Criticism of Microsoft

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Criticism of Microsoft has followed various aspects of its products and business practices. Issues with ease of use, stability, and security of the company's software are common targets for critics. More recently, Trojan horses and other exploits have plagued numerous users due to faults in the security of Microsoft Windows and other programs. Microsoft is also accused of locking vendors and consumers into their products, and of not following and complying with existing standards in its software.^[1] Total cost of ownership comparisons of Linux as well as Mac OS X to Windows are a continuous point of debate.

The company has been in numerous lawsuits by several governments and other companies for unlawful monopolistic practices. In 2004, the European Union found Microsoft guilty in the highly publicized European Union Microsoft competition case. Additionally, Microsoft's EULA for some of its programs is often criticized as being too restrictive as well as being against open source software.

Contents 1 Product criticism 2 Business practices 2.1 Vendor lock-in 2.2 Copyright enforcement 2.3 Licensing agreements 2.4 Acquisitions 2.5 Market power 2.5.1 Government anti-trust suits 2.5.1.1 February 2008 EU Fine 2.5.2 Other suits and rulings by governments 2.5.3 Suits by private companies 2.5.4 Microsoft's investigations and suits of other entities 2.6 Labor practices 2.7 Advertising and public relations 2.8 Censorship in mainland China 2.9 Worker productivity software 3 See also 4 References 5 Footnotes 6 External links 6.1 Related media

[edit] Product criticism

• For criticism of Windows Vista, see Criticism of Windows Vista
• For criticism of Windows XP, see Criticism of Windows XP
• For criticism of Windows 2000, see the criticism section of that article
• For criticism of Windows Me, see the criticism section of that article
• For criticism of Windows 9x, see the criticism section of that article
• For criticism of Microsoft Office, see the criticism section of that article

[edit] Business practices

[edit] Vendor lock-in

From its inception, Microsoft defined itself as a platform company and understood the importance of attracting third-party programmers. It did so by providing development tools, training, access to proprietary APIs in early versions, and partner programs. The solutions and plugins built by third-party programmers in turn led to more Microsoft sales. Although the resulting ubiquity of Microsoft software allows a user to benefit from network effects, critics decry what they consider to be an "embrace, extend and extinguish" strategy by Microsoft of adding proprietary features to open standards, thereby using its market dominance to gain de facto ownership of standards "extended" in this way.^[2][3][4][5] For example, the large installation base of Microsoft Word makes Word files the de facto standard word-processor format. In addition, more potential employees have training in Microsoft Office than on competing products. Hence using Office can result in reduced training requirements, especially in the case of temporary employment. However, the file formats of Word and other programs were not an open standard, and even the introduction of the Ecma International standardized Office Open XML format is sometimes criticized as not being as open as the OpenDocument format.

Microsoft software is also presented as a "safe" choice for IT managers purchasing software systems. In an internal memo for senior management Microsoft's head of C++ development, Aaron Contorer, stated:

The Windows API is so broad, so deep, and so functional that most Independent Software Vendors would be crazy not to use it. And it is so deeply embedded in the source code of many Windows apps that there is a huge switching cost to using a different operating system instead... It is this switching cost that has given the customers the patience to stick with Windows through all our mistakes, our buggy drivers, our high TCO (total cost of ownership), our lack of a sexy vision at times, and many other difficulties [...] Customers constantly evaluate other desktop platforms, [but] it would be so much work to move over that they hope we just improve Windows rather than force them to move. In short, without this exclusive franchise called the Windows API, we would have been dead a long time ago.^[6]

[edit] Copyright enforcement

One of the earliest criticisms of Microsoft stemmed from its decision to market its software independently of the hardware it ran on by asserting copyright to the software and licensing it under terms similar to music. Software copyright was a legal novelty at the time, and controversial. When Microsoft discovered that its first product, Altair BASIC, was subject to widespread illegal copying, Microsoft founder Bill Gates wrote an Open Letter to Hobbyists that openly accused many hobbyists of stealing software. Gates's letter provoked many responses, with some hobbyists objecting to the broad accusation, and others supporting the principle of compensation.^[7] This disagreement over whether software should be proprietary continues into the present day under the banner of the free software movement, with Microsoft characterizing open-source software as being "potentially viral"^[8] and the GNU General Public License itself as a "viral license" which "infects" proprietary software and forces its developer to have to release proprietary source to the public.^[9]

The Halloween documents, internal Microsoft memos which were leaked to the open source community beginning in 1998, indicate that some Microsoft employees perceive open source software — in particular, freely available Linux kernel-based operating systems — as a growing long-term threat to Microsoft's position in the software industry. The Halloween documents acknowledged that parts of Linux are superior to the versions of Microsoft Windows available at the time, and outlined a strategy of "de-commoditize[ing] protocols & applications."^{[10][2][3][4][5]} Microsoft stated in its 2006 Annual Report that it was a defendant in at least 35 patent infringement lawsuits. ^[11] The company's litigation expenses for April 2004 through March 2007 exceed $4.3 billion: over $4 billion in payouts, plus $300 million in legal fees.^[12]

Another concern of critics is that Microsoft may be using the distribution of shared source software to harvest names of developers who have been exposed to Microsoft code, as some believe that these developers could someday be the target of lawsuits if they were ever to participate in the development of competing products. This issue is addressed in published papers from several organizations including the American Bar Association and the Open Source Initiative.^[13][14]

Starting in the 1990s, Microsoft was accused of maintaining "hidden" or "secret" APIs: interfaces to its operating system software that it deliberately keeps undocumented to gain a competitive advantage in its application software products.^[15] Microsoft employees have consistently denied this;^[16][17] they claim that application developers inside and outside Microsoft routinely reverse-engineered DOS and 16-bit versions of Windows without any inside help, creating legacy support problems that far exceeded any alleged benefit to Microsoft.^[18][19][20] In response to court orders, Microsoft has published interfaces between components of its operating system software, including components like Internet Explorer, Active Directory, and Windows Media that sell as part of Windows but compete with application software.

[edit] Licensing agreements

A common complaint comes from those who want to purchase a computer without a copy of Windows pre-installed because they intend to use another operating system such as Linux or BSD instead. With the exceptions of Apple Inc., Toshiba and Dell, all large computer vendors in the United States, and most in other countries, bundle Microsoft Windows with their personal computers. The Findings of Fact in the United States Microsoft antitrust case established that "One of the ways Microsoft combats piracy is by advising OEMs that they will be charged a higher price for Windows unless they drastically limit the number of PCs that they sell without an operating system pre-installed. In 1998, all major OEMs agreed to this restriction."^[21] This has been called the "Windows tax" or "Microsoft tax".^{[22][23][24][25]}

The 2002 settlement in the United States Microsoft antitrust case prohibits Microsoft from giving special prices to select vendors, which resulted in the price list becoming public and based on volume sold with discounts for features from the distributor. These features can include the provisioning of components as specified by Microsoft, such as FireWire, or the placement of Microsoft logos on the computer as a sticker. Market development funds such as these are a source of controversy with both Microsoft and Intel, as while they can be used to cover the cost of adding new features to the system they can also bias PC OEMs towards Microsoft/Intel products.

This problem can be avoided by purchasing a computer without Windows or by buying a white box machine. Finding such a system from a major OEM may prove challenging however; while some vendors, such as IBM and HP, have recently started to sell certain models bundled with Linux, these are primarily high-end workstations or enterprise systems. Dell is currently the only major OEM in the United States selling Linux preinstalled on home systems, however it is only offered on a limited number of models and configurations and Dell also explicitly warns prospective buyers that "The main thing to note is that when you choose open source you don’t get a Windows operating system."^[26]. Some smaller OEMs such as system76 have taken advantage of the paucity of non-Windows offerings by major OEMs by specializing in Linux-based systems. Often, servers are sold without any operating system at all. In various countries, high-street retail chains (such as Dick Smith Electronics) have also been known to offer machines bundled with Linux. In some cases the user can return Windows for a refund by refusing to agree to the Microsoft End User License Agreement that Microsoft requires its users to accept before allowing the use of several products. The EULA specifically mentions that if you do not agree to the license you can return the product for a full refund. Vendors often have a policy of including charges for providing a refund such that the refund received by customers is $10^[27], despite being a violation of consumer protection law in many countries^[28][29].

[edit] Acquisitions

Microsoft has acquired several companies and products during its history, including some that competed with earlier Microsoft products.^[30] Such acquired assets include MS-DOS, Microsoft FrontPage, WebTV (now MSN TV), Hotmail, Direct3D, Internet Explorer, Microsoft Visio, and Windows Defender. Microsoft rebrands the primary products of the companies it acquires, and in many cases offers them for free or bundles them with their operating system. This has led to a criticism that Microsoft misrepresents the products as its own creations. For example, former Sun Microsystems chief executive Scott McNealy occasionally remarked that Microsoft never produced technology except by buying it: "Name one thing they've ever invented on their own? Seriously, name one! If you think of any, send me an e-mail, and I'll research it to find out who they bought it from.... R&D [research and development] and M&A [mergers and acquisitions] are the same thing over there."^[31]

An acquisition nearly took place in 1995 when Microsoft announced its intent to conduct a hostile takeover of Intuit, Inc., the maker of Quicken, which competed with its own product Microsoft Money. After a campaign by attorney Gary Reback and complaints to the Federal Trade Commission, Microsoft eventually dropped the takeover plans.^[32]

[edit] Market power

There is little argument that in most mass-market desktop software application markets, Microsoft is a dominant player. However, this dominance has attracted widespread resentment, which is not necessarily restricted to the company's competitors. In a 2003 publication, Dan Geer argued the prevalence of Microsoft products has resulted in a monoculture which is dangerously easy for viruses to exploit.^[33] However, numerous defences have been waged against this argument, including the idea that if machines can be patched from the threats it has much less of an effect.^[34]

[edit] Government anti-trust suits

Main articles: European Union Microsoft competition case and United States Microsoft antitrust case

In the 1990s, Microsoft adopted exclusionary licensing under which PC manufacturers were required to pay for an MS-DOS license even when the system shipped with an alternative operating system. Critics allege that it also used predatory tactics to price its competitors out of the market and that Microsoft erected technical barriers to make it appear that competing products did not work on its operating system^[35]. In a consent decree issued on July 15, 1994, Microsoft agreed to a deal in which, among other things, that the company would not make the sale of its operating systems conditional on the purchase of any other Microsoft product. A Microsoft purchase of Intuit was also scuttled in 1994 due to antitrust concerns that Microsoft would be purchasing a major competitor.^[36]

After bundling the Internet Explorer web browser into its Windows operating system in the late 1990s (without requiring a separate purchase) and acquiring a dominant share in the web browser market, the antitrust case United States v. Microsoft was brought against the company. In a series of rulings by judge Thomas Penfield Jackson, the company was found to have violated its earlier consent decree and abused its monopoly in the desktop operating systems market. The "findings of fact" during the antitrust case established that Microsoft has a monopoly in the PC desktop operating systems market:

Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows. (III.34)^[37]

The findings of fact goes on to explain the nature of the "barrier to entry":

The fact that there is a multitude of people using Windows makes the product more attractive to consumers. The large installed base… impels ISVs (independent software vendors) to write applications first and foremost to Windows, thereby ensuring a large body of applications from which consumers can choose. The large body of applications thus reinforces demand for Windows, augmenting Microsoft's dominant position and thereby perpetuating ISV incentives to write applications principally for Windows… The small or non-existent market share of an aspiring competitor makes it prohibitively expensive for the aspirant to develop its PC operating system into an acceptable substitute for Windows. (III.39–40)^[37]

The proposed remedy (dividing Microsoft into two companies) was overturned on appeal. While new penalties were under consideration, the Clinton administration ended and the Bush administration took office. The new administration announced that in the interest of ending the case as quickly as possible, it would no longer seek to break the company up, and that it would stop investigating claims of illegal tying of products.^[38] Five days later, terrorists attacked the Pentagon and World Trade center. Eighteen days later, Judge Kollar-Kotelly ordered the justice department and Microsoft to "engage in discussions seven days a week, 24 hours a day."^[39] The judge cited the events of September 11, 2001 in her direction to begin settlement talks but did not explain the linkage between the two.^[40][41][42] Attorney General Ashcroft, however, denied that the events of September 11 had any effect on the outcome.^[43] Microsoft subsequently reached a settlement with the Department of Justice (DOJ) and some of the states which brought suit against it. Several class-action lawsuits filed after the conviction are still pending.

In early 2002, Microsoft proposed to settle the private lawsuits by donating $1 billion USD in money, software, services, and training, including Windows licenses and refurbished PCs, to about 12,500 underprivileged public schools. This was seen by some as a potential windfall for Microsoft, not only in educating schoolchildren on Microsoft solutions but also in collecting additional license fees if the schools ever wanted to upgrade. After protests from Apple Inc. (at the time Apple Computer, Inc.), which feared further loss of its educational market share, a federal judge rejected the proposed settlement.^[44]

In 2003–2004, the European Commission investigated the bundling of Windows Media Player into Windows, a practice which rivals complained was destroying the market for their own products. Negotiations between Microsoft and the Commission broke down in March 2004, and the company was subsequently handed down a record fine of €497 million ($666 million) for its breaches of EU competition law. Separate investigations into alleged abuses of the server market were also ongoing at the same time. On December 22, 2004, the European Court decided that the measures imposed on Microsoft by the European Commission would not be delayed, as was requested by Microsoft while waiting for the appeal. Microsoft has since paid a €497 million fine, shipped versions of Windows without Windows Media Player, and licensed many of the protocols used in its products to developers in countries within the European Economic Area. However, the European Commission has charactized the much delayed protocol licensing as unreasonable, called Microsoft "non-compliant" and still violating antitrust law in 2007, and said that its RAND terms were above market prices; in addition, they said software patents covering the code "lack significant innovation", which Microsoft and the EC had agreed would determine licensing fees.^[45] Microsoft responded by saying, that other government agencies had found "considerable innovation".^[46][47] Microsoft appealed the facts and ruling to the European Court Of First Instance with hearings in September 2006,

In September 17 2007, the European Communities' Court Of First Instance,^[48] rejected Microsoft's appeal.

The court affirmed the original contested finding^[49] ;

21 In the contested decision, the Commission finds that Microsoft infringed Article 82 EC and Article 54 of the Agreement on the European Economic Area (EEA) by twice abusing a dominant position.
22 The Commission first identifies three separate worldwide product markets and considers that Microsoft had a dominant position on two of them. It then finds that Microsoft had engaged in two kinds of abusive conduct. As a result it imposes a fine and a number of remedies on Microsoft.

All elements of Microsoft's appeal were dismissed.^[50]

Microsoft accepted the judgment of the Court of First Instance and proceeded to make available interoperability information as originally required by the European Commission.

Microsoft also faced competition law in South Korea and was fined $32 million in December 2005 and ordered to unbundle instant messaging, Windows Media Player and Windows Media Service, or let competitors' products take their place.^[51] Microsoft noted in their October 2005 SEC filing that they may have to pull out of South Korea, although they later denied fulfilling such a plan.^[52] Microsoft's 2006 appeal was struck down; they have another appeal pending.

European antitrust regulators in 2008-02-27 fined Microsoft $1.3 billion for failing to comply with a 2004 judgment, that the company had abused its market dominance. The new fine by the European Commission was the largest it has ever imposed on an individual company, and brings the total in fines imposed on Microsoft to about $US 2.5 billion, at current exchange rates. Microsoft had previously been fined after the commission determined in 2004 that the company had abused the dominance of its Windows operating system to gain unfair market advantage. The commission imposing the new fine said, that it was because the company had not met the prescribed remedies after the earlier judgment.^[53]

[edit] February 2008 EU Fine

This section does not cite any references or sources. (April 2008) Please help improve this section by adding citations to reliable sources. Unverifiable material may be challenged and removed.

On February 27th, 2008 the European Union (EU) competitions commission has announced its decision to fine the Microsoft Corporation €899 million (US$1.35 billion), approximately 1/10th of the company's net yearly earnings, for failing to comply with the 2004 antitrust order. It is the highest ever fine charged by the EU (also being the largest fine of its kind ever imposed upon a company), and the first time that the EU has fined a company because of non-compliance with an antitrust decision.

The first decision in this antitrust case was given in 2004 citing that Microsoft withheld needed interoperability information from rival software companies which prevented them from making software compatible with Windows. The commission ordered Microsoft to provide this information. Microsoft agreed to this, providing the information for royalty fees of 6.5% of the licensee's revenues for the product on grounds of innovation (specifically, 3.87% for the patent license and of 2.98% for the information license). The EU found these royalty fees unreasonable and Microsoft was ordered to lower them. Microsoft complied with this, adjusting the royalty rates to 1.2% (changing the rates for the licenses to 0.7% and 0.5%, respectively) in the European Union, while keeping the rate the same for the rest of the world. The EU still saw this as an unreasonable rate, and Microsoft, two month after lowering the rates, reduced the rates yet again to a flat rate of €10000 or a royalty of 0.4% applicable worldwide. Microsoft's royalty rates, which were deemed unreasonable for the period of 15 months between June 21, 2006 and October 21, 2007 are the cause for the fine. So far, the EU has fined Microsoft €1.68 billion in 3 separate fines in this case. This fine will go towards the European Union annual budget.

The European Anti-trust commissioner Neelie Kroes stated that the fine was "reasonable and proportionate," as the figure could have gone up as high as €1.5 billion, the maximum that the EU commission can impose. She also said that it should act as "a signal to the outside world, and especially Microsoft, that they should stick to the rules" and that "Talk is cheap. Flouting the rules is expensive." Although she also expressed hope that "today's decision closes a dark chapter in Microsoft's record of non-compliance with the Commission."

There is no certainty whether Microsoft will appeal this decision, a Microsoft Spokesperson has stated that Microsoft will review this latest fine, citing that "The commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about the past issues that have been resolved." Microsoft's General Counsel Brad Smith commented "It's clearly very important to us as a company that we comply with our obligations under European law. We'll study this decision carefully, and if there are additional steps that we need to take in order to comply with it, we will take them." Microsoft had appealed to fines by the EU before, but all the charges were defeated. If Microsoft does not appeal the decision, the company will have 3 months (starting February 27th) to pay the fine in full.

The decisions came after Microsoft announced they were disclosing 30,000 pages of previously secret software code last Thursday (February 21st). The EU competition commissioner's commented that this move "does not necessarily equal a change in business practice."

[edit] Other suits and rulings by governments

In March 2004, during a consumer class-action lawsuit in Minnesota, internal documents subpoenaed from Microsoft revealed that the company had violated nondisclosure agreements seven years earlier in obtaining business plans from Go Corporation, using them to develop and announce a competing product named PenWindows, and convincing Intel to reduce its investment in Go. After Go was purchased by AT&T and Go's tablet-based computing efforts were shelved, PenWindows development was dropped.^[54]

In May 2004, a class-action lawsuit accused Microsoft of overcharging customers in the state of California. The company settled the case for $1.1 billion, and a California court ordered Microsoft to pay an additional $258 million in legal fees (including over $3,000 per hour for the lead attorney in the case, more than $2,000 per hour for colleagues, and in excess of $1,000 per hour for administrative work). A Microsoft attorney responded, "Somebody ends up paying for this. These large fee awards get passed on to consumers."^[55] The total bill for legal fees was later reduced to just over $112 million.^[56] Because of the structure of the settlement, the law firm which sued Microsoft could end up getting more money from the company than California consumers and schools, the beneficiaries of the settlement.

[edit] Suits by private companies

See also: Alcatel-Lucent v. Microsoft

Microsoft has also fought numerous legal battles against private companies. The most prominent ones are against:

• Alcatel-Lucent, which won US$1.52 billion in a lawsuit which alleged that Microsoft had infringed its patents on playback of audio files. This ruling was overturned in a higher court^[57]
• Apple Inc. (known as Apple Computer, Inc. at the time), which accused Microsoft in the late 1980s of copying the "look and feel" of the graphical user interface of Apple's operating systems. The courts ruled in favor of Microsoft in 1994. Another suit by Apple accused Microsoft, along with Intel and the San Francisco Canyon Company, in 1995 of knowingly stealing several thousand lines of QuickTime source code in an effort to improve the performance of Video for Windows.^{[58][59][60][61]} After a threat to withdraw support for Office for Mac,^[62][63] this lawsuit was ultimately settled in 1997. Apple agreed to make Internet Explorer the default browser over Netscape, and Microsoft agreed to continue developing Office and other software for the Mac for the next 5 years, purchase $150 million of non-voting Apple stock, and made a quiet payoff estimated to be in the US$500 million-$2 billion range.^{[64][65][66][67]}
• AOL, on behalf of its Netscape division. Netscape (as an independent company) also was involved in the United States v. Microsoft antitrust suit.
• Be Inc., which accused Microsoft of exclusionary and anticompetitive behavior intended to drive Be out of the market. Be even offered to license its BeOS operating system for free to any PC vendors who would ship it pre-installed, but the vendors declined due to what Be believes were fears of pricing retaliation from Microsoft: by raising the price of Microsoft Windows for one particular PC vendor, Microsoft could price that vendor's PCs out of the market.^[68]
• Burst.com, which claims that Microsoft stole Burst's patented technology for delivering high speed streaming sound and video content on the internet. Also at issue in the case is a 35-week period of missing emails in the evidence Microsoft handed over to Burst which was discovered by Burst.com's lawyers. Burst accuses Microsoft of crafting a 30 day email deletion policy specifically to cover up illegal activity. Microsoft settled with the company for $60 million in exchange for an agreement to license some of the company's technologies.^[69][70][71]
• Eolas and University of California, which accused Microsoft of using some of its software patents in their web browser, won $521 million in court.^[72]
• Caldera, which accused Microsoft of having modified Windows 3.1 so that it would not run on DR DOS 6 although there was no technical reason for it not to work.^[73] Some claim that Microsoft put encrypted code in five otherwise unrelated Microsoft programs in order to prevent the functioning of DR DOS in pre-releases (beta versions) of Windows 3.1.^[74] Microsoft settled out-of-court for an undisclosed sum.
• Opera, which accused Microsoft of intentionally making its MSN service incompatible with the Opera browser on several occasions.
• Sendo, which accused Microsoft of terminating their partnership so it could steal Sendo's technology to use in Windows Smartphone 2002.^[75]
• Spyglass, which licensed its browser to Microsoft in return for a percentage of each sale; Microsoft turned the browser into Internet Explorer and bundled it with Windows, giving it away to gain market share but effectively destroying any chance of Spyglass making money from the deal they had signed with Microsoft; Spyglass sued for deception and won a $8 million settlement.^[76]
• Stac Electronics, which accused Microsoft of stealing its data compression code and using it in MS-DOS 6.^[77] Microsoft eventually lost the subsequent lawsuit and was ordered by a federal court to pay roughly $120 million in compensation.^[78]
• Sun Microsystems, which held Microsoft in violation of contract for including a modified version of Java in Microsoft Windows that provided Microsoft proprietary extensions to the standard Java language; Microsoft lost this decision in court and were forced to stop shipping their proprietary Java Virtual Machine. Since then, they have failed to provide a compliant JVM, so users have had to download one from the Internet onto new Windows installations.
• WordPerfect
• Many other smaller companies have filed patent abuse and predatory practice suits against Microsoft.

[edit] Microsoft's investigations and suits of other entities

In 2006 Microsoft initiated an investigation of Lithuanian government institutions for determining whether they choose long-term strategies of the software they use correctly. The investigation, funded by Microsoft itself, will be performed by the Vilnius University together with the Lithuanian Institution of the Free Market, a think tank organization. The investigation was initialised after the government started to prepare 860 thousand litas project to encourage the use of open-source software. The vice-president of Microsoft, Vahe Torossian, stated that "the government shouldn't be technologically subjectivist"^[79]

[edit] Labor practices

While Microsoft has historically treated employees very well, Microsoft has received several complaints about their treatment of employees. This includes the use of permatemp employees (employees employed for years as "temporary," and therefore without medical benefits), use of forced retention tactics, where departing employees would be sued to prevent departure, as well as more traditional cost-saving measures, ranging from cutting medical benefits, to not providing towels in company locker rooms.^[80]

Historically, Microsoft has also been accused of overworking employees, in many cases, leading to burnout within just a few years of joining the company. The company is often referred to as a "Velvet Sweatshop", a term which originated in a Seattle Times article in 1989,^[81] and later became used to describe the company by some of Microsoft's own employees.^[82] The focus of the idea is that Microsoft provides nearly everything for its employees in a convenient place, but in turn overworks them to a point where it would be bad for their (possibly long-term) health. For example, the kitchenettes have free beverages and many buildings include exercise rooms and showers. However, the accusation is that they try to keep employees at the company for unreasonably long hours and working too much. This is detailed in several books about Microsoft, including "Hard Drive: Bill Gates and the Making of the Microsoft Empire."

A (US) state lawsuit was brought against Microsoft in 1992 representing 8,558 current and former employees that had been classified as "temporary" and "freelance", and became known as "Vizcaino v. Microsoft". In 1993, the suit became a US Federal Class Action in the United States District Court Western District Of Washington At Seattle as No. C93-178C. The Final Settlement^[83] came in 2005. The case was decided on the (IRS-defined) basis that such "permatemps" had their jobs defined by Microsoft, worked alongside regular employees doing the same work, and worked for long terms. After a series of court setbacks including 3 reversals on appeal, Microsoft settled the suit for about US $92.730 million.

A side effect of the "permatemp" lawsuit is that now contract employees are prevented from participating in team morale events and other activities that could be construed as making them "employees". They are also limited to one year contracts and must leave after that time for 100 days before returning under contract.

Microsoft is the largest American corporate user of H-1B guest worker visas and has joined other other large technology companies like Google, recently lobbied for looser H1-B visa restrictions.^[84][85][86]

[edit] Advertising and public relations

Microsoft contributes money to several think tanks, including the American Enterprise Institute, the Center for Strategic and International Studies, the Heritage Foundation, the Cato Institute and the Alexis de Tocqueville Institution. Critics allege that while giving the appearance of neutral third parties these organizations work to undermine Microsoft's competitors, for example stating "open-source software may offer [a] target for terrorists".^[87][88][89]

In August 2004, the Advertising Standards Authority (ASA) of the United Kingdom ordered Microsoft to stop a run of print ads that claimed that the total cost of ownership of Linux servers was ten times that of Windows Server 2003. The comparison included the cost of hardware, and put Linux at a disadvantage by installing it on more expensive but poorer-performing hardware compared to that used for Windows.^[90][91]

On January 24, 2007, Rick Jelliffe revealed on his blog that a Microsoft employee offered to pay him to make corrections in Wikipedia articles concerning Office Open XML. Microsoft spokesperson Catherine Brooker expressed the belief that the article had been "heavily written" by IBM employees who supported the rival OpenDocument format, though she provided no specific evidence. Internet entrepreneur Jimmy Wales described Microsoft's offer as unethical.^[92]

[edit] Censorship in mainland China

Microsoft (along with Google, Yahoo, Cisco, AOL, Skype, and other companies) has cooperated with the Chinese government in implementing a system of Internet censorship.^[93] Human rights advocates such as Human Rights Watch and media groups such as Reporters Without Borders criticized the companies, noting for example that it is "ironic that companies whose existence depends on freedom of information and expression have taken on the role of censor."^[94]

[edit] Worker productivity software

Microsoft has also come under criticism for developing software capable of analyzing the output of remote sensors in order to measure the competence and productivity of workers based on their physical responses.^[95]

[edit] See also

• Comparison of Windows and Linux
• Studies related to Microsoft

General mechanisms at work:

• Path dependence
• Embrace, extend and extinguish
• Network effect
• Vendor lock-in
• Appeal to fear
• Fear, uncertainty and doubt
• Open source vs. closed source
• Marketing ethics

Specific cases:

• Digital rights management
• NSAKEY
• DLL hell

[edit] References

• Charles, John. "Indecent proposal? Doing Business With Microsoft". IEEE Software. January/February 1998. pp. 113-117.
• Clark, Jim with Owen Edwards. Netscape Time: The Making of the Billion Dollar Start-up That Took on Microsoft. New York, Saint Martin's Press, 1999
• Cusumano, Michael A.; Selby, Richard W. Microsoft Secrets: How the World's Most Powerful Software Company Creates Technology, Shapes Markets and Manages People. New York: Free Press, 1995.
• Edstrom, Jennifer; Eller, Marlin. Barbarians Led by Bill Gates: Microsoft from inside: How the World's Richest Corporation Wields its Power. N.Y. Holt, 1998.
• Goldman Rohm, Wendy (September 1998). The Microsoft File: the secret case against Bill Gates. New York, NY 10022: Times Books. ISBN 0-8129-2716-8. 
• Lemos, Robert. (2003). U.S. funds study of tech monocultures. Retrieved December 20, 2003, from http://news.com.com/2100-7355-5111905.html?tag=nefd_hed
• Moody, Fred. I Sing the Body Electronic: A Year With Microsoft on the Multimedia Frontier. New York: Viking, 1995.
• National Science Foundation. (2003). Taking Cues from Mother Nature to Foil Cyber Attacks. Retrieved December 20, 2003, from http://www.nsf.gov/od/lpa/news/03/pr03130.htm
• Bozman, Jean; Gillen, Al; Kolodgy, Charles; Kusnetzky, Dan; Perry, Randy; & Shiang, David (October 2002). "Windows 2000 Versus Linux in Enterprise Computing: An assessment of business value for selected workloads". IDC, sponsored by Microsoft Corporation. White paper.
• In an article published by BusinessWeek, Dan Kunsnetzky suggests that study was stacked against Linux.
• Groklaw portal on Microsoft litigation Microsoft Litigation * Matthew Newman "Microsoft Fined Record EU899 Million by EU Regulator (Update1)". Bloomberg, February 27, 2008
• "EU says could have fined Microsoft up to 1.5 bln eur over antitrust decision". CNNMoney, February 27, 2008
• "Microsoft fined 899 mln eur by EU for failure to comply with ruling UPDATE". CNNMoney, February 27, 2008
• Reporting by David Lawsky; Editing by Dale Hudson "EU fines Microsoft record $1.35 billion". Reuters, February 27, 2008
• "EU fines Microsoft record $1.3 billion". CNNMoney, February 27, 2008
• Parmy Olson "Q&A: Microsoft's Multi-Billion Dollar EU Fine". Forbes.com, February 27, 2008
• Leo Cendrowicz "EC fines Microsoft a record $1.4 bil". The Hollywood Reporter, February 27, 2008
• Mike Ricciut "EU slaps Microsoft with $1.35 billion fine". CNet News, February 27, 2008
• "Microsoft fined 899 mln eur by EU for failure to comply with ruling UPDATE". CNNMoney, February 27, 2008
• Rory Watson "Microsoft hit by €899m fine for failure to comply with EU ruling". Times, February 27, 2008
• "EU hits Microsoft with record 899 million euro anti-trust fine". AFP, February 27, 2008
• Benjamin J. Romano "In the bad timing category: EU fine rains on Microsoft launch parade". The Seattle Times, February 27, 2008
• Aoife white "Record EU Fine for Microsoft". The Associated Press, February 27, 2008
• Stephen Castle "EU fine sends message to Microsoft and others". International Herald Tribune, February 27, 2008
• Damon Poeter "EU Slams Microsoft With Record $1.35 Billion Fine". Channelweb Network, February 27, 2008
• Ina Fried "Ballmer on EU, Yahoo". CNet News, February 27, 2008
• David Prosser "Microsoft fined record €899m by EU over market abuse". The Independent, February 28, 2008

[edit] Footnotes

[edit] External links

Discussions of Microsoft's business practices:

• Microsoft's Sacred Cash Cow (Seattle Weekly)
• CNN.com - Microsoft: Flaw left millions at risk (Flaw Discovered by Faisal Danka)
• Radsoft.com news and information
• http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm
• Dissecting Microsoft - Analyzes Microsoft's business practices and software
• "The Microsoft Tax" - by The Linux Information Project (LINFO)
• FAQ on the Microsoft Antitrust case by The Center for the Advancement of Capitalism
• Sourcewatch about Microsoft
• Novell/SuSE Response to Steve Ballmer's Letter to the Linux Community

TCO:

• Windows 2000 Versus Linux in Enterprise Computing (Microsoft)
• Study: Linux Is Still Cheaper Than Windows (PCworld.com)

Tax evasion:

• Tax evasion by Microsoft in India

[edit] Related media

• Gartner: Windows collapsing under own weight

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