Microsoft revenue as tax income

[Roberto Di Cosmo <Roberto.Di.Cosmo@ens.fr>]

  I am quite pleased to see the idea of Microsoft revenues as tax income
  in this mailing list: I thought that this was only of concern to non-US
  citizens like europeans (at least superficially), but I am pretty happy
  to be wrong.
  
  Let me report some Microsoft practices in Europe of which we have *factual*
  evidence on this side of the Atlantic sea.
  
  + Microsoft was convicted some moths ago of unfair trade practices
    consisting in selling much cheaper their software to two major VARS
    than to other VARs (note for the extreme liberalist: this practice
    is not very different from dumping... you are indirectly making the other
    VARs pay the two major ones a "tax", and as a liberalist, even if extreme,
    you should condamn such a practice). If this can be of some help out there,
    I may try to dig out the precise references.
  
  + Microsoft is pushing in the academic world a so-called "Select convention"
    agreement under which the academic institution does Microsoft's job: they
    copy, register, install any product required by a member of the institution,
    get paid the fixed "academic" fee which is ludicrously high, and send a
    periodic report with the fees to Microsoft. The institution gets *one* copy of
    the selected CD series, while the user does not receive *anything* (I mean,
    no CD, no manual, nothing else than a serial number).
    This means that the increasing returns story I read somewhere gets to its
    apex here: for a material value of a bunch of peanuts, (couple of dozens of
    CDs), you get an arbitrary amount of money.
    I do not want to discuss the fairness of this fact itself (it would lead
    us to talking about telephone companies etc. etc., general economics, political
    issues, philosophical stands, and in the end, as always, get lost in 
    sex-of-the-angel discussions of little practical interest.)
    Nevertheless, two points are undebatable: under the excuse of "academic bundle"
    we get nothing (i.e., a crippled product: with the frequency of Windows re-installations
    over here, either we pay for the ton of floppy and the lot of time needed to make a copy,
    or we are stuck, *and* no manual!) 
    Second, the personnel doing this administrative task for Microsoft's sake
    in my university is paid by to assist users, not to collect fees. The lost
    time (and money) amount to another indirect "tax". 
  
  + VARs pre-install windows stuff on all machines. It is *impossible* to get a
    machine without windows here, even if you explicitly request it. The best
    you can get is a machine where they reformatted the hard drive to get rid of
    windows, but you do not have any means not to pay for the copy of windows that
    you do not want. Go have a look on Gateway's Web server: unless something
    changed recently, you *cannot* buy from them a computer *without* MS stuff.
    I personally fighted this war here against HP, Digital, Toshiba over the
    past years, to cite a few, and not only they seemed not to understand the issue,
    but the only time a portable (an HP Omnibook) had an hardware failure, the
    extremely efficient HP service refused to repair the machine if I did not
    send in the hard disk too, then sent me back the repaired machine in 4 days
    (wonderful), with a shining copy of Windows and no trace of the Linux partition
    with a lot of lost personal data, depite a letter in french and English explicitly
    stating the system installed was *not* windows and I wanted it back as it was.
    (Yes, this is the reason I stopped updating the HP Omnibook linux page I wrote 2 years ago).
     
  [ personal opinions part starts]
  
  - The previous two points taken together explained, in my opinion, why Microsoft was
    not prosecuted under anti-trust laws in the States: I thought, Microsoft is a
    planet-wide tax company, getting money in return of no expenses on their part,
    due to the combination of this kind of practices and the  very unsound use of a notion
    (the copyright) introduced to reward little "artisans" for their hard work (the
    benefit a writer or a singer can get out of their work is quite limited by their
    being individuals who cannot "produce" that much in a lifetime. Also, when you
    buy an LP, you usually get a cassette or a CD, not the "right" to copy on a 
    media you have bought at your expenses the song you like... well... not yet). 
  
    Apart from the legal issue, I thought, of course the US do not want to kill
    an ever increasing inward-only cash flow (or tax) that foreign
    countries were so sheepishly paying: maybe one judge here or there will try to
    do something, but in the end the people wielding the real power will shut them off.
  
    Now, it has been properly pointed out in the post I am replying to, that this
    view is incomplete: there *is* a tax-like cash flow crossing the border of the US,
    but this does not directly contribute to the wealth of the nation, only to the
    wealth of a particular individual/company who can use this money to damage the
    country seriously (see the post above for details).
    Indeed, the wealth of a nation is *not* the average of the individual wealths
    (As a famous french king proved once by "putting a chicken in everyone's owen"
    in this very statistical way that the arithmetical means is pretty insignificant).
    Worse, an extremely wealthy person in an averagely not rich country can obtain
    a dangerous power that should be of general concern, because it can be used
    to damage people.
    And this is what Microsoft did: every time you loose your
    data, you reboot your machine while doing important work, you are forced to
    spend weeks fighting viruses etc., due to provenly bad technology built into
    MS systems, you should be sueing Microsoft like you would sue Ford if it
    sold you a car whose engine *by design errors* randomly locks up or incinerate
    your baggage. Do you remember when Perrier recalled millions of bottles
    from the market due to a potentially dangerous fault in a manufacturing unit?
    That was because otherwise you could have sued them. Got the point? :-)
  
    Well, if you really tell me that this kind of more appropriate point of view is
    gaining acceptance in the US, I will be positively impressed.
  
  [ personal opinions part ends]
  
  + Microsoft has established an astonishing procedure for students/teachers in
    non-ms-select institutions to get an academic bundle: you want to buy Office?
    Well, you pay in any shop the full money to get a piece of paper that you must
    fill in with personal data proving you are a student etc., *then* you send it to MS
    to get the software sent to you. This allows MS to build an impressive database of
    customer profiles with private informations (which university you subscribed to,
    name, address etc. etc.). This requires a special authorization in France, and
    I wonder how MS got it.
  
  + After mr. Gates was received with presidential apparatus by Mr. Chirac
    (the President of France), several voices in France started rumoring
    about the supposed great danger of being left behind by the cyber revolution,
    and after that, Microsoft announced more or less officially that they will be
    "donating" MS software to all french colleges to allow them to start heading
    in the "good" direction. You are talking about hundred of tousands of free
    licences given away. You are also talking about a dumping case of unprecedented
    dimensions. If this really happens, and people here in France are so blind
    not to see the real consequences, but only the "donation" masquerade, well,
    France will be the first official colony MS can put its flag on.
  
  + nontheless, there is a marginal movement for free/no-advertising information on computers
    developing right now in the form of a little publicity-free magazine
    which contains plenty of interesting information (in french) about
    unfair trade practices in the computer market here in France. While
    the magazine is not a "microsoft-bashing" thing (nobody gets out
    without scars there... :-) ), it has a lot of coverage of Microsoft.
    Unfortunately, it is in french :-(
  
  + let me end this rather long post (sorry) by saying that I would 
    sincerely like to hear the arguments of Microsoft defenders. 
    For example I want to know *what* exactly people is so happy about
    Microsoft, apart the artificially induced belief that it is
    a "great thing". I have my theories, but I would like to
    confirm them :-)
  
  --Roberto Di Cosmo
  
  ------------------------------------------------------------------
  LIENS-DMI                   E-mail: dicosmo@dmi.ens.fr
  Ecole Normale Superieure    WWW   : http://www.dmi.ens.fr/~dicosmo
  45, Rue d'Ulm               Tel   : ++33-(1)-44 32 20 40      
  75230 Paris CEDEX 05        Fax   : ++33-(1)-44 32 20 80       
  FRANCE                      MIME/NextMail accepted                                  
  ------------------------------------------------------------------
  
  
  
  
  P.S.: I have to admit that I am becoming more and more impressed by the
  overall quality of the postings in this mailing list: apart from
  a moderate number of mails that are essentially "empty" (the "I am
  better than you on this or that subject" series), I am quite 
  surprised to be keeping on reading all the messages (well, almost)...
  maybe it is because the number of competent people subscribed is
  not reduced to a negligible amount like in the "professional" press :-)