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Open source withstands antitrust scrutiny
Internet Cases ^ | 9 November 2006 | Evan Brown

Posted on 11/09/2006 5:30:55 PM PST by ShadowAce

The U.S. Court of Appeals for the Seventh Circuit has issued an opinion in which Judge Easterbrook declares, "[t]he GPL and open-source have nothing to fear from the antitrust laws." The case is called Wallace v. IBM., No. 06-2454. [Download a copy of the opinion.] Internet Cases covered the lower court's decision from last December here.

Plaintiff Wallace filed an antitrust suit against IBM, Red Hat and Novell, arguing that those companies had conspired to eliminate competition in the operating system market by making Linux available at an "unbeatable" price (free) under the General Public License ("GPL"). The U.S. District Court for the Southern District of Indiana dismissed the case, finding the plaintiff had suffered no antitrust injury. The Seventh Circuit affirmed.

"Although antitrust law serves the interests of consumers rather than producers, the Supreme Court has permitted producers to initiate predatory-pricing litigation," Judge Easterbrook wrote in the November 9 decision. "This does not assist Wallace, however, because his legal theory is faulty substantively."

Perhaps most significantly, Wallace had not contended that software available under the GPL would lead to mononpoly prices in the future. The court observed the anomalous thinking behind any conclusion that it would, "when the GPL keeps price low forever and precludes the reduction of output that is essential to monopoly."

And the opinion provided a number of modern day examples to dispel any thoughts of a GPL monopoly, by observing the market domination of proprietary operating systems like Windows, OS X and Solaris even when Linux is available for free. It also obseverd, quite astutely, that Photoshop is preferred in the market to Gimp, and Lexis and Westlaw are preferred to free legal sources such as the court's own website.

Calling the defendants "conspirators" in violation of the Sherman Act didn't advance the plaintiff's case either. Instead of being a restraint on trade, the court held that the GPL serves to foster creativity, by enabling the free distribution and building of new derivative works.

Wallace v. IBM, No. 06-2454 (7th Cir., November 9, 2006).


TOPICS: Technical
KEYWORDS: antitrust; opensource

1 posted on 11/09/2006 5:30:56 PM PST by ShadowAce
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To: rdb3; chance33_98; Calvinist_Dark_Lord; Bush2000; PenguinWry; GodGunsandGuts; CyberCowboy777; ...

2 posted on 11/09/2006 5:31:18 PM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce

Yeah well... Open Source is just plain un-American!

Viva la paid programmers!


3 posted on 11/09/2006 5:37:46 PM PST by Incorrigible (If I lead, follow me; If I pause, push me; If I retreat, kill me.)
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To: Incorrigible

LOL!


4 posted on 11/09/2006 5:40:48 PM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce
http://www.freerepublic.com/focus/f-news/1735733/posts
5 posted on 11/09/2006 5:42:56 PM PST by snowsislander
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To: ShadowAce
And the opinion provided a number of modern day examples to dispel any thoughts of a GPL monopoly, by observing the market domination of proprietary operating systems like Windows, OS X and Solaris even when Linux is available for free.

So, there can not be a GPL/Linux monopoly because there are lots of competitors in the OS marketplace, such as Windows, OS X, and Solaris.

OK, I get that part. Now, tell me again, if there was all of this competition in the OS marketplace, why was Microsoft accused of being a monopolist? (Rhetorical question only - I fully understand the Demo/Commie politics that led to Microsoft's legal troubles)...

6 posted on 11/09/2006 5:44:26 PM PST by Zeppo
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To: Zeppo

Well, the response of those who supported the Microsoft litigation would be that Microsoft doesn't face the same levelof competition relative to their market share as does Linux. IOW, how can Linux be a monopoly when it isn't the biggest player in it's market.


7 posted on 11/09/2006 6:21:51 PM PST by Still Thinking (Quis custodiet ipsos custodes?)
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To: Still Thinking
You have exposed the key problem with the Microsoft antitrust allegations - the government figuratively had its thumb on the scale when it defined the market. They defined it in precisely the way that made Microsoft a monopolist. Sure, they had expert testimony to back up their claim, but expert testimony is often a sham (full disclosure: I have acted as an expert witness in a computer-related case that actually had a Microsoft-among-the-investors company as a defendant - I was an expert witness for the other party).

Laws that permit the government to invent the 'crime' after the fact, knowingly custom-tailored by the government to make the company or person on trial automatically 'guilty' from the get-go, are an un-American abomination.

8 posted on 11/09/2006 6:39:00 PM PST by Zeppo
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