Linux Networks & the Competition Act (Was: Fwd: [d at DCC] Competition Act)

[Scott Elcomb]

I suggested to Darryl that TLUG has some respectable thinkers who
might have some thoughts or advice on this.  Any takers?

---------- Forwarded message ----------
From: Darryl Moore <darryl-90a536wCiRb3fQ9qLvQP4Q at public.gmane.org>
Date: Tue, Jun 16, 2009 at 9:16 AM
Subject: [d at DCC] Competition Act
To: d at dcc <discuss-WolORMuebV4TBNh8kXeBKqyvx2GgBOVq930Pai70D+E at public.gmane.org>


Hi List.

I'm posting this here because I know there are a lot of people on this
list who care about fair IP laws, and fair business practices. Many of
them are Linux fans as well. The linux lists I subscribe too are all
technical lists with few people that have an interest in legal issues.
Particularly Canadian ones.

If you do not care about Open source or violations of the Competition
Act, then read no further and I apologizes for spamming your mailbox.


I am trying to build a full featured native Linux network for
businesses. One of the difficulties I will have in selling such a
network, obviously, is the dominance of Microsoft operating systems.
Note the following.

(1) Because of their virtual monopoly, just about all companies will
have at least one software package that can only run under windows.

(2) Many small companies use only the version of windows that came on
the machine when purchased.

(3) Due to MS market dominance, MS can insist upon payments from OEMs
for their software, and third party software vendors are willing to pay
to have their MSWin compatible software included in OEM machines. The
net result is that the cost of windows on a OEM machine is effectively
negative, as can be witnessed when doing online price comparisons.

(4) MS EULA prohibits the insertion of virtual machine software between
the physical hardware and the operating system on low end OEM supplied
operating systems. This effectively eliminates the ability for Linux (or
other OSes) to compete (see point 1)


The last point I believe meets the definition of tied selling under the
competition act

77. (1) For the purposes of this section, "tied selling" means
(a) any practice whereby a supplier of a product, as a condition of
supplying the product (the "tying" product) to a customer, requires that
customer to
(ii) refrain from using or distributing, in conjunction with the tying
product, another product that is not of a brand or manufacture
designated by the supplier or the nominee, and

In this case customers are being prohibited from using Linux and virtual
machine software in a reasonable way with the Windows operating system
they purchased. The prohibition of installing Linux and running the
supplied Windows operating system inside linux on the same machine has
the effect of significantly reducing the appeal of linux.

The MS EULA convieniently refines hardware to include a software
environment provided by VM software. I do not believe this is valid. It
is an effective prohibition on using VM software and alternate operating
systems contrary to section 77(1)(ii). It is no different really than
specifying that MS windows cannot be used with Norton AV for example,
which would be an obvious violation.

section 79 of the act states that a dominant company that engages in
this practice and negatively affects the market is in violation of the act.

I want to lodge a complaint with the Competition Bureau to this effect,
but I need 5 other people to sign it.

If anyone else here agrees with the above and wants to participate
please reply either privately or in this list.


Thanks,
Darryl Moore
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-- 
  Scott Elcomb
  http://www.psema4.com/   @psema4
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