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02.01.08

Kickbacks Watch: Plaintiffs in Suit Against Microsoft Caught (Plus Past Summary)

Posted in Antitrust, Dell, Europe, Finance, Fraud, GNU/Linux, Microsoft, Windows at 4:59 am by Dr. Roy Schestowitz

For future referencing purposes, we wish to publicise the following batch of kickback stories. You never know if (and when) these will come handy as a cross-reference to have. Spotted in the news just a couple of days ago:

Kickback Case: Retired Lawyer Sentenced

The law firm, previously known as Milberg Weiss Bershad & Schulman, paid $11.3 million in kickbacks to people who became plaintiffs in class-action lawsuits against companies such as AT&T Inc., Lucent, WorldCom, Microsoft Corp. and Prudential Insurance, prosecutors said.

Here are some older stories on the subject of kickbacks (or closely-related misconduct):

1. Microsoft, Intel and Dell: The Tech Love Triangle

It is becoming well known that Microsoft have achieved their current market share status by making major computer manufacturers sign licensing deals, so as to distribute a copy of Windows with every computer sold. What many people don’t realise, is how difficult it is to get a computer from the manufacturers without Windows.

[...]

This is first-hand experience of the power of Microsoft’s monopolistic practices, and it really does annoy me. It seems not so long ago that I praised Dell for their support, but along with Microsoft, they have now lost a customer entirely.

Needless to say, we are now looking to buy a system from a local shop with no OS.

2. Investors sue Dell on payments from Intel: WSJ

An investor lawsuit seeking class-action status accuses Dell Inc. of improper accounting in its relationship with chip giant Intel, according to a media report published Thursday evening.

[...]

The suit alleges that Dell received at times as much as $1 billion a year in “secret and likely illegal” kickbacks in the form of “e-Cap” or “exception to corporate average pricing” payments” from Intel to ensure that Dell used no other chip supplier according to The Journal.

3. U.S. DOJ joins lawsuit against HP, Sun, Accenture

Suit alleges that the three companies formed an alliance with vendors and have been giving each other kickbacks on government contracts since the late 1990s.

4. Lenovo got financial help from Intel, claim

Journalists on the title said Lenovo is being paid a “pretty penny” from Intel to use its chips.

5. At Dell, Windows XP Home is $19 less than worthless

Latitude D520N Duo (with FreeDOS): $984

Latitude D520 Dual Core (with Windows XP Home Edition SP2): $965

6. Microsoft Shuts Down Linux 10 Years Ago Says Iowa Attorney

Going back now to as early as 1998, Microsoft starts to realize that Linux might pose a possible threat, and Vinod Valloppillil, who is a program manager at Microsoft, is asked by Mr. Allchin, Jim Allchin, to analyze potential strategies for combatting open-source software, and specifically Linux.
His memos are leaked to the press in April — I beg your pardon — in October of 1998 and become known as the Halloween documents. And the evidence will be that Microsoft uses its influence in the OEM channel, the computer manufacture channel, to make sure that end users have a difficult time buying PCs with Linux preinstalled.

7. Microsoft’s Dirty OEM-Secret

They are, in short the secret to Microsoft’s success. And the word secret is to be taken quite literally: No OEM may talk about the contents of his contract, or he will lose his license, and (assumption) likely be sued for breach of contract as well.

8. Did Microsoft want to ‘whack’ Dell over its Linux dealings?

9. Dell’s secret Linux fling [sabotaged by Microsoft]

10. Microsoft ‘killed Dell Linux’ – States

11. Ecuador Tax Agency Closes Microsoft Branch Offices For 7 Days

“We have twice requested balances, payment reports and complete tax information, but the company hasn’t given it to us, so in accordance with our laws we have proceeded with the closure,” the SRI official in charge of the proceeding said.

12. Microsoft Office raid in Hungary

“Such behavior could lead to the exclusion of competitive products from the market and violate European Union rules, according to the authority known as the GVH.”

13. [Larry Lessig:] Required Reading: the next 10 years

Yet governments continue to push ahead with this idiot idea — both Britain and Japan for example are considering extending existing terms. Why?

The answer is a kind of corruption of the political process. Or better, a “corruption” of the political process. I don’t mean corruption in the simple sense of bribery. I mean “corruption” in the sense that the system is so queered by the influence of money that it can’t even get an issue as simple and clear as term extension right.

14. BBC Corrupted

Today the BBC made it official — they have been corrupted by Microsoft. With today’s launch of the iPlayer, the BBC Trust has failed in its most basic of duties and handed over to Microsoft sole control of the on-line distribution of BBC programming. From today, you will need to own a Microsoft operating system to view BBC programming on the web. This is akin to saying you must own a Sony TV set to watch BBC TV. And you must accept the Digital Restrictions Management (DRM) that the iPlayer imposes. You simply cannot be allowed to be in control of your computer according to the BBC.

Also of interest: watch this long post on OEM lock-in and another about BECTA. There is a lot of overlap there, but none of this is deliberate (we do try to cross-reference rather than repeat). Remember that Microsoft paid Novell a lot of money to serve Microsoft's interests.

Movell and Nicrosoft

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