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Computer Maker Files Antitrust Suit Against Microsoft

malebolgia   on 23 February 2006 - 04:47 · 15 comments & 2627 views

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Computer maker Tangent has filed a federal antitrust suit against Microsoft, accusing the software maker of anticompetitive behavior that forced it to overpay for the Windows operating system.

The suit, filed last week in the Northern District of California, charges Microsoft with violating the Sherman Act and seeks to recover triple damages from the software maker.

"Microsoft's exclusionary and restrictive practices...have caused significant harm to (Tangent) by increasing, maintaining or stabilizing the price it paid for Microsoft's operating system software above competitive levels," Tangent said in its suit. Tangent, based in the San Francisco Bay Area city of Burlingame, makes computers, servers and thin clients, primarily for the education, government and business markets.

News source: C|Net News.com




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(3 replies) #1 XerXis on 23 Feb 2006 - 15:34
i don't get it, if they have to pay more for windows OS why don't they charge the extra cost to their customers? what are they complaining about? and it's not like it's against the law to make computers without windows, so why do they stick with windows if they thinks it's not cheap enough :s
#1.1 markjensen on 23 Feb 2006 - 15:50
Well, the article is lacking all the necessary details, so one cannot tell if this case holds much merit or not.

But, using your example, let's show how this can adversely affect a company:
  • Microsoft has 10 OEM customers it licenses Windows to, OEMs A, B, C,... J.
  • OEMs A-I are given preferential pricing for their compliance in other acts, like not pre-installing Firefox/Opera, or not offering Linux systems.
  • OEM J offers customers a choice in default browsers, and has systems with Opera pre-installed for sale.
  • Microsoft's hackles are raised, so they now price Windows at near list price to OEM J.
  • OEM J is no longer able to sell PCs at prices that compete with A-I, and sales drop.
  • OEM J has reduced profits, and stock prices also drop, making the business much less valuable.
Just as an example.
#1.2 Poof on 23 Feb 2006 - 18:00
Well, I think the issue is more of a "Tangent is only selling 500 units/month, so bulk OEM licenses discount only 25%." Meanwhile.... "HP is selling 5000 units/month, so bulk OEM licenses discount only 60%." ... Now, personally, I see nothing wrong with this. It's called ordering in bulk. And that's the only thing I can see Microsoft doing that's causing the price of a license to go up for the company. Meh.

~
#1.3 markjensen on 23 Feb 2006 - 18:16
^^^ I agree with you on the volume thing. I was explaining how their Windows OEM pricing could affect their prices/sales/profitibility.

There are valid reasons for price differences. And there are invalid ones. As no real information is out on this, we just don't know enough about this situation to make any good opinions yet.

(not that it has stopped people here from concluding that this must be a "litigation lottery" thing) :sigh:
#2 sphbecker on 23 Feb 2006 - 15:39
"Microsoft's exclusionary and restrictive practices...have caused significant harm to (Tangent) by increasing, maintaining or stabilizing the price it paid for Microsoft's operating system software above competitive levels"

So what are they complaining about, that MS changes too much or too little for Windows??? Either way this sounds pretty stupid.
#3 fudgetunnel on 23 Feb 2006 - 15:48
For a company damaged enough to sue, they sure have Microsoft banners literally plastered all over their site. I just love seeing others biting the hand that feeds.
#4 kirk26 on 23 Feb 2006 - 15:54
I guess another company needs some money.
#5 Darkinspiration on 23 Feb 2006 - 16:35
It always been a known fact that microsoft tend to play with OEM prices. If i recall correctly that as also been exposed at theyre last antitrust trial.


#6 Octol on 23 Feb 2006 - 16:59
I'm thinking about starting my own computer company. However, I know that competition is tough, that there's a great likelyhood that the business will have financial problems, and that I'll end up suing Microsoft to get the funding necessary to get me out of the hole.

So I figured why not? I'll save everybody a great deal of hassle by simply informing Microsoft's lawyers that I plan to sue them in the future to rescue me from my own incompetence, and that it should go ahead and send me the money now.

My only problem is figuring out how much to ask for. Waddya think? $5 million? $10 million?

Hmmm...I guess I better ask for a couple of million more to compensate me for all the pain and suffering I'm going through trying to come up with the right amount to ask for.
(2 replies) #7 MrCobra on 23 Feb 2006 - 21:32
Yawn, Yawn, and Yawn. These 'let's sue Microsoft' stories are old. I wish I could sue everyone to make my money.
#7.1 markjensen on 24 Feb 2006 - 00:22
You can! You just need to have enough evidence to prove your claim.
#7.2 Ideas Man on 24 Feb 2006 - 20:55
Nah, you don't even need that when you sue Microsoft, just 'pull-a-Real' and cry to a government authority who also is in need of money, then it's a confirmed win-win scenario for both of you.
#8 edlowe0 on 24 Feb 2006 - 13:15
Hmmm, how much do other non-OSS operating systems cost? Mac, etc? What features do they come with? SSDD here. Someone's just looking for a handout and a scapegoat.
#9 Fighter-X on 24 Feb 2006 - 23:31
Is Sueing Microsoft the only way to get money? Stupid Tangent.
#10 Colin-uk on 28 Feb 2006 - 11:10
there sueing microsoft because they dont like how much they paid for software? wtf...

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