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Microsoft Fined for Price Fixing Office Suite

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

Microsoft has been slapped with a fine of approximately $11.8 million for price fixing its popular Office Home and Student 2007 suite at a recent retail promotion.

According to Bundeskartellamt, which is an independent federal authority assigned to the Federal Ministry of Economics and Technology in Germany, Microsoft fixed prices on Office at a particularly large retailer which received financial backing from Microsoft.

According to the report:

'The product in question was heavily advertised in the autumn of 2008 in stationary retail outlets. Amongst others, a nationwide active retailer advertised the product with financial support from Microsoft. Even before 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'."

Price fixing is becoming a common occurrence with large companies that are able to flex their financial muscles onto their partners and resellers. The practice has been a big problem in the memory business, where companies actually agree with their competition on prices for their products.

Almost without a fight, Microsoft has agreed to pay the fine, saying that it would review its commercial process.

"We will use this case as an opportunity to review our internal commercial processes and ensure that we are in full compliance with German law," said Microsoft spokesman Jack Evans.

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  • -2 Hide
    judeh101 , April 13, 2009 5:21 PM
    M$ deserves it!
  • 5 Hide
    eagles453809 , April 13, 2009 5:24 PM
    so...who cares. office isnt going to be sold for 20 bucks. microsoft sells it to the retail outlet. the retail outlet sells it for a little more to make a profit. just because microsoft is the big dog on the block doesnt mean they should be under such scrutiny. christ look at what companies like adobe sell their products for. why aren't they being fined for such insane prices?
  • 4 Hide
    Regected , April 13, 2009 5:25 PM
    So M$ is being fined for forcing the price LOW? Wow, that is really looking out for consumer interests. Next they will go after Open Office for being free.
  • -6 Hide
    judeh101 , April 13, 2009 5:35 PM
    I mean, come on, this isn't fair to the people that had to pay 100 bucks for office.
    paying 20 bucks is a huge rip off for the people that had to pay full price. So m$ deserves it.
  • 3 Hide
    falchard , April 13, 2009 5:44 PM
    OMGs, Microsoft sold software at an affordable price thats actually the common price of said software by its competition. That is detestable and should be fined. Microsofts product is simply too good for its competition at that price with the exception of Open Office.
  • 4 Hide
    DXRick , April 13, 2009 6:11 PM
    Can't you guys just provide links to DailyTech.com (like Anandtech does). This is last week's news.
  • -3 Hide
    formin , April 13, 2009 6:20 PM
    lol only 12M
    bill carries more money around in his wallet
  • -1 Hide
    squatchman , April 13, 2009 6:23 PM
    http://www.tomshardware.com/news/Microsoft-office-2007-price-fixing,7508.html


    Seriously... Is there any oversight at all anymore with Best of Media? Get Kevin and Marcus to write stories about this next week so you guys can round out your portfolios.
  • 2 Hide
    joex444 , April 13, 2009 6:42 PM
    Hey guys... even though this is last week's news, it seems that many commenters have little idea of WHY they were being sued. I'll admit that this particular writeup is poorly worded, and the ones last week were more insightful.

    But... MS wasn't sued for having expensive software. They were sued for telling the retailer what to sell Office for.

    In an open market, MS sells Office to the retailer. They can have an MSRP (*Suggested* retail price), from which the retailer can sell it for more or less. If they choose less, then it appears to be "On sale" which makes people think they're getting a bargain (similar to how Kohl's has a 60% off everything sale all the time).

    What MS did here is they agreed on the actual retail price. What the conversation probably went like was "Your (retailers) are going to sell this for $XXX, or else you won't sell it at all." With MS, you take it or leave it. And that's what they're in trouble for, breaking the meaning of an open market.

    Notice that when you see the same product at different stores / estores for different prices. That's an open market, you can shop around. With MS, it appears that every retailer sells it for the same price. Here we have MS's product being sold at the same price at all the stores. That's not a coincidence.
  • 1 Hide
    jsloan , April 13, 2009 6:45 PM
    what about apple, surely they fit in the price fixing category. just check out their prices form store to store, you're lucky to get $50 lower than list. Even discontinued products remain priced at list or close to list.
  • 3 Hide
    hellwig , April 13, 2009 7:01 PM
    jsloanwhat about apple, surely they fit in the price fixing category. just check out their prices form store to store, you're lucky to get $50 lower than list. Even discontinued products remain priced at list or close to list.

    I also wonder how Apple gets away with any of their business practices. Apple is guilty of everything Microsoft keeps getting punished for, but they never get in trouble for it.

    If you could only buy Apple at Apple stores or on their website, then it wouldn't matter, but the fact that Wal-Mart sells the iPhone for a whopping $2 less than AT&T tells me something is wrong. Either these companies don't make any profit for selling Apple products (in which case, why do it?), or Apple is forcing the price through agreements, which is blatant price fixing and illegal.
  • 2 Hide
    truehighroller , April 13, 2009 7:07 PM
    Hey now, I just received Office 2007 Ultimate for $59.95 from here.


    http://www.microsoft.com/student/discounts/theultimatesteal-us/default.aspx


    Now that is a steal right there!! Everything is legit to. I had no issues installing it last night on my PC. I had no issues activating or downloading it. The email went right through to my school email like it had already been white listed and everything. Based on this deal, yes they are fixing prices big time.
  • 0 Hide
    jsloan , April 13, 2009 7:19 PM
    hellwigI also wonder how Apple gets away with any of their business practices. Apple is guilty of everything Microsoft keeps getting punished for, but they never get in trouble for it.If you could only buy Apple at Apple stores or on their website, then it wouldn't matter, but the fact that Wal-Mart sells the iPhone for a whopping $2 less than AT&T tells me something is wrong. Either these companies don't make any profit for selling Apple products (in which case, why do it?), or Apple is forcing the price through agreements, which is blatant price fixing and illegal.



    i used to work in a store that used to sell apple computers and the reason the pricing is the way it is is because apple does not leave much margin for discounting and also because if you do then you will find yourself out in the cold.
  • 0 Hide
    jsloan , April 13, 2009 7:24 PM
    truehighrollerHey now, I just received Office 2007 Ultimate for $59.95 from here.http://www.microsoft.com/student/d [...] fault.aspxNow that is a steal right there!! Everything is legit to. I had no issues installing it last night on my PC. I had no issues activating or downloading it. The email went right through to my school email like it had already been white listed and everything. Based on this deal, yes they are fixing prices big time.


    microsoft also have student program where they can get developer tools, including windows server 2008, visual studio 2008 professional, sql server 2008, game studios, robot studio, and more all for free.

    here is the link:

    https://www.dreamspark.com/

    it's a microsoft site.
  • 0 Hide
    gamerk316 , April 13, 2009 8:39 PM
    Thats right jsloan, but notice they don't offer office...

    A comp-Sci student can get any M$ software for free, except Office. Its not Windows they make their $$ on, its OFFICE.
  • 0 Hide
    jsloan , April 13, 2009 11:06 PM
    hey just trying to help out, anyways i never said you get office for free, $60 is not that bad... see this posting

    truehighrollerHey now, I just received Office 2007 Ultimate for $59.95 from here.http://www.microsoft.com/student/d [...] fault.aspxNow that is a steal right there!! Everything is legit to. I had no issues installing it last night on my PC. I had no issues activating or downloading it. The email went right through to my school email like it had already been white listed and everything. Based on this deal, yes they are fixing prices big time.

  • 1 Hide
    Neog2 , April 14, 2009 4:14 AM
    Or you can just go to www.technet.com and just pay the subscription
    fee of $250 a year and you have access to pretty much everything
    Microsoft makes and private beta's as well. Oh yeah I was definitely in on the private halo 3 beta's.

    They have two tiers of subscriptions $350 for first year $250 after wards
    for just downloads.

    $599 for first year $449 after wards for downloads with dvd shipments.
  • 0 Hide
    E7130 , April 14, 2009 2:19 PM
    Wonder why Walmart doesn't get sued for telling manufacturers what they have to sell it for...
  • 0 Hide
    Anonymous , April 15, 2009 4:24 AM
    Its not illegal to sell something to make a profit. It is illegal to price fix products by way of shady dealings with resellers which Microsoft has already been in trouble for. I'm not suprised by all of the "Wah wah Apple does this and that" comments but Apple is pretty fair and follows the law in its business deals.
  • 0 Hide
    rooket , April 15, 2009 6:14 PM
    The student edition is lame, it has a useless program one note in place of outlook.