Skip to main content

Microsoft Fined for Price Fixing Office Suite

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.

  • judeh101
    M$ deserves it!
    Reply
  • eagles453809
    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?
    Reply
  • Regected
    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.
    Reply
  • judeh101
    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.
    Reply
  • falchard
    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.
    Reply
  • DXRick
    Can't you guys just provide links to DailyTech.com (like Anandtech does). This is last week's news.
    Reply
  • formin
    lol only 12M
    bill carries more money around in his wallet
    Reply
  • squatchman
    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.
    Reply
  • joex444
    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.
    Reply
  • jsloan
    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.
    Reply