M$ predatory tactics to force competitiors out of business

thegeekster · 03-10-2004, 11:20 PM

Here's a couple of Michael's Minutes articles from Lindows.com which helps to illustrate what M$ is capable of, and will actually do, to maintain their monopoly...

Quote:

Can I Answer My Phone Without Paying 100,000 Euro?
Date Published: Mar 09, 2004

After the revelation last week that Microsoft seems to be playing a role in funneling cash to SCO to attack Linux, it should be obvious to even the most casual observer that Microsoft will do anything to try to halt Linux. This shouldn't surprise anyone, given Microsoft executives' prior conduct track record of breaking the law, and the many books chronicling their unethical behavior over the last two decades. Routinely, we see Microsoft intimidating companies that we interact with in the computer business who want to support desktop Linux. These partners and potential partners face Microsoft's threats to withhold technical support, to withdraw market development funds, to file lawsuits, and more.

In our own battles, Microsoft is trying to shut us down using any tactic possible. Because our website is our outlet to the world, Microsoft has focused their attack there. Two years ago, Microsoft asked a US court to shut down our website and, after a lengthy investigation and hearing, the court refused. Microsoft tried again in the US, and again they were denied. More than a year later, Microsoft snuck off to Finland and, with no notice to us, asked the Helsinki District Court to block the Lindows website. (While mentioning the US lawsuit, Microsoft conveniently left out the two US Court orders denying the same request for an injunction.) The Helsinki court said sales should be halted in Finland, but refused to block the website. At this point, Lindows did not know that they had filed papers in Finland so we were not able to oppose them. Microsoft then took this ruling to Sweden and asked the Stockholm City Court to block our website and sales. Again, the Judge refused to block website, but did block sales in Sweden. Once again, Lindows was not given any notice, and was not able to oppose their actions. (This is called an ex-parte ruling, when the court decides a request without the defendant being informed or given an opportunity to respond.) Once we heard about the orders in Sweden and Finland, we went to both of those courts asking them to reconsider. These appeals are under way.

From there, Microsoft went to the Netherlands, and found a court willing to rule that simply viewing the Lindows.com website is forbidden. The District Court in Amsterdam issued an order that www.lindows.com must be made inaccessible to visitors from Belgium, the Netherlands, and Luxembourg. Microsoft knows that there is no way to effectively block only browsers from those three countries--short of shutting down our web site to all visitors worldwide. They are now asking the court to fine us 100,000 Euro per day, for every day that the website is accessible, a sum which a small company like Lindows obviously cannot not pay. (For the record our total sales over the last two years in all three affected countries combined represent a small fraction of one day's 100,000 Euro penalty.) With Microsoft's $60 Billion in the bank, they have a virtually unlimited legal budget with which they can simply sue, and sue again, until they win.

This conflict has now morphed into something much larger than a trademark squabble and may determine who decides what consumers around the world can see on the Internet. You are witnessing how an established company can simply sue a tiny new competitor in country after country until they achieve the outcome they desire. Because websites are reachable from virtually every one of the 191 countries around the world, companies following Microsoft's path have 191 attempts to get the outcome they desire, even after they are flatly rejected by a United States Federal Court. After five tries over two years, Microsoft finally located a court that would give them what they want. Now, Lindows.com is forced to either shut down its entire website or risk massive financial penalties.

I want to be clear about our position. We are not disputing the jurisdiction of the Netherlands. We believe it's important to honor the rule of law, and we have in good faith been fighting Microsoft in courts around the world for over two years. After the Dutch court's ruling against us, we put up a notice on every page of our website. We halted both digital and physical sales from Lindows to the affected countries. We removed links on our website to our resellers in those countries. We sent out notices to our resellers. We regret the court's decision to bar sales of LindowsOS in those countries, but we fully intend to honor the court's order. The only outstanding question is: just because our servers are connected to the Internet, does that mean than anyone else connected to the same wires can dictate what we do with our servers in the US?

Would it be OK for a foreign Judge to rule that if someone calls my US office from another country that I cannot utter the word 'Lindows' when I answer the phone, simply because our phone lines were connected? And worse, if I answered the phone, should I incur a fine of 100,000 Euro per day? Our phones may be connected to some of the same wires that a web visitor would travel when connecting to the Lindows.com website. If they can insist a website be shut down so their residents cannot access it, why not the phone system as well? It sounds preposterous, but this appears to be what is unfolding in the Netherlands, and every Net citizen should be worried. We may be headed toward a world in which rich companies can shop around, repeatedly searching for a friendly court that is willing to ban content, ideas, products and choices with which they may disagree.

Click here to read about our legal battles with Microsoft

-- Michael

Lindows.com article...

thegeekster · 03-10-2004, 11:21 PM

The second article...

Quote:

Gates at my Alma Mater
Date Published: May 27, 2003

This week Bill Gates came to my alma mater to speak. I have to admit that I was less than thrilled to have UCSD roll out the red carpet for him, but it's understandable since he is the richest man in the world and runs the richest company in the world. I started to think about the young people who would be in attendance though, and that they were in diapers when Microsoft started. They've grown up in a Microsoft-only world, that's the only thing they know and few have any perspective about how Microsoft came to dominate the PC business. In the absence of information otherwise, they'll assume that it was through healthy, free enterprise -- which I don't believe is true.

Anyone who tracks the PC business, recognizes that Microsoft has clearly been on a propaganda campaign for the last few years to clean up their image. They have been spending big money in an effort to do so on TV, in print and public appearances. They would like the world to think of Microsoft as an innovative company and of Mr. Gates as a visionary and a philanthropist. Mr. Gates is clearly very smart and Microsoft is a vicious competitor, but I'm not so sure the facts indicate they are innovative or visionary. So I've put together a two-page background on Mr. Gates and Microsoft to add some historical perspective to the debate, which I passed out to those in attendance. I hope you find it helpful to form your own conclusions.

================================================================
Fact Sheet On Bill Gates and the Microsoft Corporation

Q: Can you provide some background on Bill Gates?
A: Bill Gates was born in 1955 and founded the Microsoft Corporation in 1975 with Paul Allen. Mr. Gates was CEO and Chairman of Microsoft until 2000, when he gave up the CEO title to Steve Ballmer. During that time, Microsoft became the largest and richest software company in the world, with $46 billion in the bank and adding nearly one billion per month to that total. It has made Bill Gates the richest man in the world with an estimated wealth of $54.44 billion dollars or $187 for every man, woman and child in the United States.

Q: Can you provide a brief history of Microsoft?
A: In the early 1980s, IBM asked Microsoft to produce an operating system for their upcoming "personal computer." That product became MS DOS and made billions for Microsoft. Microsoft followed that up with Microsoft Windows and the components of Microsoft Office (Microsoft Word, Microsoft Excel and Microsoft PowerPoint).

Q: Doesn't that make Microsoft the most innovative PC software company?
A: Virtually every successful Microsoft product was either purchased from another company, or a direct copy of an existing company's successful product. Microsoft's first major success, MS DOS, was purchased from another company and renamed from QDOS. Microsoft Windows was a copy of Apple's innovative Macintosh operating system. Microsoft Word (1983) was a copy of Wordperfect (1982). Microsoft Excel (1985) was a copy of Lotus 1-2-3 (1983). Using revenue from their monopolies, Microsoft purchased PowerPoint (from Forethought), Frontpage (Vermeer), Visio (Shapewear), IE (Spyglass), IIS (Spyglass) and SQL Server (Sybase) .

Q: The history of PC software is made up of companies borrowing ideas from others, so what is wrong with that?
A: To some degree, almost all technology companies build on existing ideas. Microsoft, however, has often engaged in wholesale copying without adding much. With many of the original companies gone or withering, Microsoft is embarking on a calculated plan to rewrite history and position themselves as the original innovator. For example, Microsoft now claims that they are the sole inventor of "windows" and no other company can use that term -- in spite of the fact that Microsoft Windows was such a close copy of the Apple Macintosh that it triggered a lawsuit upon its release (See http://law.richmond.edu/jolt/v1i1/myers.html).

Q: Even if they're not innovative, Microsoft's products are used so widely that they must be making great products, which makes Microsoft a great company, right?
A: Normally, when a company enjoys success it's a sign of a good company serving their customers. While Microsoft employees have surely worked hard, their success has been tainted by decades of illegal actions by Microsoft's management to secure, maintain and extend their monopoly position.

After the success of MS DOS, a competing product emerged called DR DOS, causing MS to lower their prices. Bill Gates wrote in an e-mail, "I believe people underestimate the impact DR-DOS has had on us in terms of pricing" (May 18, 1989). So Gates gave orders to executives at Microsoft to purposely sabotage DR DOS. "Make sure it [DR DOS] has problems running our software in the future." And where it didn't have problems, programmers were instructed to create bogus error messages saying that it did. The tactic worked and DR DOS was forced out of business, leaving the Microsoft monopoly. Years later, MS paid more than $100 million to settle this case -- long after DR DOS was no longer a threat (See www.drdos.com/fullstory/factstat.html).

With the MS DOS monopoly as a foundation, Microsoft continued a series of illegal actions designed to extend their monopoly to additional products, including Microsoft Windows and Microsoft Office. For example, they stifled competition by threatening and extorting computer manufacturers to enter into licenses agreeing to only carry Microsoft products. By the time the Justice Department caught up to them and filed two antitrust cases for a wide range of unfair and anti-competitive actions (1993, 1996), Microsoft had cemented a massive monopoly which gave them hoards of cash to fight any company -- or even the government. Microsoft settled the first case, agreeing to change its illegal marketing practices and was found guilty in the second case (See http://www.washingtonpost.com/wp-srv.../documents.htm).

Q: Isn't this just a case of the losing companies complaining because they couldn't compete?
A: Over the last 20 years, it is difficult to find another company which exhibits such a lengthy pattern of illegal behavior designed to thwart competition. E-mail from a MS executive said it best, "It seems clear that it will be very hard to increase browser share on the merits of IE [Internet Explorer] 4 alone...It will be more important to leverage the OS asset to make people use IE instead of Navigator" (2/24/97). There have even been cases where Microsoft has stolen technology which has put companies out of business, such as San Diego's Stac Electronics. A jury found MS guilty and ordered them to pay $110 million (See www.vaxxine.com/lawyers/articles/stac.html).

Q: Where does Microsoft make their money?
A: Microsoft makes money largely from two product lines: operating system (Microsoft Windows XP) and office suite (Microsoft Office). Virtually every other venture that Microsoft has embarked upon has not generated a profit -- including WinCE, Xbox, MSN, WebTV, Sidewalk, MSNBC, etc. (See http://biz.yahoo.com/e/l/m/msft.html).

Q: If most product lines lose money, how can they generate such large profits?
A: Through illegal tactics, Microsoft has been able to secure and keep a monopoly which allows them to charge very high rates for their software. Enabled by the monopoly, Microsoft's profit margins are 5 times greater than the average from top 500 US companies. If Microsoft faced meaningful competition, their profits would be more in line with the rest of corporate America and software would cost 1/5 what it does today (See http://research.businessweek.com/scoreboard.asp).

Q: Aren't all of these actions ancient history? Since Microsoft has been under government scrutiny, haven't we seen improved corporate behavior?
A: Microsoft's massive war chest and unchanged management team means more corporate wrongdoing. This makes it extraordinarily difficult for competition to emerge. Just last week, an e-mail was revealed in which Microsoft executives disclosed a $180 million fund designed to thwart Linux by giving away Microsoft software and services -- the same successful strategy they used to put Netscape out of business (See www.iht.com/articles/96369.html). In another example, over the past year, Microsoft has spent millions in legal fees in an attempt to shutdown a San Diego Linux company, Lindows.com (See www.lindows.com/opposition).

Q: But doesn't Microsoft do a lot of good?
A: The charitable giving that Microsoft advertises is usually a business tactic, where they give away software in an attempt to gain traction in a market, such as they do with schools. The software costs them just pennies to reproduce, but they advertise the full retail value for tax and PR reasons. Microsoft rarely gives actual cash (See: http://www.nytimes.com/2003/05/26/te...gy/26SOFT.html).

Q: Hasn't Mr. Gates given away billions of dollars?
A: Nearly 20 years after starting Microsoft and only after antitrust issues emerged, Mr. Gates created a foundation and moved billions of dollars of stock, tax free, into this new organization, which he controls as the sole trustee. Mr. Gates' PR folks have convinced major publications to carry as many as 5 stories in 3 days about the multi-billion dollar foundation in an attempt to bolster Mr. Gates' image (See http://theregister.co.uk/content/4/28039.html). By repeatedly trumpeting the formation of the foundation, then announcing individual initiatives and finally announcing individual grants, readers are left with the impression that billions of dollars are routinely dispersed, but that is simply not true. In 2001, the Gates Foundation collected more money in interest from their holdings than they dispersed in grants (See: www.fdncenter.org).

More troublesome, Mr. Gates has used monies from the foundation he controls, in concert with Microsoft's corporate goals. In an attempt to sway Cox Communications to use Microsoft software, Microsoft agreed to financially back them in November, 2001. Two months later Mr. Gates purchased $500 million dollars of Cox stock using $200 million of funds from his non-profit foundation (See http://www.eureka-boston.org/reading...foundation.htm). In another example, MS gave hundreds of millions to thwart Linux growth in the Indian government, while also making funds available from the Gates foundation to Indian government initiatives (See http://news.com.com/2100-1001-965378.html).

Q: What can we expect Mr. Gates to talk about?
A: Mr. Gates will likely spend some time speaking about the importance of innovation and open standards. However those are just platitudes, since their actions achieve exactly the opposite. Their monopoly is built upon proprietary formats that they have no intention of publishing (e.g. Microsoft Office file format specifications), because that would allow competition. Furthermore, they have attempted to squash any standard which they believe threatens their stranglehold -- such as MP3, HTML and Java. An internal MS document entitled "Strategic Objective" had this to say about Java: "[Lets] Kill cross-platform Java by growing the polluted Java market."

In spite of the conciliatory comments Mr. Gates conveyed, Microsoft will continue to use their monopoly powers to destroy other companies - which limits competition and innovation and keeps software prices high. "Do we have a clear plan on what we want Apple to do to undermine Sun?" (Bill Gates e-mail 8/8/97) A series of recent leaked internal memos reveal an ongoing attempt by Microsoft to discredit and derail the latest perceived threat - Linux. (See www.opensource.org/halloween/)
================================================================

Microsoft is engaging in a calculated and comprehensive effort to rewrite history. In doing so, they position themselves as an innovative company and Mr. Gates as a visionary and philanthropist. Please research those claims for yourself on the Net, use the sources listed in this document to determine for yourself, the veracity of their claims.

-- Michael

Lindows.com article...

witeshark · 03-10-2004, 11:30 PM

YUP! It's ALL true! gates is the script oldie fart from hell and nothing more then a software pirate! Just a glorified script EXkiddie in crashing flight. HA! here is a peek back at the creep.

macewan · 03-11-2004, 05:16 AM

http://www.maxframe.com/DR/Info/fullstory/factstat.html

JaseP · 03-11-2004, 07:51 AM

My only thing is how is M$ going to enforce a foriegn judgment in a US court when the US court has already ruled against them on the issue, domestically???

The court would likely invalidate such a judgment being void as against public policy. If I were the Court, I would hold M$ in contempt and order THEM to pay their own instituted fine.

thegeekster · 03-11-2004, 09:11 AM

Quote:

Originally posted by JaseP
My only thing is how is M$ going to enforce a foriegn judgment in a US court when the US court has already ruled against them on the issue, domestically???...

It wouldn't be up to M$ to enforce it..............It's whether the fines M$ wants the foreign courts to impose on Lindows can be enforced legally in the US which would eventually bankrupt Lindows and M$ wouldn't have to lift a finger at all...........

Quote:

...Microsoft knows that there is no way to effectively block only browsers from those three countries--short of shutting down our web site to all visitors worldwide. They are now asking the court to fine us 100,000 Euro per day, for every day that the website is accessible, a sum which a small company like Lindows obviously cannot not pay...

SciYro · 03-11-2004, 06:16 PM

a TV show a year or so ago on the history channel (about the start of PC's , or was it hackers?), it showed a letter from bill gates (in early years of M$ i think) to some computer group in California i think it was, the jist of it i remember was :

he called them thiefs, for taking and expanding on others ideas, while the hard workers (at M$) worked hard to do make things

i do also think it was because of these early computer groups that M$ is were it is today?, after all, we might not have personal computers in our house that are relatively inexpensive, but im not sure...

JaseP · 03-11-2004, 10:05 PM

Quote:

Originally posted by thegeekster
It wouldn't be up to M$ to enforce it..............It's whether the fines M$ wants the foreign courts to impose on Lindows can be enforced legally in the US which would eventually bankrupt Lindows and M$ wouldn't have to lift a finger at all...........

Ummm,... No.

I'm an attorney.

A foreign judgment in the USA is not automatically enforced. Someone has to cross-file that judgment in the USA to enforce it. That someone would be M$, as the State Dept. would look upon this as a civil matter. I know of no treaties that compell enforcement of European judgments in the USA without due process in the USA (it would violate the US Constitution to deny the US citizen the opportunity to have due process). So M$ attys would have to bring the matter forward by filing the foreign judgment, and seeking execution of it, which would give Lindows a chance to file objections to the entry of judgment...

thegeekster · 03-12-2004, 03:11 AM

Thank you, JaseP......

So, would M$ still be able to persuade the US courts to enforce those foreign rulings if they (the foreign courts) do decide to go along with M$'s plea to fine Lindows, even though M$ couldn't get any US court to shutdown the Lindows website?............

JaseP · 03-12-2004, 07:44 AM

Quote:

Originally posted by thegeekster
Thank you, JaseP......

So, would M$ still be able to persuade the US courts to enforce those foreign rulings if they (the foreign courts) do decide to go along with M$'s plea to fine Lindows, even though M$ couldn't get any US court to shutdown the Lindows website?............

It's very unlikely. Since Lindows won in the USA, a US Fed. Judge would not be likely to enforce the foreign judgment, especially since M$ filed and obtained most of them ex parte, or without notice to the other side. It would violate US notions of fundamental fairness and due process, as well as flying in the face of the res judicata (translated: "The Thing is Decided" ) from the US actions. I would, in fact, believe that a US judge might get quite irrate with M$ over this, and quite possibly enter a rule 11 motion (a federal rule on spiteful and spurious litigation) against M$ on his/her own motion, forcing M$ to pay Lindows attys fees.

A US court ( In terms of from state to state, or foreign to federal) can rule a foreign (other state or other country) motion unenforceable as against public policy. In this case, I would assume they would do so. Of course, fighting it would be expensive and a hassle.

thegeekster · 03-12-2004, 09:41 PM

So, JaseP, it would come down to M$ just trying to put a financial drain on Lindows any way they can (who doesn't have the financial capital that M$ has access to), maybe hoping to drag things out long enough to financially ruining Lindows.............for M$, I'm sure they would be aware of such an outcome and if they do end up having to pay Lindows legal fees and court costs, it would only be a drop in the bucket for them.....

Thanks for shedding some light on the legal aspects....................