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back to article Expert: EU Microsoft competition fine could reach $7bn

Microsoft could face a fine of up to $7bn (£4.49bn) if EU competition regulators find that the company failed to comply with a "critical remedy" it agreed to implement in 2009 to alleviate concerns that it was acting anti-competitively, an expert has said. The European Commission has opened an investigation into whether …

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WTF?

What a ridiculous situation

This whole issue annoys me. While Microsoft may have been engaged in some less than legitimate behaviour in the past, forcing them to promote other vendors browsers seems like a punitive measure based more on revenge than protecting the consumer from any threat, either real or perceived.

Imagine if you will you walk into a Ford dealership and you say to the salesman, yes I like the Focus very much, but is there any chance you could put in the engine from a Vauxhall Astra? Once the salesman had finished laughing his arse off, he'd kick you out. That doesn't mean you couldn't go and do it yourself, but you wouldn't expect to buy it in that situation.

What I don't get is why it should be any different in software. If you buy Windows, you get IE. If you like IE then you can stick with it. If you don't, you can go and download and install the browser of choice. If you don't know what you're doing with computers then you shouldn't be worrying about alternative browsers.

It annoys me that the EU seems to associate success with anti-competitive behaviour, just look at how they seem to be out to get Google (Why the hell should Google have to promote their competitors?) Yet at the same time seem to ignore Apple who seem equally happy to force you into using certain software (sometimes) without choice.

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Anonymous Coward

Re: What a ridiculous situation

> If you don't know what you're doing with computers then you shouldn't be worrying about alternative browsers.

Now that would make the world a different place. Just imagine if it applied to forums too!

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Re: What a ridiculous situation

Are you trolling?

MS have/had an OS monopoly that they unfairly abused to gain a browser monopoly. The EU fined them because they refused to do anything about it, the fine gets ratcheted every time they "accidentally" stop obeying the ruling.

Google have a monopoly on search, which they use to promote their own services above others and subsidize other, non profitable services so that they under cut similar services provided by other companies. Once they have achieved a dominant market position, they ramp up prices. The EU are considering whether this is anti-competitive.

Apple, as many gleefully tell us, have neither a monopoly on phones, nor on their OS, app store or music store, so what they force/require their users to do is irrelevant; they can simply use a different phone.

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Re: What a ridiculous situation

I think you missed the Troll icon.

Can't you understand what the implications of monopoly / oligopoly status means? If Ford had 99% of all garages in their pocket, you don't think they would get such treatment as well?

As for the success of companies, you also seem too dim to realise that often that comes from misusing their position to crush opposition and/or disadvantage competitors. I have no problem with Google being the biggest search engine if it is due to them having the best algorithm, but it is an issue when they start promoting their own brands ABOVE competitors because of ownership, not relevance.

Geed, you break the rules then expect to get punished! Oh unless you are a US company in the USA where the DOJ drops things that might harm your profits.

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Re: What a ridiculous situation

I'm not trolling at all, I honestly believe in what I say.

Microsoft don't have a Monopoly, and it gets on my tits when people say otherwise. There is no law saying you MUST buy Microsoft unlike say with UK water companies where you don't get any choice who supplies you. Microsoft obtained this position by being easier to use than Linux and by operating a better business model than Apple. Bundling their software in with Windows isn't unfairly abusing that position. Plus, I cannot see how this harms the consumer? Yes IE9 might not be as good as Chrome, and Yes, VLC is arguably a more flexible video player than Windows Media Player, and there is nothing stopping a user that is even half knowledgable from changing over. To force Microsoft to have to advertise the wares of other vendors however seems to be a punitive move which fails to address any real issue.

Again, in what way do Google have a monopoly on search? When I have to search I go to the address bar, and I can type google.co.uk, bing.co.uk or yahoo.co.uk as well as many others. I choose Google because I like it, but nobody forces me too. In fact, going back to Microsoft, out of the box they take me to their Bing search. As for how they conduct their business, I don't see a problem, since we get great products for free. This doesn't preclude other companies from coming up with paid for solutions but they can't do so off the back of lazy design and half-arsed feature sets. They have to offer something exceptional and this is why they're complaining. In the end the market will decide who is offering the best products.

If apple have no monopoly then neither do Microsoft or Google. So there should be either a rule for all or no rule at all.

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WTF?

@Tom 38

Hang on… Apple does not have a monopoly on phones, because users can simply use a different phone. Ok.

Yet, Google has a monopoly on search, because…? Users cannot use Bing, Baidu or DuckDuckGo?

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Re: What a ridiculous situation

MS and Google don't have monopolies? Sorry, do you even understand what "monopoly" means? Do you think it's some kind of state-backed status?

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Re: What a ridiculous situation

You really don't get it do you?

"There is no law saying you MUST buy Microsoft" - go to any of the major vendors (HP, Dell, Toshiba, Leveno, etc) and see what proportion of consumer machines & laptops you can buy world-wide without Windows, then report back here.

Damn, I fed a troll again!

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Re: What a ridiculous situation

Callam McMillan

"What a ridiculous situation

Yet at the same time seem to ignore Apple who seem equally happy to force you into using certain software (sometimes) without choice."

So that judge who told Apple to put an apology to Samsung on its webpage for 6 months was a figment of our imagination.

Apple have never forced me to buy anything, I buy/own their products because I choose to. And to date am very happy with most of them. I don't like the build quality of some of the cables.

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Stop

Re: What a ridiculous situation

You don't seem to understand what a monopoly is. A company doesn't need to own ALL of a market to hold a monopoly position. It needs only to hold enough share to be able to unfairly influence competition.

In Microsoft's case there are alternative operating systems, but people buy software not operating systems. If the software they want is only available on Windows they buy Windows. Because most users have Windows developers write their apps for that. The result is a self-reinforcing loop.

Add to that Microsoft have terms to OEM manufacturers that make it a disadvantage for them to sell a PC without Windows and you end up with the current situation where Microsoft owns 95% of the market.

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What a ridiculous comment

"Imagine if you will you walk into a Ford dealership and you say to the salesman, yes I like the Focus very much, but is there any chance you could put in the engine from a Vauxhall Astra?"

Let's fix this analogy: Let's assume Ford has a monopoly on cars and decided to take over the market for tires. You want to choose your own brand of winter tires? What a pity, we just changed the specifications so third party products won't work work properly, so you better stick with our product. If you don't like it, you can always go buy a bus or a motorcycle instead.

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Re: What a ridiculous situation

Have you considered that the reason most consumer manufacturers don't offer the option is that there is no demand?

Think about it, for every 1000 people that buy a consumer device, perhaps 2 or 3 will ever change the operating system. Couple this with the fact that if you offer a choice of operating systems, then you have to support them, and I can't imagine trying to talk some little old lady through the vagaries of the Linux command line.

As an anecdote. A while back, my dad missed one of those annoying checkboxes on an installer and as a result got a copy of Chrome installed on his machine. He asked me "So why would I want to use Chrome instead" and I honestly couldn't come up with any valid answer given what he uses his computer and the internet for.

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Re: What a ridiculous situation

Callam, mate, at this point you should probably go and read up on what a monopoly is rather than continue posting your opinions. We will be glad to debate the issue with you once we think you understand that fundamental point.

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Re: What a ridiculous situation

mo·nop·o·ly/məˈnäpəlē/

Noun:

1.The exclusive possession or control of the supply or trade in a commodity or service.

2.The exclusive possession, control, or exercise of something: "men don't have a monopoly on unrequited love".

I'm noticing the word Exclusive being used quite a lot which suggests to me that my previous point about MS not having a monopoly is actually correct.

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Re: What a ridiculous situation

Callum,

A monopoly is defined legally, and MS has been deemed by the courts (the arbiters of such things) to be a monopoly, and to have abused the monopoly power it possess in contravention of the laws regulating monopolies, and to the detriment of competitors and consumers.

This is a legal FACT. Please educate yourself, or STFU.

philip

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Re: What a ridiculous situation

The situation you are describing has come about because Microsoft have abused their position for so long that a majority of computer buyers are no longer aware of any alternatives. It is effect, not cause.

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Re: What a ridiculous situation

Couple of points of order before I respond to the subject. If you're going to address me by name, at least spell it correctly. Secondly, while you may disagree with me, I have kept the tone polite and on topic. I would prefer if you did the same rather than resorting to STFU...

Yes, a monopoly is defined legally, and the courts have never practiced bad law for other interests (Megaupload anyone?) Are Microsoft whiter than white? Of course not, and I wouldn't even try arguing that. That said, I thoroughly dispute that they harm consumers through their actions, I cannot think how I have been disadvantaged through Microsofts position?

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Re: What a ridiculous situation

"I cannot think how I have been disadvantaged through Microsofts position?"

That's kind of the point. In the absence of competition, things stagnate. Had there been real competition in the Personal Computer Operating Systems arena, there would have been genuine innovations spurred on by precisely that competition as each supplier sought to differentiate themselves from their rivals. Since these did not happen, we will never know what they might have been like.

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Re: What a ridiculous situation

oligopoly

noun

the market condition that exists when there are few sellers, as a result of which they can greatly influence price and other market factors. Compare duopoly, monopoly

The point you are missing is this is not about corporate users for whom a sysadmin sets up the approves configuration, nor for readers of El Reg who fully understand how to install other browsers and/or configure search engine choices.

This is about Joe Public who can't tell the difference between an address bar and a search engine, and for whom the blue 'e' was "The Internet". Once most of them are using an OS-specific browser you get the stupidity and lock-in seen, for example, in a lot of South Korean banks where you need an ActiveX plug-in for on-line banking.

And so you can keep your hands tightly around consumers genitals and squeeze them for all the money you can with little chance of them moving way from your cash-cow.

That is what the EU has acted for, and given the size of MS and their inability to keep a promise, I don't think 10% fine is out of the question. Please educate yourself on the whole anti-trust proceedings that started with MS moving against Netscape before arguing about it.

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Re: What a ridiculous situation

Callam,

1) you said you didn't think MS was a monopoly

2) others said you didn't understand what constituted a monopoly

3) you replied with some dictionary definitions of monopoly containing the word 'exclusive'

4) such definitions are not equivalent to the legal definitions, so they are not relevant

5) I'm still not sure you understand what a monopoly is in terms of free markets and the laws which apply

6) Megaupload is not relevant to this case, unless you simply want to say that laws have been abused or misapplied in the past. I don't think anyone would argue that point, but I certainly would argue its relevance.

7) The fact you dispute that MS has harmed consumers is

a) based on your own personal opinion which may not adequately describe the entire situation

b) again, not really relevant.

I think what you are trying to say is that MS should never have been found to have been abusing a monopoly position, because either (a) they aren't a monopoly and/or (b) they didn't abuse being one. It's a bit like saying you disagree with a sentence that someone has been given, because it is too harsh, and when you are challenged on that, saying you didn't really think they were guilty in the first place.

As you can imagine, such a form of argument is rather frustrating, which is why, I believe, you have had some short-tempered responses.

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Boffin

Please understand what it means to be a monopoly..

This may confuse some of the commentards...

Its possible to have a monopoly, yet not be a monopoly. Confused? You're not alone.

Google has a monopoly on search, and also internet ads. Yet they are not a monopoly because the courts haven't found them to be a monopoly.

Microsoft was found by the courts to be a monopoly, therefore they *are* a monopoly. Under the laws, as a monopoly, they have certain restrictions applied to them and even if their products are no longer dominant in the sector, they are still considered a monopoly.

Microsoft entered in to an agreement which ended a lawsuit brought against them for showing anti-competitive behavior. Its this violation of the agreement that yields the stiff penalties.

With respect to the amount, I seriously doubt that they will be fined that much. For the maximum penalty to be applied, it would have to be shown that they willfully acted in the removal of the browser selection page.

A more likely scenario is that someone screwed up the code. Occam's Razor applies.

The point is that until the courts determine that Apple, Google, or whomever has a dominance in a market, acts in a monopolistic manner, they are not monopolies.

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WTF?

Re: What a ridiculous comment

Your analogy doesn't work - Microsoft haven't done anything to make other browsers (tyres) incompatible, they are just equipping their products with their own browser (tyre) as standard, seems fairly normal to me.

Are you trying to claim that I should be able to rock up to a Ford dealership with my own set of tyres and tell them "I'd like one of your cars, but I want you to put these tyres on it instead.", and that they would be leagally required to comply with my request?

No other provider of operating systems is required to promote their competitors products in this way (iOS doesn't even allow other browsers) I also have no idea where these claims of "Market dominance" are coming from as IE usage statistics have been consistently declining for the past 5 years, with precious little evidence that Microsofts browser choice feature has had any impact on this.

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@Another Justin

Indeed, if Ford had a monopoly and abused their market position to destroy competition in the tire market, the courts could force them to offer competitors' tires. Being good at making/selling cars (I am speaking hypothetically here), does not give them a right to destroy related industries. The trick, of course, is to be sneaky about it and to accidentally destroy the competition. MS showed great skill in this respect.

To accidentally forget offering the mandated browser choice -- not so sneaky.

Our style of capitalism is based on competition and there are legal safeguards to ensure competition. It makes a lot of sense, else the most successful business strategy would be to corner the market. And that would be very expensive for everybody except the monopolist.

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Anonymous Coward

Microsoft don't have a Monopoly?

> Microsoft don't have a Monopoly, and it gets on my tits when people say otherwise ..

It's patently obvious and been well documented the strangle-hold Microsoft has on the OEMS in desktop space. Which explains why they've been able to leverage their own browser on the desktop, which leverages their own web server on the desktop, which leverages their own online document sharing system, which leverages Microsoft Office.

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@Callam

How about an accurate analogy?

Let's say you were accused of nicking my car.

You make a bargain with the court where you agreed to pay my taxi fares for a few weeks, as it was pretty clear to your lawyers that you were going to lose the case and go to prison.

Then you don't pay up.

What happens next is you are in the dock for contempt of court, which carries a much bigger sentence than the original accusation.

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And again...

when are Apple going to be forced to comply with a similar measure for OSX?

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Re: And again...

"when are Apple going to be forced to comply with a similar measure for OSX?" I suspect around the time they have 80% - 90% market share and force you to purchase a copy of OSX with every computer, even if you run Windows ..er...Linux on the computer. Many of the things Microsoft gets in trouble for, as nasty as they are, would not be an issue if they did not have a monopoly on PC operating systems. Apple and Linux have eroded that a little in recent years, but Windows is still the dominant OS. Apple does some pretty nasty stuff too, but since it is a minor player they are allowed to get away with it.

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Re: And again...

When they get into a situation where they are misusing a dominant position in one arena to gain an unfair advantage in another arena.

Microsoft (possibly) forced computer manufacturers into supplying Microsoft OSes with their machines by offering discounts to manufacturers who pledged not to offer alternatives. This gave them a dominant position in Personal Computer Operating systems. Unfortunately, any evidence that might have actually proved this had already gone walkies by the time anyone thought of bringing the case to court.

Next, Microsoft bundled a (poorly-written and non-standards-compliant) web browser with their operating systems, and made it difficult for suppliers of alternative (read: superior) web browsers. They would not have been able to do this, had it not been for their existing position of dominance in another arena.

And that last sentence is what this here decision is all about. We have laws intended specifically to prevent a single supplier from eliminating all competition and taking over an entire marketplace.

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Anonymous Coward

Re: And again...

Where can I buy a macbook pro with anything other than OSX on it?

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Anonymous Coward

Re: Where can I buy a macbook pro?

Wrong question - should be "where can I buy an expensive laptop?" for which the answer is "loads of places".

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Anonymous Coward

Make it 100 trillion Euros, Microsoft will never pay it even if it was a £1 fine.

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Stop

fed up with this crap too

If the fine actually went to the people geninely affected it might be considered ok but it just goes to line the pockets of the bloody lawyers. Microsoft create significantly more jobs and wealth than any of those self serving faceless legal twats at Brussels!

Microsoft ain't perfect, no company is but FFS, enough is enough.

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Re: fed up with this crap too

By that logic, there's no point in prosecuting murderers because the victim is already dead. Fortunately, most legal experts reckon there is some merit in enforcing the law, even if the punishments don't completely rectify the situation.

Oh, and I'd be greatly amused to know how your "enough is enough" defence works out in court next time you forget to pay a bill.

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Re: fed up with this crap too

Don't be so churlish! It's not an issue that requires several billion in fines.

You don't have to use a PC, there are other choices.

Having chosen a PC, you don't have to use a Microsoft OS there are other choices.

Having chosen Microsoft as your OS of preference, you don't have to use IE, there are other choices.

All that will happen is the lawyers get nicer cars and homes and we, the consumers get increased prices to pay for it.

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Re: fed up with this crap too

Nicely put!

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Re: fed up with this crap too

MS built their monopoly position by selling people Windows where the users then had to install a non MS browser if they wanted to access the Internet via the web. This was because at the start MS didn't believe in the Internet and wanted to own their own network. Later MS decided that they would use the money they made from selling Windows to allow them to bundle IE "for free" and this then cut off the money supply to the other browser companies. This is the root of the problem. If MS had invented the web browser they would be allowed to do what the hell they like. But they chose to "give away" something that others had previously been able to earn a living from and MS had earned a living off the back of this trade.

> You don't have to use a PC, there are other choices.

Well that isn't really true for a great many people. As others have pointed out it is extremely difficult to buy a PC without buying a copy of Windows. MS has a contract with most vendors that makes it difficult to sell PC hardware without paying MS for a Windows license. MS then tend to threaten legal action against PC vendors who don't bundle Windows licenses because this, they claim, is encouraging piracy.

Secondly their is the issue that many services that people want to access require access to MS SW. In many case electronic submissions require files in MS formats. Now I guess MS can't be blamed directly for this, but it is a consequence of the monopoly position.

Personally I have to use MS SW to do my job even though my job involves working on HP-UX and Linux. Because of the effective monopoly of MS on the desktop, all the tools I need to use are only available on Windows. So sadly no I don't have a choice.

> Don't be so churlish! It's not an issue that requires several billion in fines.

The fine has nothing to do with being a monopoly or browsers or anything to do with computers.

The fine is purely because they are in contempt of court. They promised the court they would do X and they broke the promise.

Its a bit like breaking out of jail 2 days before your release date. It wouldn't do any good to argue in court that you should only be sent to jail for 2 days to finish your sentence, you'd be looking at a long stretch for breaking out of jail.

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Windows

I'm fed up with this crap too

But they keep selling new and crappier versions that are holding back progress.

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Anonymous Coward

Re: I'm fed up with this crap too

IE isn't sold, it's given away for free.

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Anonymous Coward

Re: IE isn't sold, it's given away for free.

There's a story behind that too. IE was based on the Spyglass Mosaic browser, Microsoft did a deal with Spyglass where they could distribute Mosaic in return for royalties on sales, then MS gave it away - no royalties for Spyglass, and a browser for Windows.

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Justice delayed

Microsoft had a monopoly, used it for a decade to destroy their competition and always got away with it. Now they lost their monopoly, but have to pay up for their old sins. Justice delayed is better than justice denied.

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Anonymous Coward

More importantly,

How about WIndows8RT that prevents any other browser, or any other OS being installed?

What about Apple that prohibits anything but Safari?

Surely these also need addressing in the same way.

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Re: Win8RT

As and when Win8RT has a near-monopoly share of its target market, I expect similar constraints will be applied.

People seem to forget that anti-trust laws were invented by people who really believed in the free market and saw that if one company acquires a dominant position, they can stop the free market from operating, and this is a bad thing if you believe in the free market. These laws (in the US as well as Europe) exist not because the socialists have taken over, but precisely the opposite. It's red-blooded capitalists determined to stop other red-blooded capitalists from cheating by playing "restrictive marketing" rather than "open competition on merit".

Socialists don't have a problem with monopolies, coz their ideal is a state monopoly on everything.

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WTF?

Re: More importantly,

"What about Apple that prohibits anything but Safari?"

Both Firefox and Opera have mac versions. I have had no trouble installing these on Mac OSX Lion. Is this some new usage of the word 'prohibits' that I haven't heard before?

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Happy

Re: More importantly,

Posted Thursday 19th July 2012 10:04 GMT

Anonymous Coward

Dear AC,

I have an Apple imac and I didn't like Safari, so I installed Firefox.

Installed Thunderbird for my email .

Both Open Source and both work well,and I am most happy

Well, I am even more happy because I have another computer with Ubuntu OS on it.

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The EU prats once again proving how far behind the times they are. When are Apple going to be forced into the same rules, bearing in mind they are attacking companies openly through the legal courts and lying every step of the way.

Just because your shiny iPad makes you feel intelligent does not make it so. I am saying bias in favour of Apple is absolutely at play, corrupt politicians bought their continued silence on this issue by Apple management.

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Anonymous Coward

Sometime after they have a monopoly to abuse, and actually abuse said monopoly. id est, no time soon

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Paris Hilton

FFS, there are just too many morons in the world who do not own or have access to a dictionary - or maybe they simply cannot be bothered to understand the basic concepts before they froth off here in the forum.

1: MS is a monopoly. There is a court judgment which declares this so.

2: APPL is NOT a monopoly because there is no judgment which declares it to be so.

It is all very well to hate APPL as success breeds contempt among the less intellectually capable - a sad fact of the human condition. However, constructing hater arguments against APPL claiming that APPL should be sanctioned like a monopoly, something they manifestly are not, is ignorant and profoundly foolish. The APPL haters in here look like right pillocks, and deservedly so.

Paris: Because she is not a pillock.

Let the downvotes begin.

philip

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Anonymous Coward

Just where does the EU think the money will come from?

Not out of Bill's account. No, it will ultimately raise the price of MS stuff to the poor shafted users who already pay more than in the US.

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Re: Just where does the EU think the money will come from?

Those "poor shafted users" could always, you know, just stop buying Microsoft software.

And the sooner they do that, the less it will hurt.

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Pirate

Solution. MS to buy Greece, lock stock and smelly Ouzo

Then they'll be able to do as they please with EU Rulings just like them Froggies over the Channel.

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