EU: Microsoft Royalties 'Prohibitively High'

By Ed Oswald | Published April 5, 2007, 1:51 PM

Microsoft could very well be barred from collecting royalties on technical information provided under a settlement with the European Commission, the Financial Times reported on Thursday.

According to a document obtained by the paper, Microsoft has been informed that it could collect either zero or one percent of sales of software based on that technical data. The Redmond company has been asking for 5.95 percent.

Last month, the European Commission charged that Microsoft was asking for too much in return for access to technical data. The document appears to be in response to that claim and is authored by Neil Barrett, who the two sides agreed upon to act as mediator.

Barrett called the rate "prohibitively high" and said that even a one percent royalty rate would be unacceptable. Thus, he suggests that the company should not be permitted to charge anything at all.

The FT lists three rivals as having reviewed Microsoft's pricing structure and agreeing with the assessment. The parties involved are believed to be IBM, Sun and Oracle.

Microsoft has been given until April 23 to respond to the charges.

Comments

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edit for post errors, lol

too high? Can't charge a royalty? Dang, MS can't get a break when it's top dog. If it's too high nobody would want to do business with the productright? So wouldn't that be good for all the anti-MS groups?

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I'll bet Microsoft would like their list of acceptable mediators back for a do over. Neil Barrett is a lot more than they expected. There are plenty of people who understand the difference between new secrets and new ideas, but on top of that Neil Barrett is honest. Microsoft never saw that coming.

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"The parties involved are believed to be IBM, Sun and Oracle."

What a surprise...

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This isn't about fairness. This is competition using law as a tactic.

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That's true, but with the monopoly MS enjoys...

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mo·nop·o·ly /m??n?p?li/ Pronunciation Key - Show Spelled Pronunciation[muh-nop-uh-lee] Pronunciation Key - Show IPA Pronunciation
–noun, plural -lies. 1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly.
2. an exclusive privilege to carry on a business, traffic, or service, granted by a government.
3. the exclusive possession or control of something.
4. something that is the subject of such control, as a commodity or service.
5. a company or group that has such control.
6. the market condition that exists when there is only one seller.
7. (initial capital letter) a board game in which a player attempts to gain a monopoly of real estate by advancing around the board and purchasing property, acquiring capital by collecting rent from other players whose pieces land on that property.

Microsoft is not a monopoly there are hundreds of choices out there, just because Microsoft became the more popular one shouldn't fault them.

Apple has made it clear their hardware will only run on their systems, so its not Microsoft's fault Apple doesn't release the OS to Dell, HP, Toshiba, Sony.

Linux has been around long before Microsoft and it couldn't do what Microsoft could back in the 95 days (deliver a easy to understand interface for joe average) Linux now has that possibility but its still far from prime time yet.

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too much logic in your comment...you know many don't like that type of thing...logic, lol

It's like some think logic is a drug...and so their slogan is, "Don't do Logic".

ahh...again, such a nicely factual and intelligent statement. :)

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Exactly. The only thing MS has a monopoly on is Windows and Office, both of which have alternatives available for sale and free.

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If the EU thinks Microsoft is so terrible, it would really be rich to see them stop selling to the EU. The EU is not providing much to the bottom line... thus why would shareholders care? If anything, the EU is holding stock prices down...

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MS software is much more expensive in the EU (732$ for Vista Ultimate in the Netherlands) as in the US and it has a pretty significant user-base here. So I don't see how EU-sales do not make a good contribution to the bottom line.

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How much does it cost to do business there? Taxes? Lawsuits? Hell, one day's EU fines is a year's Dutch profits. Where's the sense in it?

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Taxes are higher and yes, business costs are higher too, but not that much. But we don't have lawsuits like in the US, because there aren't any real economic benefits to them. In fact, all the million dollar lawsuits are joked about here, as well as all the bizarre warnings you see on US-products.

As for MS getting fined, that is their own wrongdoing and they had plenty of warnings. Furthermore, MS seems to collect the fine by increasing the prices here. That's is not how it works and for that very reason, I will never buy Vista.

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wow rtfa much?

what does anything you lampooned about have to do with the topic?

the fact remains the eu feels they shouldn't have to pay ANY royalities, citing that even 1% is too much. If they don't want to pay maybe they should move on to something else...because MS is right on this one...sorry to say...

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it's funny how EC thinks that other companies should something for nothing. That Neil Barrett and everyone else in the EC should work for free then

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Funny to know that Microsoft proposed to appoint Neil Barrett as monitoring trustee.

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It just gets better and better...at least from an entertainment perspective.

It's like they're *trying* to get Microsoft to completely pull out from the EU market. It will never happen and there are countless reasons why, but it seems as though they are doing everything they can to make MS throw their hands up in disbelief and simply walk away.

I'm curious as to what would happen should MS simply choose to completely ignore their constant whining and continue about their business as normal. I find it hard to believe that the EU would actually go so far as to *ban* Microsoft from doing business in their countries.

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I agree - I think MS should just tell them that they are immediately ceasing all operation in the EU and that all updates/upgrades/etc are now no longer available to anyone in the EU.

They have more than enough money to return all of the balances remaining on any contracts for support that are left open and they can let the EU swing in the wind.

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They could, but I do believe that the people there may actually have some sort of a brain and heart.

It's not actually like the people of the EU want all this crap that just keeps comming from the EC. It is silly.

Microsoft won't want to be in the history books for causing a revolt in Europe. Because that is exactly what would happen.

Now it's your turn. Call me over dramatic.

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Considering the the EU is Microsofts biggest market outside of the US. I don't think they will move out that quickly.
If they want to trade in the EU, they need to follow the rules of that market. Like any European company trading in the US.

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