Microsoft Fined Over MS Office Suite Pricing Practices
Article by George Norman
On 13 Apr 2009
The German competition authority, Bundeskartellamt, has issued a €9 million (over $11 million) fine to the Microsoft Corporation because the Redmond software developer apparently worked hand in hand with a software retailer in order to set MS Office suite prices at a certain level. Microsoft stated that it will pay the fine because it does not want the case to drag on and on, not because it agrees with the court’s decision. And the reason why Microsoft does not agree with the court is because it only met up with one retailer in order to talk Office pricing practices, which does not represent an ongoing consistent practice on Microsoft’s behalf.

The truth of the matter is that a software developer and a retailer can meet up and discuss pricing tactics and practices; but when the software developer actively coordinates the pricing activities of the retailer, and when the developer and retailer agree on how the retailer should act in future events, then the software developer has crossed the line. This is precisely what happened in the autumn of 2008: Microsoft financially supported an advertising campaign conducted by one retailer, retailer with whom Microsoft met up on at least two occasions and established a resale price for MS Office Home and Student 2007.


According to Bundeskartellamt, Microsoft accepted the fine, but not without saying something first. “We respect German competition law and are committed to running our business in full compliance with all German laws and regulations. We will use this case as an opportunity to review our internal commercial processes and ensure that we are in full compliance with German law.”

To my mind, there is one simple way the user can bypass the hefty price tag attached to the MS Office suite (and thus bypass any illegal practices the developer and retailer are involved with) – just use OpenOffice.

It must be said that this is not the first time that Microsoft hemorrhages money after a court decides to award monetary compensation to the other side - the Uniloc lawsuit ended with the court deciding that Microsoft must pay $388 million (details here).

Tags: Microsoft, Germany, Bundeskartellamt, MS Office
About the author: George Norman
George is a news editor.
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