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Microsoft and Intel in Collusion scheme? Re: Microsoft-Intel-Dell Kickbacks Loveaffair Still Alive

  • Subject: Microsoft and Intel in Collusion scheme? Re: Microsoft-Intel-Dell Kickbacks Loveaffair Still Alive
  • From: Rex Ballard <rex.ballard@xxxxxxxxx>
  • Date: Wed, 21 Nov 2007 08:01:06 -0800 (PST)
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On Nov 20, 6:56 am, Roy Schestowitz <newsgro...@xxxxxxxxxxxxxxx>
> Microsoft, Intel and Dell: The Tech Love Triangle
> ,----[ Quote ]
> | 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.
> | [...]

Also in that article
| Dad explained that he wanted an OS-free system with a Core 2 Duo
| He was told that this wasn't possible due to a licensing agreement
with Intel
| that requires a copy of Windows to be bundled with a Core 2 CPU.

If true, this would be a clear violation of the Clayton Act and would
be collusion.
It would also imply that the Intel chips should be boycotted by
corporate as well as
individual customers seeking to have Linux machines.

Several companies have bundled a complementary copy of Linux with
their motherboards,
including boards shipped to major OEMs such as Dell, HP, and IBM.
Most of the time,
the result was only that the OEMs didn't even ship the Linux
installation media with the
completed hardware.  Corel even offered bundled Linux for as little as
50 cents per board,
making it almost "free" to the OEMs, only to have the CDs end up in
the shredder.

A contract that mandated that the OEM install Linux with the
motherboard would be an
illegal contract, since it would have the effect of illegally
excluding Microsoft Windows
from that OEM's distribution channel.  The fact that Microsoft has a
deal with Intel that
then allows/forces Intel to force OEMs to offer only Windows would be
an illegal contract
in which both Intel and Microsoft would have conspired to exclude
competitors such as
Ubuntu, SUSE, and other Linux distributions, as well as OS/X and
Solaris and any other
commercial versions of Unix.

Sounds like it's time for the states attorney's general to start going
after deep pockets of
Intel, and perhaps Dell for the Clayton Act violations.

> |
> | This is first-hand experience of the power of Microsoft's monopolistic
> | practices, and it really does annoy me.

Some of the other comments made by the telephone operator answering
the call, indicate
that he was stating personal opinion rather than Dell corporate
policy.  The problem is that
Dell has different organizations that support Linux customers compared
to those that support
Windows customers.  If you call the toll-free number to order a Dell
over the phone, you end up
routed to a team which has ONLY been trained to sell Windows systems.
They probably don't
know anything about Linux.  They probably don't know anything about
how to configure a Linux system.

Even when I ordered my Z61p from Lennovo, I asked if the A/B/G/N card
would work with Linux and
I was told that it would.  It turned out that the card, based on
Atheros chips, is not easily supported
by Linux and a later card made by Intel offers full compatibility for
the T61 series computers.

> | 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.
> `----
> http://blog.raisingwaves.com/index.php?entry=entry071120-003039
> Related:
> http://edge-op.org/iowa/www.iowaconsumercase.org/011607/2000/PX02663.pdf

It will be interesting to see how much longer that site is available
to the public.  I would love to see a "plain text" transcript version
of these documents that could be more easily parsed by search engines
and tools.  It pretty much formally documents nearly all of the claims
I have made about the nature of Microsoft's OEM contracts, including
minimum commitments, inability to make alterations to the
configuration or documentation of the system without getting
Microsoft's prior approval, giving Microsoft control over the
rewrite,   It shows that Microsoft has the right to revoke the
dealerships of any Dell Distributor who performs after-market
installations of Linux (or any other OS) or any other third party
software.  It shows that Microsoft must give prior written approval to
any use of Microsoft trademarks and logos.

This pretty much explains why Microsoft is so "Successful" and why
competitors are pretty much "starved out of existence.

> Investors sue Dell on payments from Intel: WSJ
> ,----[ Quote ]
> | 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.
> `----

> http://www.marketwatch.com/news/story/investors-sue-dell-payments-int...

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

> ,----[ Quote ]
> | Latitude D520N Duo (with FreeDOS): $984
> |
> | Latitude D520 Dual Core (with Windows XP Home Edition SP2): $965
> `----
> http://danpritchard.com/blog/2007/02/21/dell-winxphome-19-less-than-w...

As we see from the contract included in the post, there is a lot of
overhead in documenting and excluding the FreeDOS machine from
Microsoft Audits.  In addition, Dell has to pay for a minimum
commitment whether they are used or not.  So even though the FreeDOS
software is "free", there is some additional overhead - especially for
single-unit quantities.

So even if you purchase a FreeDOS or Ubuntu machine:
  1.  Microsoft gets paid anyway.
  2.  Microsoft can claim the license for the unit.
  3.  Dell has to support the end user who is installing Linux or
  4.  Dell has to properly justify NOT shipping Windows with the
FreeDOS machine.

> Microsoft Shuts Down Linux 10 Years Ago Says Iowa Attorne
> ,----[ Quote ]
> | 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.

There are indicators that Microsoft may have considered Linux a threat
as early as 1994, when Red Hat approached the OEMs offering them the
ability to install Red Hat Linux in a "Dual Boot" configuration along
with Windows for as little as $2 per copy in any quantity greater than
1000 units.

Microsoft countermeasures included redisign of plug-and-play in a
manner designed to exclude Linux and to sabotage the Linux plug-and-
play capabilities.  The key tactic was to have Microsoft assign the
PCI vendor and device codes, and mandate that those codes be protected
by nondisclosure agreements.  The tactic limited the ability of Linux
plug-and-play for almost a year until Adaptec decided that Microsoft
had breached it's contract and rather than sue Microsoft, just gave
the PCI codes it knew about to Red Hat, with no nondisclosure

Of course, in 1994, Linux was just one of several threats including OS/
2, UnixWare, SCO Unix, and Solaris for Intel.

By 1997, Microsoft had neutralized all of the other threats with the
exception of Linux.  Linux continued to grow, often as much as 400%
per year, even in the face of every legal and illegal tactic by
Microsoft to prevent it's spread.

By 1998, Microsoft had sent what in now known as the "Halloween"
memos, declaring to other Microsoft Executives, that "Linux is the
Number One Threat".

Shortly after that, Microsoft began alluding to Linux and Open Source
Software in it's SEC filings as one of it's biggest threats.  By 1999,
Microsoft was explicitly naming Linux as it's number one rival in it's
SEC filings.  In addition, Microsoft memos from top execs demanded
that Microsoft "Win at All Costs", especially against Linux.  A
company that was fully prepared ot switch to Linux could get almost
any terms it wanted for Windows.

Microsoft is acutely aware that Unix wiped out most of it's
competitors and deminished the role of even entrenched systems such as
MVS Mainframes. They knew that Linux was a direct threat because it
was available at a TCO that was lower than Microsoft's equivalent
solution (Windows, Office, Applications).  They know that even though
Linux applications weren't "as good", they were "good enough" to
severely cut into Microsoft's unit volumes and revenues.

Microsoft's tactic has been to force would-be Linux users to pay for
Windows, whether they use it or not.  Even today, Microsoft watches
the sales of Office closely, since machines sold with Windows and no
Office are very likely to be converted to Linux systems.

> | 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.

Microsoft's primary objective has been to prevent Linux from
disrupting or eroding their revenue streams.  With Vista, Microsoft
sought to "crush Linux completely" by attempting to use technology to
exclude it from the desktop completely.  New License terms, kernel
mode lock-out of Linux delivery systems such as Live-CDs, Live-DVDs,
Virtualization, and emulation were intended to force the user to
choose EITHER Windows OR Linux and not both.  Unfortunately the tactic
backfired and customers decided to stick with Windows XP instead of
ordering machines with Vista.  Microsoft, not wanting to admit the
marketing disaster offered to let OEMs "upgrade to Vista Business"
which would then permit them to ship a "downgraded" system with
Windows XP instead of Vista.  This allowed Microsoft to legally
declare all of the XP systems as Vista systems rather than have to
admit that most of the PCs being sold in the last year were sold with
Windows XP, not Vista.  It's probably a very shady and possibly even
illegal form of securities fraud, since it was intended to prevent a
drop in stock prices as Bill and Steve were dumping Microsoft stock,
sometimes at rates as high as 1 million shares per day.

> http://www.linuxelectrons.com/News/RoundUp/Microsoft_Shuts_Down_Linux...
> Microsoft's Dirty OEM-Secret
> ,----[ Quote ]
> | 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.
> `----
> http://www.kuro5hin.org/story/2001/10/23/13219/110

As we see above, Microsoft has not been able to prevent the court
ordered disclosure of OEM contracts.  Judges are now pretty
consistently ruling that Microsoft cannot use nondisclosure agreements
to obstruct justice.   Furthermore, prosecutors are now publishing the
court ordered disclosures on public web sites during the trial.
During the settlement negotiations, one of teh conditions is that
access be restricted to those with a "need to know" rather than public
domain access, so more and more people are archiving the exhibits
while they are in public domain.

In the DOJ vs Microsoft antitrust case, there were thousands of
exhibits and depositions, most of which were available to the public
during the trial, but were sealed or restricted after the trial.  The
exhibits included numerous documented examples of criminal activity.
Ironically, Judge Jackson refused to expand the scope of the trial,
because he had already decided that if the 25 witnesses called by each
side resulted in a preponderance of the evidence in support of
Microsoft, that the structural remedies would be imposed, since no
other remedy imposed up to that time in several different cases had
been effective at preventing Microsoft's anticompetitive tactics.

The election of George Bush as president, and some rather substantial
contributions to the Bush campaign early in the primaries when he was
NOT the front-runner, pretty much assured that the Bush administration
would do everything it could to nullify the antitrust case.
Additional payments of bribes through the charities created by Jack
Abramov and other top Republicans has pretty much guaranteed that
Microsoft would not have any government interference.  Microsoft has
openly defied nearly every aspect of the settlement, using loopholes
that had been identified during the comments period prior to the
acceptance of the settlement.

Microsoft was able to use loopholes to prevent OEMs from preinstalling
Linux - especially as a co-resident system with Windows.

Microsoft was able to use loopholes to prevent OEMs from Advertizing
Linux availability for machines that were also capable of running

Microsoft was able to "out vote" the technical committee in numerous
illegal attempts at technical sabotage delpoyed in Windows XP, Service
Pack 1, Service Pack 2, and Vista.

Microsoft was able to bribe the compliance officer by placing him in a
position in the marketing department, where he was paid bonuses based
on Microsoft sales and profit numbers.

Microsoft was able to keep the judge from acting against Microsoft
when they sought to cut-off Real-Networks, QuickTime, Quicken,
Antivirus makers such as MacAffee and Symantic, and firewall products
such as I-Zone, in direct defiance of the unanymous ruling by the
appellate court that Microsoft must not be allowed to use it's
monopoly power to exclude competitors from the OEM distribution

Microsoft is above the law, which means that there is no law when it
comes to Microsoft.  About the only thing the settlement has done is
provide competitors and would-be Linux distributing OEMs with the vain
hope that relief through the courts was somehow possible.  Instead,
Microsoft has gotten even more predatory, helped fund the SCO effort
to discredit Linux, and has now attempted to directly threaten the
Linux community by claiming that Linux violates certain patents,
without telling anybody what those patents are.

> Jury Hears Microsoft Competition Suit
> ,----[ Quote ]
> | A judge on Friday told jurors they must accept as fact that a
> | federal court found in 1999 that Microsoft holds a monopoly over
> | computer operating systems and that it restricted computer
> | manufacturers' ability to use competing systems.
> |
> | [...]
> |
> | She said she'll show that the company used its monopoly power
> | to exclude competition and control prices and that it conspired with
> | other companies to restrain trade, maintaining what she called a
> | chokehold on software competitors and computer manufacturers.
> `----
This link is broken - do you have a cached version?
> http://biz.yahoo.com/ap/061201/microsoft_trial.html?.v=1

> Did Microsoft want to 'whack' Dell over its Linux dealings?
> http://news.com.com/Did+Microsoft+want+to+whack+Dell+over+its+Linux+d...
> Dell's secret Linux fling [sabotaged by Microsoft]
> http://www.theregister.co.uk/2007/01/09/dell_linux_china/
> Microsoft 'killed Dell Linux' - States
> http://www.theregister.co.uk/2002/03/19/microsoft_killed_dell_linux_s...

It's ironic that Microsoft lost all 18 cases in terms of the
preliminary rulings, but was able to come out with a trivial
settlement paid for with "Billy Bucks" - in the form of Microsoft
software upgrades for the schools.  Unfortunately, the schools can't
use the upgrades because they don't have the hardware capable of
running the new software, and when they buy the new hardware, they get
the new OS for free anyway.  Net result, about the only machinse being
"upgraded" were those machines which had been previously configured
with Linux - in effect aggrevating the anticompetitive behavior even
further.  It's like "punishing the rapist by putting him in prison
with a bunch of weak women that he can rape every day.

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