Microsoft: Too Big for the Law?

 
 
By Steven Vaughan-Nichols  |  Posted 2006-07-12
 
 
 
So, the EU finally let Microsoft have it. European Union regulators fined the boys from Redmond 280.5 million euros—thats 357.3 million American dollars—for defying a 2004 antitrust ruling and warned the company that bigger fines were to come.

How big? It could go up to 3 million euros a day after July 31 if Microsoft doesnt toe the line and finally give up proprietary information on how its software works. And I think we can say its a safe bet that Microsoft is not going to cooperate.

To which, I say, "So what?"

In Microsofts last reported quarter, the companys net income was $2.98 billion. Thats what? About $33 million a day of profit—not revenue—profit? So, to Microsoft, paying off the Europeans every day would be about what most of us pay for our morning café latte vente and a cookie at Starbucks.

In case you havent noticed, Microsoft has gotten into the habit of losing lawsuits to governments, its on-again/off-again partners and enemies, and the net result to Microsofts bottom line has been ... oh, I dont know ... maybe about the same as your monthly electrical bill is to yours.

Specifically, in this last quarter, Microsofts stockholders saw a 29-cent-per-share dividend, after 3 cents worth of legal charges. Thats getting better. For the same quarter of the previous year, it was a 23-cent dividend after a nickels worth of legal charges.

Add it up yourself. Microsoft finally put up the white flag in December in its battle with Eolas Technologies over how Internet Explorer handled embedded Web content. That was a $521 million patent infringement ruling. The final results arent in yet, but Id be surprised if Microsoft doesnt pay off and walk away from this technology.

Microsoft lays off 214 in U.S. sales. Click here to read more.

In November, Microsoft gave up fighting with Novell over an antitrust suit concerning how Microsoft had run over NetWare. In addition, Microsoft finally stopped fussing with the CCIA (Computer & Communications Industry) Association trade group. To make these go away, Microsoft paid $536 million.

At least Microsoft got Novell and the CCIA to pull out of the legal case against Microsoft in the European Union. Of course, it didnt end up doing Microsoft a lick of good, but the company didnt know that at the time.

And, then, there are the new lawsuits. Weve got the California WGA (Windows Genuine Advantage) class-action suit and the Washington state WGA class-action suit. Microsoft insists that the plaintiffs dont have a leg to stand on in these suits.

Ah, yeah, right.

On top of all that, Microsoft pays at least as much as all those fines on its legal expenses. Top-flight lawyers arent cheap.

But, you know, what? None of these fines and payments matters. Microsoft can afford them.

From the victory that turned into a flop—the Microsoft antitrust suit of the late 90s and early 00s—Microsoft has kept losing in the courts, but at the end of the day it still ends up winning.

Microsoft is not only a de facto monopoly, it is too big to be even bothered by ordinary government legal intervention or private lawsuit.

For Microsoft, breaking business laws and eventually paying the price for doing so is just another part of doing business.

When asked during a media and analyst call on April 27 if Microsoft has added anything to its legal expense fund to deal with the EU fine, Chris Liddell, Microsofts CFO, replied that while Microsoft does not specifically comment on individual items, "if I can put it this way, it is no change from our present position and nothing inside the legal reserve has changed."

There you go, folks. Good luck to all of you who expect legal action to change how Microsoft does business. Its just not going to happen.

eWEEK.com Senior Editor Steven J. Vaughan-Nichols has been using and writing about operating systems since the late 80s and thinks he may just have learned something about them along the way. He can be reached at sjvn@ziffdavis.com.

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