Nine states and the entire Linux crowd continue to cry foul at Microsoft for engaging in what they consider ÒunfairÓ and ÒanticompetitiveÓ business practices. The Justice department won that case nearly two years ago; give it a rest already. Still, I recognized the hypocrisy in many of the statements made by these professional protestors and I asked myself, ÒWhat about the Linux distributors?Ó IÕm here to tell you that Red Hat, SuSE, Mandrake, and all the other Linux distributors have engaged in unfair and anticompetitive business practices, too.
Cartel (kŠr¥tel«) ø an international combine formed to regulate prices and output in some field of business. ThatÕs what Linux is, a cartel. GNU/Linux is an international movement comprised of thousands of people (read, Òa combineÓ) formed to regulate prices and output in the software business. GNU/Linux regulates the price by mandating free redistribution and regulates the output by mandating publicly accessible source code.
Usually, a cartel, like the Organization of Petroleum Exporting Countries (OPEC), would act in ways that harms the consumer for its own gain. For example, OPEC frequently cuts production to raise prices, which benefits the oil producers but harms the consumer. In the case of the Linux Cartel, however, the opposite is true. The product is available for free, and anyone can ensure a high-quality output by reviewing the source code. Furthermore, the Linux Cartel hurts the members of the Cartel (i.e. the producers, or programmers) by denying them financial compensation for their work.
ÒSo what?Ó you say. ÒTheyÕre doing some good. WhatÕs so bad about that?Ó Even though the Linux Cartel may be a benevolent one, the Linux Cartel is still illegal on three legal grounds:
First, the law doesnÕt care whether or not a cartel is benevolent and good-hearted. The Clayton Act, part of several laws covering unfair competition, uses what the United States Supreme Court calls a Òper se rule.Ó A per se rule means that actions or outcomes can be violations of the law whether the result is reasonable or not. In other words, it doesnÕt matter that consumers benefit and producers suffer from the Linux Cartel. A cartel is a cartel.
Second, the Robinson-Patman Act, another part of law covering unfair competition, prohibits producers from selling a product below cost. After all, some big conglomerate could sell a product below cost to exterminate the small businesses and could afford to lose money whereas small businesses could not. This is one form of unfair competition. Now, how much do you think it cost the Red Hat Corporation to produce Red Hat Linux 7.2? Remember now, Red Hat is giving Linux away for free. Free is way, way below cost. Where do you think that hundreds of millions of dollars in debt came from - Expensive office supplies? It came from, and continues to come from, selling a product for less than it costs, free.
Third and most important, the Robinson-Patman Act measures the effects of unfair and anticompetitive business practices not by harm to consumers but by harm to competitors. Do you think the Linux Cartel in giving away a competing operating system has harmed Microsoft? Yes, most definitely. By MicrosoftÕs own estimates, the Linux Cartel controls roughly ten percent of the server market (an estimate which Linux supporters accuse of being low), ten percent that could have belonged to Microsoft. Damage of this magnitude would be in the hundreds of millions of dollars, possibly even in the billions of dollars.
I think Microsoft should counter-sue any whining, monopoly-accusing company with MicrosoftÕs own lawsuit accusing them of unfair and anticompetitive business practices. Give them a taste of their own medicine. LetÕs see how much everyone wants to gang up against Microsoft when Redmond really starts fighting back.
Joseph Wagner (technojoecoolusa@yahoo.com) is an independent consultant and developer in Michigan.
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