Microsoft Hatred FAQ

[David Schwartz]

claim 1a) Microsoft's tactic is X (fill in, please)
judgment 1b) tactic X is somehow not as bad as (sense?) offering
"exclusive wholesale deals" (please define)

Umm, it's not a judgment. Microsoft said you can sell Windows and other
operating systems, but there will be a charge for every machine you sell
without Windows -- if you want to be able to buy Windows wholesale. Someone
could comply with this by not selling any other operating systems at all and
never pay the fee. Therefore, this is a lesser restriction than saying you
can only sell Windows wholesale if you don't sell or offer any competing
systems. If I have the right to say you can't use my car at all, I have the
lesser right to impose the lesser restriction that you can only use my car
if you pay me $10.

Microsoft's specific tactic was to offer Windows wholesale only as part
of a franchise arrangement. The franchise arrangement stipulated a fee per
system sold, whether or not the system included Windows. This is a lesser
version of the more typical franchise arrangement which only lets you sell
branded products and doesn't let you sell or offer non-branded products.

If you want to sell meals with Whoppers in them, you have to get
permission to do so from Burger King corporate. And they will not let you
also sell Big Macs in the same store, even if McDonald's had no objection.

If you owned a Burger King and wanted to offer a competing burger,
Burger King corporate might let you do so, but it would be totally
reasonable for them to insist on a fee even for non-BK products sold. This
is because it is their products, reputation, and marketing that creates the
customer flow that you are using to sell your products. Similarly, by his
own admission, it is his ability to sell Microsoft products that allows him
to have a business at all and it creates the customer flow that he would use
to sell the competing products. Microsoft's insistence on some money in
exchange for this is not unreasonable.

Many companies require you to agree to various types of things in order
to obtain their products wholesale. The Microsoft Windows wholesale
agreement was not vastly different from many such agreements.

If another company with smaller market share made a similar insistence,
nobody would have raised so much as an eyebrow.

Tough - that's what salespeople are for (notionally, in a shop you
trust).

So should Burger King be required to allow McDonald's salesman in their
stores? Or should Burger King corporate be prohibited from disallowing
Burger King store owners from telling their customers that the burgers are
better across the street at the McDonald's he owns?

DS

 

[Paul Rubin]

If you want to sell meals with Whoppers in them, you have to get
permission to do so from Burger King corporate. And they will not let you
also sell Big Macs in the same store, even if McDonald's had no objection.

Why do you keep comparing Microsoft with Burger King? They are not
the same. Burger King is operating in a competitive environment.
Microsoft is a convicted illegal monopolist. Monopolists are not
allowed to do the same things that competitors are allowed to do.
So, your observations about Burger King are irrelevant to Microsoft.

 

[Roedy Green]

Umm, it's not a judgment. Microsoft said you can sell Windows and other
operating systems, but there will be a charge for every machine you sell
without Windows -- if you want to be able to buy Windows wholesale. Someone
could comply with this by not selling any other operating systems at all and
never pay the fee. Therefore, this is a lesser restriction than saying you
can only sell Windows wholesale if you don't sell or offer any competing
systems. If I have the right to say you can't use my car at all, I have the
lesser right to impose the lesser restriction that you can only use my car
if you pay me $10.

It makes a big difference that MS has a monopoly.

If I open an washing machine store and Maytag says, "we only sell
wholesale to you if you agree to sell our brand exclusively."

What Microsoft did is different for three reasons:

1. the Maytag agreement made up front, not imposed to shut down a
business who has never signed a prior exclusivity contract.

2. The appliance store has lots of other brands to sell. In my case,
failing to comply with MS's illegal and immoral demand would put me
out of busness. They were forcing me into commit criminal acts or lose
my business.

3. Maytag makes the machines. In the computer instance, we at CMP
custom build the computers. Microsoft have no business telling me what
to do when they supplied only one component. I could not even sell a
BARE computer.

 

[Roedy Green]

... and were told not to by a court. Which is the whole reason for the
existence of IBM clones, whether PCs or mainframes.

Back in the early days, IBM was just as bad as MS. Competition and
some smackdown by the DOJ, have made them much better behaved.

 

[Peter T. Breuer]

. Microsoft said you can sell Windows and other
operating systems, but there will be a charge for every machine you sell
without Windows -- if you want to be able to buy Windows wholesale. Someone
could comply with this by not selling any other operating systems at all and
never pay the fee. Therefore, this is a lesser restriction than saying you
can only sell Windows wholesale if you don't sell or offer any competing
systems.

No - you claim that allowing somebody (by contract?) to do Z at a
penalty is "lesser" than disallowing them from doing Z. Sorry - both
are equal in market economics (where the financial imperatve rules).

Indeed, no contract can "disallow" somebody from doing Z - you are
always at liberty to break a contract! (See the RH Enterprise licence
as an example of a contract that you are at liberty to break by copying
RHE to more machines at the penalty of losing RH maintenance support- I
recently had this argument with Rick Moen). The penalty for doing so
is what is at issue.

So your definitions are anyway without semantic content, and hence the
argument cannot proceed.

And even if the argument were too proceed, your use of "lesser" would
fail, because it appears to mean "is a (proper) subset of the ways
that" without having established what different (i.e. same) means, and
I'd submit that there is no diffence between the elements you exhibit
in the setting of market regulation law.

Peter

 

[Peter T. Breuer]

3. Maytag makes the machines. In the computer instance, we at CMP
custom build the computers. Microsoft have no business telling me what
to do when they supplied only one component. I could not even sell a
BARE computer.

I'm a bit curious about this. If I were a business person, I would
simply have created two busineses (two accounts, etc.). One business
sells only machines with MS on and pays the MS tax on all its machines.
One business sells only machines without MS on and pays the MS tax on
none of its machines.

What's up with that?

Peter

 

[David Schwartz]

Why do you keep comparing Microsoft with Burger King? They are not
the same. Burger King is operating in a competitive environment.
Microsoft is a convicted illegal monopolist. Monopolists are not
allowed to do the same things that competitors are allowed to do.
So, your observations about Burger King are irrelevant to Microsoft.

Because the error I'm correcting is the belief that Microsoft's conduct
was extremely unusual (unlike anything any reputable company had ever done,
essentially). I understand that people think it was wrong because it was
specifically Microsoft that did it and the specific circumstances they were
in with respect to their market. I've addressed that in other parts of this
thread.

DS

 

[David Schwartz]

It makes a big difference that MS has a monopoly.

See my other response to this specific argument.

If I open an washing machine store and Maytag says, "we only sell
wholesale to you if you agree to sell our brand exclusively."

What Microsoft did is different for three reasons:

1. the Maytag agreement made up front, not imposed to shut down a
business who has never signed a prior exclusivity contract.

The Microsoft agreement is also up front. It's not "imposed" in any
sense except that it's one of the conditions for buying Windows wholesale.

2. The appliance store has lots of other brands to sell. In my case,
failing to comply with MS's illegal and immoral demand would put me
out of busness. They were forcing me into commit criminal acts or lose
my business.

In other words, what Microsoft had to offer you was of such value that
you'd have no customers without it. To put it another way, those are
Microsoft's customers because it's your ability to sell Microsoft products
that makes your business.

3. Maytag makes the machines. In the computer instance, we at CMP
custom build the computers. Microsoft have no business telling me what
to do when they supplied only one component. I could not even sell a
BARE computer.

The "one component" is what makes the product you're selling. It's
"Windows PCs" that people are buying and it's the look and feel of a
"Windows PC" that makes it what it is.

There is no different to Microsoft beween a bare computer and one
preloaded with Linux or FreeBSD. One can quickly be converted to other with
minimal cost of effort. In the market, bare PCs really do compete with
Windows PCs.

DS

 

[David Schwartz]

On 26 Oct 2005 18:05:45 +0200, Tor Iver Wilhelmsen
who said :

Back in the early days, IBM was just as bad as MS. Competition and
some smackdown by the DOJ, have made them much better behaved.

And opened the door for Microsoft.

DS

 

[David Schwartz]

No - you claim that allowing somebody (by contract?) to do Z at a
penalty is "lesser" than disallowing them from doing Z. Sorry - both
are equal in market economics (where the financial imperatve rules).

Umm, no it's lesser in a strictly logical sense.

Indeed, no contract can "disallow" somebody from doing Z - you are
always at liberty to break a contract! (See the RH Enterprise licence
as an example of a contract that you are at liberty to break by
copying RHE to more machines at the penalty of losing RH maintenance
support- I recently had this argument with Rick Moen). The penalty
for doing so is what is at issue.

So your definitions are anyway without semantic content, and hence the
argument cannot proceed.

My argument proceeds exactly the same if they're equal as if they're
lesser. It is totally not dependent upon how much lesser it is.

And even if the argument were too proceed, your use of "lesser" would
fail, because it appears to mean "is a (proper) subset of the ways
that" without having established what different (i.e. same) means, and
I'd submit that there is no diffence between the elements you exhibit
in the setting of market regulation law.

My argument proceeds the same if they're equivalent. (Did you read it?!)

DS

 

[Mike Schilling]

There is no different to Microsoft beween a bare computer and one
preloaded with Linux or FreeBSD. One can quickly be converted to other
with minimal cost of effort. In the market, bare PCs really do compete
with Windows PCs.

There's a huge difference to the non-techy consumer. One of the buggest
reasons Linux has had a reputation of being harder to use than Windows was
the fact that Linux had to be installed, while Windows just booted up.

 

[Paul Rubin]

Because the error I'm correcting is the belief that Microsoft's conduct
was extremely unusual (unlike anything any reputable company had ever done,
essentially).

MS's monopolistic conduct was uncommon, but not so extremely unusual
as to be unheard of. Congress had indeed seen conduct like that
before, which is why it saw the need for passing laws against it.

 

[David Schwartz]

There's a huge difference to the non-techy consumer. One of the
buggest reasons Linux has had a reputation of being harder to use
than Windows was the fact that Linux had to be installed, while
Windows just booted up.

Is that really true? I mean, I remember distributions of Linux that you
could just stick in the CD, boot from CD, and you were up in minutes.
Installing was as simple as pushing the 'install to hard drive' button.

I think one of the biggest reasons Linux has a reputation of being
harder to use than Windows is that it *is* harder to use. However, the
payoff is that when a Linux machine breaks, you can fix it. When a Windows
machine breaks, you pretty much have to reinstall. And Windows machines
break in this way more often because it's much harder to limit what a user
or program can do.

Linux, for example, would be easier to use if it had no permissions
checks and always ran everything as root. However, it doesn't do this the
way Windows does (or more accurately, the way Windows users typically do),
because that's just not the Linux way.

I'm trying to think of a good analogy to make my point clearer, but I
can't.

IMO, a person who doesn't find installing Linux to be easy wouldn't be
able to use a Linux desktop (or do much with a Linux server either for that
matter). But I could be out of date, I haven't really tried to use the more
recent Linux desktop builds as desktops. But, IMO, that was certainly true
in the time frame we're talking about.

DS

 

[David Schwartz]

MS's monopolistic conduct was uncommon, but not so extremely unusual
as to be unheard of. Congress had indeed seen conduct like that
before, which is why it saw the need for passing laws against it.

But there is no law against that type of conduct, *unless* you are a
monopolist. So your conclusion hinges on the determination that Microsoft
had a monopoly, and that hinges on the definition of the "market". That's a
different can of worms for a different part of this thread.

DS

 

[Roedy Green]

I'm a bit curious about this. If I were a business person, I would
simply have created two busineses (two accounts, etc.). One business
sells only machines with MS on and pays the MS tax on all its machines.
One business sells only machines without MS on and pays the MS tax on
none of its machines.

What's up with that?

Try the same thing to deal with a Mafia extortion racket.

We are not talking about legal agreements. We are talking junior Mafia
style enforcement.

 

[Roedy Green]

The Microsoft agreement is also up front. It's not "imposed" in any
sense except that it's one of the conditions for buying Windows wholesale.

No it was not . It was never on paper. It was not imposed until I
had been in business for at least 5 years.

 

[Roedy Green]

There is no different to Microsoft beween a bare computer and one
preloaded with Linux or FreeBSD. One can quickly be converted to other with
minimal cost of effort. In the market, bare PCs really do compete with
Windows PCs.

You think it is OK to force someone into a choice of committing a
criminal act with the alternative of losing their established business
and having to put 8 employees out of work. What religion do you belong
to?

 

[David Schwartz]

Try the same thing to deal with a Mafia extortion racket.

This is precisely my point. Your premise is that a gun is no different
from a persuasive argument. You need this principle to justify responding to
arguments you don't like with guns. I reject this premise at its roots.

We are not talking about legal agreements. We are talking junior Mafia
style enforcement.

Can you cite any evidence of Microsoft actually using or threatening
force?

DS

 

[David Schwartz]

No it was not . It was never on paper. It was not imposed until I
had been in business for at least 5 years.

I guess I don't understand what you're saying. Are you saying that
Microsoft demanded you pay them per machine you sold under the table in the
absence of a written contract that said that? Or are you simply saying that
they changed the terms of your agreement when it came up for renewal?

DS

 

[David Schwartz]

You think it is OK to force someone into a choice of committing a
criminal act with the alternative of losing their established business
and having to put 8 employees out of work. What religion do you belong
to?

You often say things that just seem to have come out of the blue with no
connection whatsoever to anything else. What criminal act was someone forced
into committing? What are you talking about?

If you have a business that sells PCs only because those PCs come
preloaded with Windows, and without Windows to offer, there would be no
market, then you have a business that exists at Microsoft's pleasure. The
same thing would be the case with any piece of software by any manufacturer.

Now, not all manufacturers would use their leverage, of course. But
don't you think it would be pretty stupid of them not to? Why shouldn't they
get from you, and why aren't they entitled to, as much as the ability to
sell Windows is worth? Since, by your own admission, it's what made it
possible for you to be in business?

You say you couldn't stay in business without the ability to sell
Windows wholesale. That means that every customer you get, in some part you
owe to Microsoft. Why shouldn't you pay them their fair share of that?

DS