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

Posted by NZheretic on Mar 12, 2004 10:58 AM EDT
LXer; By David Mohring
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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 crossed 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 competence 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 Securities and Exchange Commission indicate that at least a third of SCO's entire market capitalization, and their entire current cash reserve, 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 raise further barriers which the consumer should not have to continue to face. Trade practice and antitrust legislation exist 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.

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perhaps someone should start a fund... salparadise 1 1,781 Mar 13, 2004 6:44 AM

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