Re: [Fsfe-uk] GPL and new EU antitrust proposals for licences

[ian]

On Wed, 2003-12-03 at 20:50, James Heald wrote:
> (1) I'm not sure whether I'm posting this to the right place, and (2) 
> there's probably nothing to worry about anyway;
> 
> -- But: has anybody checked the GPL against the proposed new EC 
> antitrust regulation on technology transfer and licencing ?
> 
> http://europa.eu.int/comm/competition/antitrust/legislation/draft_technology/regulation_en.pdf
> 
> The draft regulations were published in October (I think) and the 
> official consultation period has just closed (26th November).
> http://europa.eu.int/comm/competition/antitrust/legislation/entente3_en.html#technology
> 
> For the first time, the new regime is explicitly intended to apply to 
> copyright licencing as well as patent licensing.
> 
> 
> At issue is Article 81(1) of the EC treaty, and regulated exemptions to it.
> http://europa.eu.int/comm/competition/legislation/treaties/ec/art81_en.html
> 
> > The following shall be prohibited as incompatible with the common market: 
> > all agreements between undertakings, decisions by associations of 
> > undertakings and concerted practices which may affect trade between Member 
> > States and which have as their object or effect the prevention, restriction 
> > or distortion of competition within the common market, and in particular 
> > those which:
> > 
> > (a) directly or indirectly fix purchase or selling prices or any other 
> > trading conditions;
> > 
> > (b) limit or control production, markets, technical development, or 
> > investment;
> > 
> > (c) share markets or sources of supply;
> > 
> > (d) apply dissimilar conditions to equivalent transactions with other 
> > trading parties, thereby placing them at a competitive disadvantage;
> > 
> > (e) make the conclusion of contracts subject to acceptance by the other 
> > parties of supplementary obligations which, by their nature or according to 
> > commercial usage, have no connection with the subject of such contracts. 
> 
> and 81(3):
> > The provisions of paragraph 1 may, however, be declared inapplicable in the 
> > case of:
> > 
> > - any agreement or category of agreements between undertakings;
> > 
> > - any decision or category of decisions by associations of undertakings;
> > 
> > - any concerted practice or category of concerted practices,
> > 
> > which contributes to improving the production or distribution of goods or 
> > to promoting technical or economic progress, while allowing consumers a 
> > fair share of the resulting benefit, and which does not:
> > 
> > (a) impose on the undertakings concerned restrictions which are not 
> > indispensable to the attainment of these objectives;
> > 
> > (b) afford such undertakings the possibility of eliminating competition in 
> > respect of a substantial part of the products in question. 
> 
> 
> Could it conceivably be argued that prima facie the terms of the GPL 
> might somehow be a restriction of freedom under 81(1)(a), 81(1)(b) or 
> 81(1)(e)  ?

Can't see why. The GPL is not fixing a price. Anyone can charge for
FLOSS at whatever rate they like, there is no fixed price, its just
freely available - like air. I can't see how the GPL controls
production, markets or investment. Anyone can invest in GPL'd software.
No-one is being put at a competitive disadvantage because of GPL'd
software i that they are free to GPL their software it they think it
will be commercially better for them. The terms of the GPL are directly
related to the subject matter so I can't see that as a problem either.
I'm not a lawyer though so it might be worth checking with someone who
is. I suspect that if the GPL is in violation, so is every EULA on every
product.

> 
> The proposed new regulations set out conditions for technology transfer 
> licences to fall under a block exemption to 81(1), issued persuant to 81(3).
> 
> (It is also possible, I think, to have seek a special exemption from the 
> Commission's DG competition for a particular agreement)
> 
> 
> The clause in the proposed exemption which particularly caught my eye is
> Article 5(1) condition (b):
> 
> The exemption provided for in Article 2 shall not apply to any of the 
> following obligations [[ie the following could be *invalid* on antitrust 
> grounds]]:
> 
> (b) any direct or indirect obligation on the licensee to assign, in 
> whole or part, or to a third party designated by the licensor, rights to 
> improvements to or new applications of the licensed technology.
> 
> Could this affect the GPL ??
> 
> 
> The antitrust exemption also can only be invoked by competing parties if 
> their combined market share is below 20%, or non-competing parties if 
> their individual share in each market does not exceed 30% (Article 3 of 
> the proposed new regulations); but as those shares are if possible to be 
> measured by market value, rather than market volume (Article 8), this 
> shouldn't be an issue.

MS has 90% + market and is not in violation of any of this simply
because of this monopoly. They have to be demonstrated to be using that
share to skew the market for competitors. eg in Schools agreement its
arguable that requiring licenses by the number of Pentiums is in
violation of (e) because a pentium processor has nothing to do with the
software. They could say you have to pay a license for each PC running
Windows or *any* MS software, but not for a machine running say
GNU/Linux - yet the latter is currently the situation which is why I
think that the current OFT case will go against them. Its not a crime to
have a monopoly it is to use it to block competition by requiring
"unconnected conditions" and this is clearly the case with MSSA. I can't
see how GPL'd software would fall foul of this even if all computers
used it and it had 100% monopoly. It isn't stopping anyone putting
commercially licensed software on a computer or putting competition at a
disadvantage except on price, and if that is a criterion you don't have
a competitive market at all because all software would have to be the
same price.

> It may be that I'm fretting about nothing... but I'd more more 
> comfortable if I knew that somebody who knew about these things had 
> looked over the proposals while they are still proposals, before they 
> harden into law.

At first sight, these things don't seem a lot different form the 1998
Competition Act. All I can say is that if the GPL is screwed MS EULAs
will be doubly so.

-- 
ian <address@hidden>