Correspondence Between SEC and M$

see SEC Letter to M$

This is the tail end of an exchange of letters which related to the annual report of the previous fiscal year. Some general comments and a discussion of dealings with embargoed countries like Syria included this gem:
“In future filings, we will expand our results of operations discussion to ensure that our discussion clearly identifies factors, including results within our major geographic areas and the segments impacted, which contribute to significant variances in income before taxes.”

That suggests we should see more detailed information about region/segment of M$’s business on 19-4-2012 when the next 10-Q is expected.
“Microsoft Fiscal Year 2012 Third Quarter Earnings Conference Call April 19, 2012; 2:30 PM – PT
Peter Klein, CFO”

I will be interested to see how much of M$’s assets are now held outside USA, avoiding US taxation (and stockholder dividends)… There has been friction between M$ and foreign governments over hiding income as well. Perhaps like Al Capone, M$ will receive justice over taxes rather than anti-trust violation.

From the last 10-Q:
“NOTE 12 INCOME TAXES
Our effective tax rates were approximately 20% and 22% for the three months ended December 31, 2011 and 2010, respectively, and 20% and 23% for the six months ended December 31, 2011 and 2010, respectively. Our effective tax rate was lower than the U.S. federal statutory rate and prior year effective rates primarily due to a higher mix of earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland, Singapore, and Puerto Rico, which are subject to lower income tax rates.
Tax contingencies and other tax liabilities were $7.7 billion and $7.4 billion as of December 31, 2011 and June 30, 2011, respectively, and are included in other long-term liabilities. While we settled a portion of the I.R.S. audit for tax years 2004 to 2006 during the third quarter of fiscal year 2011, we remain under audit for these years. During the fourth quarter of fiscal year 2011, the I.R.S. completed its examination and issued a Revenue Agent’s Report (“RAR”) for the remaining unresolved items. We do not agree with the adjustments in the RAR, and we have filed a protest to initiate the administrative appeals process. The proposed adjustments are primarily related to transfer pricing and could have a significant impact on our financial statements if not resolved favorably. We do not believe it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months, as we do not believe the appeals process will be concluded within the next 12 months. We also continue to be subject to examination by the I.R.S. for tax years 2007 to 2011.
We are subject to income tax in many jurisdictions outside the U.S. Certain jurisdictions remain subject to examination for tax years 1996 to 2010, some of which are currently under audit by local tax authorities. The resolutions of these audits are not expected to be material to our financial statements.”

That should inspire confidence in shareholders. Depending on the outcome of an appeals process to prop up the bottom line is not good business. If the taxation contingency is $7billion for the audit of 2006, what could be the size of the contingency for all those other years?

You can see M$’s exchanges with the SEC here.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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52 Responses to Correspondence Between SEC and M$

  1. I think software patents are an illegal fraud perpetrated by lawyers. It is a sad chapter in history that courts have agreed to participate in the sham.

  2. Clarence Moon says:

    Well, context is important to me and clearly the discussion was in regard to that. So I will amend my statement to read:

    I do not believe that any competitor of Microsoft has been awarded one red cent in compensation for any antitrust violation by Microsoft over the past 30 years or so

    Now will you answer the question as to whether you consider i4i to be a Microsoft “competitor” and whether or not you now support this sort of patent trolling?

  3. Clarence Moon brought up the matter of M$ having to pay people and now seeks to blame me for changing the topic. Shame.

    Clarence Moon wrote at “2012/04/12 at 1:01 pm

    Correct me if you can find some different information, Mr. Pogson, but I do not believe that any competitor of Microsoft has been awarded one red cent in compensation for what Microsoft did over the past 30 years or so.”

    Shame.

  4. Clarence Moon says:

    Well, Mr. Pogson, the discussion was about antitrust litigation and you are now going far afield to find any thing factual to say that is anti-MS! You find yourself in the curious position of supporting the activities of patent trolls, which you profess to hate in order to save face on this issue. Even then, there is no validity in trying to cast i4i as a “competitor” of Microsoft.

    Today’s ruling concludes one of the most closely watched patent law cases in years. Microsoft pressed to establish a precedent that would make it harder for companies with patent claims to prove infringement. It was joined, in friend-of-the-court filings, by a host of large technology companies, including Apple, Google, Facebook, and Cisco. And a collection of younger, Net-generation leaders, such as Facebook, eBay, LinkedIn and Netflix, supported Microsoft as well.

    i4i had its own coterie of supporters among corporate giants, including pharmaceutical behemoths such Eli Lilly and Bayer, whose patented drugs generate billions in revenue. Other friends-of-the-court filings in favor of i4i came from 3M, Proctor & Gamble, General Electric, and Dolby Laboratories. And several venture capitalists, universities, and even the U.S. Solicitor General backed i4i’s position.

    Who’s side are you on here, Mr. Pogson? Do you support software patents like this or not?

  5. Clarence Moon needed to be reminded that he wrote, “I do not believe that any competitor of Microsoft has been awarded one red cent in compensation for what Microsoft did over the past 30 years or so.”

    A competitor was awarded $millions in compensation for what M$ did within the last few years, so Clarence Moon was wrong in his assertion. QED

  6. Clarence Moon says:

    Something about XML

    Yes, but that was a patent suit, Mr. Pogson. Are you suddenly in favor of software patents?

  7. Nonsense. There was a suit over an algorithm in the office suite a few years back… Something about XML.

  8. Clarence Moon says:

    Since when do the US DOJ, European Commission, Korean and Japanese governments get involved with misdemeanors?

    Possibly they do, but the Microsoft actions were all civil actions, Mr. Pogson, not criminal in any way. I am sure that the distinction is lost on you, but to me it is very important. Civil actions stem from civil liability and result in fines and orders to reimburse the victim.

    Correct me if you can find some different information, Mr. Pogson, but I do not believe that any competitor of Microsoft has been awarded one red cent in compensation for what Microsoft did over the past 30 years or so. The EU collected some tribute to the tune of a couple of billion dollars, but Microsoft has plenty of money and the EU area has traditionally paid a lot more for Microsoft products to begin with, so it is a fair exchange, I think.

  9. Yep. Those applications are mathematical with very few human factors involved. Since the 1960s when I first got involved with computers the usage of computers for calculations has grown exponentially. “easy” is a relative thing, though. Because GUI-less-ness means a lot less fiddling such software can still become huge or have huge data-sets. What one wins in one area one loses in another. One of my first number-crunching jobs was on a data-set that fit on five 2400ft 6250 bpi magnetic tapes. That’s something like 1gB. Now there are science projects that produce more data per second. While the UI may be simple, the data-structures are huge and GUIs are standard now, too. The projects within computational limits keep increasing in number as well as size. Many big projects depend on huge clusters. Number-crunching has its challenges. My favourite is turning a few squiggles done by a mathematician into hundreds of lines of code. There’s still a lot of work to do. Originally, computers were used mainly for arithmetic. They now do pattern recognition and network analysis, stuff about fuzzy data.

  10. Phenom says:

    Let me quote Dijsktra, I hope you’ve heard of him:
    “The easiest machine applications are the technical/scientific computations.”

  11. I was a professional programmer. I wrote software in R&D at the University of Manitoba, mostly CAD and statistical analysis in nuclear physics lab. I did that from 1970 to 1983. Then I wrote analysis and control systems at a nuclear medicine lab in a hospital for three years. I still programme a bit for this blog and stuff around the home.

  12. Phenom says:

    Pogson wrote: I have written and used software for decades. That’s knowledge and experience.

    I eat meat for decades, too, and I also debone a chicken or a rabbit, or a piece of lamb every now and then. That doesn’t make me a professional butcher.

  13. kozmcrae says:

    “Just a mouthful of words, Mr. Koz. Like everything else you say. No content, just sounds. ”

    It’s good that you can recognize that Clarence. But like the comedian Rich Little said, “No one can recognize their own voice from a good mimic.”.

    Your attempts at revising Microsoft history are hitting a bit of a snag here on Pogson’s blog. Are you sure you want more content? You’re not doing so well with the content that’s getting thrown back in your face now. How could you handle any more?

    Oh, now I get it. You want to tussle with me over… what? Anything but content, right? You could handle that now couldn’t you Clarence.

  14. “Crime – 2. Gross violation of human law, in distinction from a misdemeanor or trespass, or other slight offense. Hence, also, any aggravated offense against morality or the public welfare; any outrage or great wrong. “To part error from crime.” –Tennyson.
    [1913 Webster]”

    Since when do the US DOJ, European Commission, Korean and Japanese governments get involved with misdemeanors?

    “South Korea’s Fair Trade Commission (KFTC) found Microsoft guilty of breaking anti-trust laws by bundling its media player and instant messenger programmes with its operating system. The company was ordered to pay a fine of $34m and to offer a version of its software without the bundled applications.” see The Register

    “Japan’s Fair Trade Commission (FTC) has ordered Microsoft to remove restrictive clauses from OEM contracts with PC vendors and to ensure that it does not add such restrictive clauses again. But it is not fining the software giant, which has until 26 July to appeal the decision”

    see The Register

  15. Clarence Moon says:

    Microsoft is being treated like a criminal corporation by more people every day.

    Just a mouthful of words, Mr. Koz. Like everything else you say. No content, just sounds. No one who has any ability to influence commerce is calling Microsoft criminal, just your ignorant self.

    Look up “paraphrasing”, too, and come back and tell us what is wrong with your characterization of your words.

  16. Clarence Moon says:

    So what is “bloated” here, Mr. Pogson. Are the animated cursors somehow too verbose for your tastes? Or do you just fell that there is no need for them? Don’t Linux versions have any animated cursors? I really don’t know, but they are staples of Windows UI’s. From what little I know of Android phones, they have as many animated buttons and cursors as Apple or WP7.

    As to the vulnerabilities themselves, buffer overflows have been a fact of life no matter how vigorously developers are counseled to test and verify operations. I might add that the paragon of open source code, the Standard Template Library, has been as much of a cause of these failures as anything else. Microsoft does not have a monopoly on vulnerabilities. They just have the most of it since they have the most code in use.

  17. Clarence Moon wrote, “I very much doubt that any such code exists now or existed in the past in regard to MS operating systems or applications.”

    Uh, “Vista” was beset by a vulnerability created in Lose 3.1. How backwards does an OS have to be before Clarence Moon recognizes it?

    see Animated Cursors (2007), bloat if there ever was bloat…

    see GDI vulnerabilities (2008)

  18. Clarence Moon says:

    …that’s data, not code…

    Surely the “bloat” to support “backward compatibility” that you note is simply code that has less and less use due to the gradual decline of older programs. It is not using too many instructions to get the job done. I very much doubt that any such code exists now or existed in the past in regard to MS operating systems or applications.

    In more technical venues I have only seen the claim being made where some overly ornate graphical method was used to do something that could be done more directly and efficiently. Command line fans were wont to use the term to mean anything done via GUI. Certainly it widened the footprint of Windows on system resources, but, as I posted, it seems to me that the hardware has long since risen to the needs of the software and excessive amounts of it are available universally.

    Austerity in terms of hardware assets is not a compelling driver of sales in any market today. Think Maginot Line in a Blitzkrieg sort of world.

  19. kozmcrae says:

    Clarence said:

    “That is an interesting way to dismiss the results of an extensive review of the legalities involved, Mr. Koz, and it is consistent with your lack of depth on most topics discussed here.”

    Don’t know your own words when you see them Clarence, do you? I was simply paraphrasing you. You’re the one who dismisses Microsoft’s legal troubles:

    “For one thing, you and Mr. low pressure bear have cited the exclusionary dealing as a sin of Microsoft, but the facts are that they have never participated in any sort of illegal exclusionary dealing and have never been found in violation. Never.

    It really doesn’t matter what the legal technicalities are Clarence.

    Microsoft is being treated like a criminal corporation by more people every day. Legal or not, get used to it… Or just cry about it like you do here most of the time.

  20. If you look at web stats from USA I can see your point, but those stats are not representative of USA properly and certainly not indicative of what’s happening in Europe, Africa, Asia and South America where FLOSS is widely used and often promoted by governments.

  21. There’s rarely a situation where bloat of software improves performance. Of course various algorithms work better with more RAM but that’s data, not code. The more code there is in a product, the more errors there will be more or less.

  22. Clarence Moon says:

    …bloat…

    The thought occurred to me that the percentage of system resources used, such as RAM and hard disk space, are much lower with the more recent versions of Windows than they were with earlier versions. I don’t see where computer users care very much about this issue today, if they ever cared. With such a minimal expense for these resources, don’t you think that the range of performance is more important than a few pennies worth of silicon?

  23. Clarence Moon says:

    It really doesn’t matter what the legal technicalities are…

    That is an interesting way to dismiss the results of an extensive review of the legalities involved, Mr. Koz, and it is consistent with your lack of depth on most topics discussed here. With such a point of view, it is a wonder how everyone seems to be able to dismiss your conclusions!

    The hot markets in IT are filled with hundreds of millions of people who know about GNU/Linux or Android/Linux …

    It is almost painful to see you so desperate to find a silver lining in the Linux cloud, Mr. Pogson. You are now equating Android’s effect with that of GNU? I can’t see that at all and I really doubt that you have such high confidence in the comparison.

  24. kozmcrae wrote, “Their best days are behind them and they have no one to blame but their own business practices.”

    It’s sad how much harm M$ has done to the world but there is some satisfaction knowing M$ is subject to its own lock-in and cannot innovate its way out of the hole it has dug even if it wanted to do the right thing. The moment they strip off the bloat they will break backwards compatibility and their whole empire will be free to choose GNU/Linux or Android/Linux or FreeBSD etc. They are trying to sell the old crap to new people who are not locked in and it’s not working. On the back end everyone knows and used GNU/Linux. On the client everyone knows the stuff running on the back end will do the job. That leaves a melting ice-flow for M$ for a few years more until they are sunk for good.

    The hot markets in IT are filled with hundreds of millions of people who know about GNU/Linux or Android/Linux and are not interested in bloated cash cows. The markets in China and India will soon be larger than the rest of the world and they are not buying a lot of shrink-wrapped software. They buy hardware and services.

  25. kozmcrae says:

    Clarence said:

    “In no way does it support your claim of Microsoft being found in violation of the Sherman Act due to having “made exclusive deals against Netscape” as you asserted.”

    It really doesn’t matter what the legal technicalities are Clarence. Microsoft acted in bad faith. People have a clue about Microsoft. They also have a clue about choice and they are making those choices. That’s one of the reasons Microsoft is failing so miserably in the mobile phone market. And their dominance is being eroded everywhere else.

    Go ahead, get all smug about it. It wont do you or Microsoft any good. They are beginning to slide down hill. Their best days are behind them and they have no one to blame but their own business practices.

  26. Clarence Moon says:

    Ah, but not an illegal exclusive deal, Mr. Pogson. That is the key issue to me. Offering a good dealto an OEM is a respectible way to earn their business, I would think. It is done all the time in all industries. Have you never been offered a bargain? If someone else has my business, as was pretty much the case with the Netscape monopoly on browsers at the time, it is almost always necessary to provide a much better deal to get the entrenched product switched to your new product. Else why bother with you?

  27. Preventing OEMs from installing Netscape was an exclusive deal if there ever was one.

  28. Clarence Moon says:

    If these troll morons are too lazy to go look for themselves…

    You write so eloquently, Mr. Bear! If your verbal skills are at all equal to that, I am sure that your huge success in your career and personal life are a direct result.

    I suspect you must be consulting regularly with Mr. Koz, building your repertoire of wit.

  29. Clarence Moon says:

    Hmmm…

    You cite a patently lame attempt at face-saving by the losing side of the contest, Mr. Pogson. There is no force of law in that narrative and it is nothing more than a verbose sort of surrender intended to gloss over their failure to make any of the major charges brought against Microsoft to stick.

    In no way does it support your claim of Microsoft being found in violation of the Sherman Act due to having “made exclusive deals against Netscape” as you asserted.

    Most noteworthy in this action is the fact that there were no fines levied for any Microsoft conduct and there were no injunctions issued to cease and desist any specific conduct, vis-a-vis section 1 or section 2. Had the charges that remained after the appeals court decision been the only cause for action in the original filing, it would never have been brought.

  30. Phenom wrote, “you speak of areas which you obviously have neither the knowledge, nor experience about.”

    I have written and used software for decades. That’s knowledge and experience.

  31. Phenom says:

    IMHO, there are huge advantages for software made on a tight budget. There’s less room for crap in the code.

    Mr. Pogson, I find it charming how you speak of areas which you obviously have neither the knowledge, nor experience about. You see, writing some small piece 20 years ago does not qualify you as competent. Not by a long shot. You keep on mistaking “features” for “crap”, or “bloat”, as loons like to call it. No, Pogson. In the world of software development, crap means something quite different.

    Tight budget means:
    1. Save on features.
    2. Save on design – code is not structured, not planned. There is time for refactoring, and you end up with same pieces of code scattered everywhere.
    2. Save on optimizations for either memory, or performance, or in most cases – both.
    3. Save on testing.
    While 1 may or may not be good, the rest are definitely bad.

    In software, there is something called “project management triangle”. Look it up and see what cheap leads you to for yourself.

  32. lpbbear says:

    “Nope. We are people who have work to do and who are impatient with the geek whining that sometimes passes for informed comment on this site.

    The damage to mankind is done by people like yourself who attempt to propagate communally created crap code as an acceptable substitute for commercial software.”

    Where do you get the idea that I “attempt to propagate communally created crap code”? What kind of moron are you to jump to that conclusion and what kind of moron ASSumes that all communally created code is crap? (a moron like you apparently)

    When I am dealing with customers I do not automatically try to force Linux upon them. I listen carefully to their needs and only suggest Linux if I feel it would be a good fit for them. For some it is a good fit, for others too locked into the Winblows empire maybe not so good a fit.

    As for crap code, over the years I have seen just as much crap commercial software as I have seen “crap” free software. I do have to say I would much rather be getting a chance to try the free so called “crap” software without cost as opposed to being shafted by the zillion lousy costly commercial apps out there in the Winblows world.

    So even though I am careful to listen to my customers needs I’m betting a bigoted arrogant blowhard like yourself never ever utters the word Linux to a customer unless forced to at gunpoint.

  33. oldman wrote, “communally created crap code as an acceptable substitute for commercial software”.

    There is no logical connection between where/how software is created and its quality. Commercial software can be created by a community. Linux definitely is commercial software. Just look at kernel.org. Then again, you can look at Lose ‘9x and see nothing but crap.

    The quality of software is a combination of good design and attention to detail. Lots of FLOSS programmers are great at both of those. They also are often hired by “commercial” software houses.

    IMHO, there are huge advantages for software made on a tight budget. There’s less room for crap in the code. I once was given the source code for a famous software from a wealthy university. I could not even get it to compile on our mainframe. Not enough memory. I finally rewrote the thing to do exactly the same work in 1/4 of the lines of code. I swear 1/4 of the code was “computed GoTo” statements mixed with duplicated routines all over the place. I got the result to run on our minicomputer with 32KB RAM. So, money does not always equate to quality of code as oldman suggests. I don’t believe I get more by paying a hire price. I shop around for the best price or make stuff myself.

    Prime examples of value for money are Linux, the GNU system and LibreOffice. There is huge value in those codes for a minimal investment compared to the $billions wasted on much more expensive stuff. I have twice worked in schools that had paid for expensive software packages that would not even install let alone run. In both cases I installed FLOSS packages that did the same job and, faced with revolt, the supplier of the so-called commercial software rapidly made their stuff work. Love of money is the root of all evil in software.

  34. oldman says:

    “These trolls are shills for a rotten to the core corporation headed by rotten to the core megalomaniacs whose self centered ambitions are doing a huge amount of damage to mankind.”

    Nope. We are people who have work to do and who are impatient with the geek whining that sometimes passes for informed comment on this site.

    The damage to mankind is done by people like yourself who attempt to propagate communally created crap code as an acceptable substitute for commercial software.

    Personally I dont give a tinkers f-rt about any of this ancient history. It is not illegal for microsoft to sell me their software and it is not illegal for me to own it. I shall continue to use iMicrosoft based commercial software and FOSS and linux as I see fit, as shall the world of computing.

    And there is nothing that you can do about it.

  35. Clarence Moon wrote, of M$’s evil deeds, “those exclusive deals were not found to violate the antitrust laws”.

    Hmmm…

    “The Court of Appeals upheld the District Court’s conclusion that Microsoft unlawfully maintained its operating system monopoly by engaging in a range of exclusionary conduct designed to quash the nascent threat to the applications barrier to entry posed by middleware products. In particular, Microsoft engaged in a campaign to eliminate the potential threat from the Netscape Navigator web browser by placing restrictions on OEMs, integrating Internet Explorer into Windows in a manner that did not permit users or the OEMs to remove access, and engaging in restrictive and exclusionary practices with respect to Internet Access Providers, ISVs, and Apple. Microsoft was also found to have attempted to mislead and threaten software developers in order to contain the competitive threat from “Java” middleware technologies. The Court of Appeals affirmed the District Court’s conclusion that all of this exclusionary conduct violated Section 2 of the Sherman Act.”

    see REVIEW OF THE FINAL JUDGMENTS BY THE UNITED STATES AND NEW YORK GROUP

    Quoting the Court of Appeal:
    “(1) it excluded IE from the “Add/Remove Programs” utility; (2) it commingled in the same file code related to browsing and code used by the operating system so that removal of IE files would cripple Windows; and (3) it designed Windows in such a manner that, in certain circumstances, a user’s choice of an internet browser other than IE would be overridden. Id. at 64-65. Although all three acts had anticompetitive effects, only the first two had no offsetting justification and, therefore, “consitute[d] exclusionary conduct[ ] in violation of § 2.” Id. at 67.”

  36. lpbear wrote, “Why bother being civil to jerkoffs that continue to post blatant lies and crap like the above?”

    It’s the right thing to do.

    “If thine enemy be hungry, give him bread to eat; and if he be thirsty, give him water to drink:

    For thou shalt heap coals of fire upon his head, and the LORD shall reward thee.”

    -Bible- Proverbs Chapter 25 verses 21-22

  37. lpbbear says:

    “I don’t think that you are playing fairly with the facts here, Mr. Pogson. For one thing, you and Mr. low pressure bear have cited the exclusionary dealing as a sin of Microsoft, but the facts are that they have never participated in any sort of illegal exclusionary dealing and have never been found in violation. Never.”

    Pog, the reason I have lost all patience with the “Cult Of Microsoft” is statements like the above. Why bother being civil to jerkoffs that continue to post blatant lies and crap like the above? Why continue to refute their lies by re-posting over and over and over the same long list of well known court cases and other proof that yes, indeed, Microsoft HAS engaged in all sorts of dirty tricks and exclusionary tactics and is STILL engaged in them.
    If these troll morons are too lazy to go look for themselves, or too stupid to understand what they are reading why should I bother being civil and fair to them? They certainly aren’t fair nor is the ratbag company they support. These days I call it like I see it. These trolls are shills for a rotten to the core corporation headed by rotten to the core megalomaniacs whose self centered ambitions are doing a huge amount of damage to mankind. They don’t deserve civility nor fair treatment nor benefit of the doubt. Not after all the years of unchecked abuse the company they support has engaged in.

  38. Adam King says:

    I like the particularly apt comparison to Al Capone. Like M$ he was greedy. Like M$ his greed was the central aspect of his life. He massacred his own associates just to take more power. He ran alcohol in direct violation of the law at the time. He openly flaunted his breaking of the alcohol laws. Eventually his greed got the better of him and he withheld so much from the government that they went after him. I pray the same happens to M$ in our lifetimes.

  39. Clarence Moon says:

    The court found…made exclusive deals against Netscape

    But those exclusive deals were not found to violate the antitrust laws, Mr. Pogson. How can an educated fellow such as yourself continue to claim otherwise?

    I am sure that you understand that exclusive dealing, if it ever rises to the level that unfairly restrains trade for which the courts have determined tests over the years, is a Section 1 violation of the Sherman Act. The violations noted for Microsoft in the DOJ action were all section 2 violations, which are essentially violations of monopoly maintenance activities.

    Be honest with your claims, Mr. Pogson. You find enough to complain about among the legitimate issues, I think, and do not have to resort to non-factual ones.

  40. Ivan says:

    Google doesn’t do that.

    Yes they do: Google is avoiding paying both U.S. and foreign taxes through the use of complex loopholes. The strategy, known as “income shifting,” moves Google’s profits through Ireland and the Netherlands to Bermuda. The article reports that these strategies have helped Google “reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.” That’s a suspiciously low rate, to put it mildly, since Google is operating in nations where the average corporate tax rate is 20 percent.

    They were audited for the practice. Turns out, massive multi-national corporation hire a team of tax lawyers that look for loopholes just like this to save them money.

    You could do the same thing, if you could afford the team of tax lawyers.

  41. oiaohm says:

    You are forgetting the EU case where MS got there head handed to them for altering a protocol they did not own and not documenting the changes for everyone else to use.

    Microsoft tried to run away from the EU courts threatening to close down EU operations to avoid fines. So the EU courts came to the USA and got approval to apply fines in USA.

  42. Clarence Moon wrote, of M$, “they have never participated in any sort of illegal exclusionary dealing and have never been found in violation.”

    The court found

    1. they had monopoly power,
    2. made exclusive deals against Netscape, and
    3. they had violated sec. 2 of the Sherman Act

    The appeals court ordered the finding revisited and M$ wiggled out by agreeing not to do it any longer.

    There’s no doubt in my mind that a reasonable court would have finished M$ off to the greatest extent of the law. One does not go all the way to an appeal and then “plea bargain” if one is not guilty. If they had a winning case, they would have not settled.

  43. ernest says:

    A one-off, I promise you.

    What exactly is your problem, Robert?

    It’s not as though you didn’t reply to pretty much every single one of my posts.

    Are you afraid of criticism? What a sad thing that would be.

    Keep looking for the correlation between innovation and Linux uptake, btw. You’re looking in the wrong place, but don’t let that stop you.

  44. Clarence Moon says:

    The difference between M$ and other major corporations is that M$ repeatedly and persistently messes with competition.

    I don’t think that you are playing fairly with the facts here, Mr. Pogson. For one thing, you and Mr. low pressure bear have cited the exclusionary dealing as a sin of Microsoft, but the facts are that they have never participated in any sort of illegal exclusionary dealing and have never been found in violation. Never.

    Perhaps you feel that what they do is exclusionary because your favorites end up being excluded, but that is only because their efforts to promote themselves are so inept as to continually fail to gain any traction among the majority of users. It feeds your prejudices and blinds you to the truth.

    Market dynamics being what they are, there is little likelihood of Linux or any other OS gaining much interest in the PC product arena. Apple certainly will continue to sell OS X to those who want the Macintosh products. Perhaps Walmart and others will be successful in selling Linux as extremely low end product offerings although past attempts have all failed and been abandoned after short periods where they were offered.

    The lack of alternatives to desktop Windows is not an illegal or even an undesirable thing, I think. Rather it is the result of the higher than usual effect of natural selection that is present in the PC industry. Others have succeeded as well, for example Quicken’s personal finance products including TurboTax or Adobe’s products that deal with PDF files.

  45. lpbear wrote of aardvark, “You are truly full of sh*t.”

    I really hate to say things like that. It usually signals an end to my patience. I am glad you wrote that. I think it is true in this case. I think aardvark is playing the troll. I thought I had banned aardvark already.

    Damnation! My comment blacklist thingy is not working… The gates of Hades are open!

    No, it’s my fault. When I changed the spam-filtering some normal comments were marked as spam. That’s exactly what the comment-blacklister does so I was defeating it by bulk-approvals… GGGGGRRRRR!

  46. lpbbear says:

    “Let’s see, then. There’s no way at all that Ford would mess with General Motors.

    There’s no way at all that McDonalds would mess with Burger King and Wendys.

    Why would Safeway go down the low road and mess with {supermarket of choice}? Hell if I know.”

    You’re so full of crap its obviously blinding your eyes to whats in front of you.

    So according to you and your “world view”, at least the little view afforded by the crap in your head, all of the above mentioned companies are “mess(ing) with” with the other companies. Lets substitute “competing” for “mess with”. Yep, all of the above are competing with all of the above. In the case of Microsoft the situation is quite different. Microsoft not only competes with other companies, it engages in illegal exclusionary tactics to the point of being busted for it in several well known court cases.

    If you were correct then all the car dealers I would see in my town would be carrying only Fords, the only supermarkets would be Safeway, and the only garbage food joints would be McDonalds. Conversely, if Microsoft is NOT engaged in exclusionary tactics according to you I should see an amazing array of different operating systems/software/computers on the software shelves.

    You’re wrong and consumers have a wide variety of choice in all areas….EXCEPT in the retail software/operating systems/computer market….and we’re working on changing that.

    You are truly full of sh*t.

  47. aardvark wrote, “when you’re talking about the difference between IBM, Oracle, Google, Microsoft and Apple”.

    Show me IBM’s “Get the FUD” site. Show me IBM funding patent trolls and scoflaws like SCOG. Show me IBM accepting malware as “business as usual”. Show me IBM buying up competitors’ products to keep them off the market. Show me IBM bribing people to sell out.

    “Finding a moderator is key to setting up a stacked panel. The best sources of pliable moderators are:
    Analysts: Analysts sell out. That’s there business model…
    Consultants: These guys are your best bets as moderators. Get a well-known consultant on your side early but don’t let him publish any blatantly pro-Microsoft stuff…”

    That’s from one of M$’s training manuals.

    There’s no hint of integrity there. From IBM I have never seen any hint of evil since the mainframe days.

  48. aardvark says:

    Mr Pogson:

    “This looks like a big liability to me.”

    Then we’ll apply your theory of QA on predictions to it, shall we?

  49. aardvark says:

    Mr Pogson:

    “The difference between M$ and other major corporations is that M$ repeatedly and persistently messes with competition.”

    Really?

    Let’s see, then. There’s no way at all that Ford would mess with General Motors.

    There’s no way at all that McDonalds would mess with Burger King and Wendys.

    Why would Safeway go down the low road and mess with {supermarket of choice}? Hell if I know.

    And let’s go up to the luxury end of the market, which neither you or I care about. Handbags? It’s War out there I tell you, Neddie, War!

    Time to come clean and to recognise that all your favourite FOSS corporations … except for IBM before it decided that FOSS was good for the bottom line, obviously … except for Oracle, which is now corporata non gratis, even though it used to be fine … except for da de da de dah …

    All of them act the same. They do the same shady tax deals; they do the same patent trolling; they do the same rip-offs wherever they can.

    I’m with you on the basic honesty and integrity of a 100 person company founded on FOSS. Good luck, and God Bless.

    But when you’re talking about the difference between IBM, Oracle, Google, Microsoft and Apple …

    It’s the difference between a flea and a louse.

  50. The difference between M$ and other major corporations is that M$ repeatedly and persistently messes with competition. Given that appearance of immorality, it is only a matter of degree how they are messing with IRS. This looks like a big liability to me.

  51. aardvark says:

    Mr Ray:

    Not true. Google doesn’t do that. Nor does Red Hat.

    IBM is too busy making money out of other people’s work in the FOSS community even to contemplate a dodgy fiscal manoeuvre.

    And as for the non-profits, like the Linux Foundation, well … Heaven Forfend!

  52. Ray says:

    Welcome to the US tax system, where every major corporation avoids taxes via loopholes, deals, etc.

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