170 lines
7.8 KiB
HTML
170 lines
7.8 KiB
HTML
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<html>
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<version>1</version>
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<head>
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<title>FSF Europe - Microsoft against free competition</title>
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</head>
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<body>
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<h1>
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Software Patents Could Reduce The Microsoft Antitrust Suit To Absurdity
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</h1>
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<p>
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Microsoft CEO Steven Ballmer is a wise man. In March, he spoke to a
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business magazine about the Free Software movement and conceded, "I'm not
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saying it's not real competition. Maybe the world has exactly what it
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wants. It has us moving fast and hard, keeping our prices down." To
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paraphrase: Competition from Free Software such as GNU/Linux helps keep
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Microsoft innovative and prevents it from increasing prices arbitrarily.
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</p>
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<p>
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At the same time, Ballmer was honest enough to admit that he would
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litigate against Free Software if Microsoft weren't able to withstand the
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competition. In the same interview he said: "There are experts who claim
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Linux violates our intellectual property. I'm not going to comment. But
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to the degree that that's the case, of course we owe it to our
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shareholders to have a strategy." Reading between the lines, his message
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seems to be that competition with Free Software has become inconvenient
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to Microsoft, and that the company aims to regain control by whatever
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means.
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</p>
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<p>
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Unfortunately, Ballmer is not as precise in his language as he could be.
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For one thing, "intellectual property" is not a legal term that exists,
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as such, anywhere in the world. Rather, lawyers work with legal
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structures such as copyrights, trademarks, and software patents. Given
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the circumstances, it's unlikely Ballmer is referring to copyrights and
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trademarks. So what he really means is software patents.
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</p>
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<p>
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And Microsoft knows the problems which might be caused by software
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patents very well. Here is a quote from Microsoft founder Bill Gates in
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1991: "If people had understood how patents would be granted when most of
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today's ideas were invented and had taken out patents, the industry would
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be at a complete standstill today." Most interesting is Mr. Gates
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conclusion: "The solution is patenting as much as we can. A future
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startup with no patents of its own will be forced to pay whatever price
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the giants choose to impose. That price might be high. Established
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companies have an interest in excluding future competitors."
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</p>
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<p>
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Following this strategy, Microsoft applied for and was granted thousands
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of patents throughout the world, including in Europe. But since Europe
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still lacks a legal basis for regional software patents, the software
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giant has lobbied intensively in favor of such laws in recent years. The
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attempts have failed so far, but in the meantime, Microsoft spreads FUD
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-- fear, uncertainty, and doubt -- over Free Software by openly
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speculating about possible "intellectual property" concerns. The aim is
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simple: To prevent customers from exercising freedom of choice in
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software.
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</p>
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<p>
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The European Commission will try to defend users' freedom by defending
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its 2004 antitrust decision against Microsoft before the Court of First
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Instance on April 24. But in the meantime, businesses small and large are
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choosing freedom by running a mixture of operating systems and
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application on their networks -- GNU/Linux, Unix, and Apple-based systems
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on one side, and Windows on the other. Communication works fine within
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these two worlds, but not between. There, cooperation falls down, not due
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to genuine technical constraints but simply because Microsoft has made it
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artificially difficult for Windows to interoperate with other operating
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systems.
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</p>
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<p>
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In this way, the monopolist remains in control of individual machines as
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well as the corporate network. In 2004, the European Commission ruled
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that Microsoft had harmed competition in Europe, and ordered the company
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to restore fair market conditions by publishing interoperability
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information for Windows. This software "grammar" is akin to the rules
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humans use to speak common languages. (The Free Software Foundation
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Europe has been admitted as a third party to the trial and has supported
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the European Commission since the lawsuit started in 2001.)
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</p>
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<p>
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Microsoft's resistance to complying with the Commission's demands make
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clear that the stakes in this battle are far greater than control of
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software markets such as network servers. Rather, the company's entire
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business model is at risk. Some 80% of Microsoft's revenues, and
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essentially all of its profits, derive from Windows and the Office suite
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of desktop applications. Can this possibly be because users are so happy
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with Microsoft software? Or are they "locked-in" to technology they
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acquired like crab lice in a careless moment?
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</p>
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<p>
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Microsoft is clearly scared by the possibility of customer defections,
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and so are shareholders. Every time the European Commission reasserts its
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intention to force open secret Windows protocols, Microsoft's stock dips.
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Overall, its shares have been flat since the EC's decision in 2004. But
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management and investors obviously are counting on continued software
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lock-in as the linchpin of Microsoft's future success.
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</p>
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<p>
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The problem is, with growing competition from Free Software and other
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alternatives, Windows and Office aren't likely to keep producing the
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enormous returns that Microsoft and its shareholders are used to. That's
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why the company is plunging into emerging opportunities such as security
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software, desktop search, RFID, and voice over IP (VoIP). But in typical
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fashion, the software giant aims to build those capabilities into Windows
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-- the very practice the European Commission faulted in its 2004
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decision. For now, Microsoft seems willing to risk fines from the
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Commission amounting to at least $2.4 million per day to hold onto its
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business model. After all, that's a pittance compared to what it makes
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every day in profits from its twin software monopolies.
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</p>
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<p>
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But here's the gotcha: Over the long term, Microsoft is counting on
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software patents in Europe for its escape hatch. Even if the company is
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forced to publish its secret software protocols or leave key features out
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of Windows, a European software patent law might eventually let it stamp
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out competition from Free Software. Though two previous attempts at
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enacting a European software patent were defeated, Charlie McCreevy,
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Europe's commissioner for Internal Markets and Services could well
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resurrect the project this year.
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</p>
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<p>
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That would be the ultimate irony. The same Commission that is pursuing
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Microsoft on the one hand for antitrust violations is, on the other hand,
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sanctioning new patent laws that could give Microsoft the power to crush
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competition forever. If such rules go into effect across Europe,
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entrepreneurs angling to compete against Microsoft could be blocked at
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every turn by software patents that prevent them from innovating. For the
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EC's pro-competition efforts are to have any teeth, Europe must resist
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allowing software patents that would render its antitrust capacity moot.
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</p>
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<p>
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Jonas Öberg<br />
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Vice President<br />
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FSFE,<br />
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Trollhättan, Sweden
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</p>
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<p>
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Carlo Piana<br />
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Lawyer<br />
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Studio Legale Tamos Piana & Partners,<br />
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Milano, Italy
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</p>
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</body>
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</html>
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