9, 2009 11:18 PM
    What price competition? Microsoft's only real competition to Microsoft Office is free, ha.
  • 0 Hide
    kenjiuchimura , April 10, 2009 5:38 AM
    dark_lord69The people that were ripped off will never see a dime of that money.


    My notion exactly. Even if they weren't being ripped off, where will the money go?
  • 0 Hide
    plbyrd , April 10, 2009 3:23 PM
    Quote:
    While Microsoft has accepted the ruling and will be paying the fine in full, the competition authority assured suppliers and retailers alike that not all talks regarding resale is illegal. “However, this must not lead to a form of coordination where the supplier actively tries to coordinate the pricing activities of the retailer and thus retailer and supplier agree on future actions of the retailer. In the present case, this boundary has been crossed.”


    Dry that one out and fertilize the lawn with it. It's blatantly obvious that every one of these European lawsuits against Microsoft is just cover to further marginalize Capitalism in European society as Capitalism is the one true path to providing individual freedoms.
  • 0 Hide
    baka-mono , April 10, 2009 5:10 PM
    so... microsoft got fined when they sell their software cheaply. they get hate mail when it gets expansive. anyone got a better suggestion?
  • 0 Hide
    plbyrd , April 11, 2009 1:52 PM
    @demonhorde665

    Want to talk expensive? IBM Rational Suite, which is a set of software for developers that is analogous to AutoCad for designers, costs over $15,000 --- per person. And that's in addition to the costs of the server software that backs the $15,000 client software.
  • 0 Hide
    plbyrd , April 11, 2009 1:53 PM
    dark_lord69The people that were ripped off will never see a dime of that money.


    Of course not, nobody got ripped off. This EU will just use this money to further marginalize Capitalism.