[linux-elitists] A plea for relief from Microsoft's escalating anti-competitive tactics

David Mohring heretic@ihug.co.nz
Wed Mar 10 06:12:09 PST 2004

A plea for relief from Microsoft's escalating anti-competitive tactics.

An open letter to antitrust, competition, consumer and trade practice
monitoring agency officials worldwide.

The role of trade practice and antitrust legislation is to provide the
consumer with protection from abusive business practices and monopolies.
In one of the most serous cases of monopolization in the information
technology industry, the agencies charged with protecting the
competitive process and the consumer have utterly failed to stem the
offending corporation's anti-competitive practices.

The Microsoft corporation has been under continuous investigation by
antitrust policing agencies since 1989. Despite this scrutiny, the
Microsoft corporation, using covert and overt anti-competitive business
tactics, has maintained an unabated campaign against alternatives to
Microsoft Windows operating system platforms and Microsoft applications.

For years the Microsoft corporation has earned around 70% to 80% net
profit from sales of its operating systems and application software.
Only in areas like Thailand where Linux on the desktop has just begun to
gain a foothold has Microsoft stated that it will release versions of
its operating system platform and application software at a lower price
to Original Equipment Manufactures (OEMs) and retail consumers than is
available in the rest of the modern world. Consumers benefit where real
competition exists. 

The world desktop operating system market remains predominantly
monopolized by Microsoft. Over the last decade, Microsoft continued to
lever its desktop platform monopoly to the point where it now holds a
dominant position worldwide in the application office suite and web
browser software markets. On its own, the current USA Department Of
Justice (DOJ) settlement with the Microsoft corporation has failed to
bring about any restoration of serous competition to the desktop
operating system market. Microsoft continues to use similar
anti-competitive business tactics in an attempt to monopolize the
digital media player and the desktop services server markets. Competing
vendors increasingly find that they can no longer compete with Microsoft
if they limit themselves to only the traditional closed source model of
software development. 

In the last six years information technology vendors have adopted
techniques and resources from two existing movements geared toward the
construction of software. The newer open source movement, represented by
the non-profit Open Source Initiative (OSI) corporation, emphasizes the
licensing of software in a manner which encourages its collaborative
development in an open environment. The older free software movement,
represented by the non-profit Free Software Foundation (FSF), focuses on
the ethical issues surrounding the licensing of software. The free
software movement emphasizes freedoms which are often taken for granted
outside of the field of software: the freedom to use, study how
something works, improve or adapt it and redistribute. 

The Free Software Foundation offers two software license schemes which
are compatible with their own goals and those of the Open Source
Initiative: The GNU General Public License (GPL) and the GNU Library
General Public License (LGPL). Essentially, the GPL and LGPL licenses
grant the recipient extra rights than that granted by copyright law.
Both licenses insure that a contributer or distributer of a GPL or LGPL
licensed work may not further impede downstream recipients the rights
granted by the same license. Many developing software in an open source
manner have realized that this benefit offered by the GPL and LGPL
licenses outweigh any potential losses. The licensing also insures that
no contributing or distributing vendor or group of vendors could
potentially monopolize the market, insuring that real market competition
dictates price. Just as the automotive industry can commonize on
standards for the production of the mechanisms of seats, instrument
panels and doors while providing brand and regional differentiation
across a wide array of models, the information technology community can
collaboratively develop works under free licenses. Both vendors and
consumers benefit from the resulting development cost reductions and
competition from use of the resulting commons.

The Linux operating system and many other opens source and free
applications have been developed in an open source manner under free
license terms. Despite free licensing and open source licensing
requiring that the source code is freely available there are numerous
profitable business models. Vendors can offer proprietary software for
open source platforms and/or take a hybrid approach dual licensing the
development of software. Vendors can select, customizing and configure
free software, offering the bundled result. Vendors can offer support
services. Vendors can also offer hardware which runs the freely
available software. The resulting collection of hardware, software and
services has been widely deployed as a server operating environment.
Many vendors, from small one person operators to large multinational
conglomerates, now compete to provide goods and services for the
resulting platform. Linux has restored true free market competition to
the server arena. 

Linux can provide just as capable a desktop platform, however Linux
adoption in this area faces barriers resulting from Microsoft's
anti-competitive tactics. Interoperation with Microsoft products is
difficult while Microsoft continues to embrace and extend protocols
developed in an open source manner, and along with Microsoft developed
protocols and file formats, license the result in a manner unacceptable
to competing vendors. In the field of digital media, Microsoft does not
make its media player codecs available to the Linux platform. Despite
the US DOJ settlement requirements for Microsoft's contracts with
Original Equipment Manufactures (OEMs), Microsoft's current relationship
with major OEM dealers requires OEMs to sell consumers personal
computers with an operating system, in many cases requiring consumers
wanting to replace Microsoft's operating system with Linux to go though
a difficult refund process. Above and beyond the issues of
interoperation and OEMs, customer perception is one of the greatest
barriers to Linux adoption on the desktop. 

The Microsoft corporation has maintained an unabated campaign against
any and all competition to Microsoft's own products. The most
significant common denominator to this ongoing campaign is the
dissemination of Fear, Uncertainty and Doubt, commonly referred to in
the information technology sector by the acronym FUD. While it is fair
to point out relative deficiencies in competing vendors products or
services, Microsoft corporation CEOs and agents of Microsoft have too
often cross the line by participating in the dissemination of outright
untruthful statements. Refuting false allegations and incorrect
assertions requires a significant effort, especially when previously
refuted falsehoods are recycled and repeated as fact. Following the
resulting arguments can require some technical knowledge, however in the
last few years many of the more outrageously untrue statements in
Microsoft's propaganda have backfired strongly enough to show up in
Microsoft's own market research as a problem.

It now appears that Microsoft has chosen to escalate this disinformation
campaign by actively participating in a situation to discredit the
viability of the Linux platform and raise uncertainty to the cost of the
Linux platform, manufacturing Fear, Uncertainty and Doubt. 

The SCO Group has entered into a series of essentially inherently flawed
lawsuits and fraudulent license claims against users of the Linux
operating system. Since 1994, Caldera International and the Santa Cruz
Operation have been accepting, profiting from and distributing software
developed by hundreds of independent developers under the terms of the
GPL and LGPL license. The SCO Group has failed to put forward any
sustainable legal theory why it should not abide by the terms of the GPL
license. Detailed investigation into other facts and evidence which
regularly conflict with the SCO Group's various legal claims, filing,
press and public statements, raises serous questions which can no longer
be explained away by a lack of competency in either the SCO Group's CEOs
or the SCO Group's legal representation. 

There is now increasing evidence that Microsoft has been indirectly
financing to the point of sustaining the SCO Group's campaign against
Linux. Disclosed internal email memos back up by recent filings to the
US Security and Exchange Commission indicate that at least a third of
SCO's entire market capitalization, and their entire current cash
reserves, is payoffs funnelled from Microsoft. 

The relationship between Microsoft, the SCO Group and the SCO Group's
recent financial backers requires immediate investigation by all
agencies entrusted with providing the consumer with protection from
abusive business practices and monopolies. 

The adoption of Linux on the desktop offers an opportunity to restore
competition to the desktop market. The resulting freeing up by natural
market forces will open up opportunities for vendors beyond Linux, open
source and free licensed software vendors. Microsoft's escalating
anti-competitive tactics raises further barriers which the consumer
should not have to continue to face. Trade practice and antitrust
legislation exists to provide the consumer with protection from abusive
business practices and monopolies. We ask that agencies and officials
entrusted with providing the consumer with protection act according to
the intent of that legislation. 

Copyright © David Mohring, 2004 : Verbatim copying of this article is
permitted in any medium, provided this notice is preserved.

David Mohring <heretic@ihug.co.nz>

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