Home > Legal > SCO’s Suit: A Match Made in Redmond? SCO’s Suit: A Match Made in Redmond? Eugenia Loli 2004-03-11 Legal 37 Comments Just as the legal battle over Linux was about to become even more expensive, Microsoft suggested that a hedge fund invest in the outfit. Read the report at BusinessWeek and at News.com. About The Author Eugenia Loli Ex-programmer, ex-editor in chief at OSNews.com, now a visual artist/filmmaker. Follow me on Twitter @EugeniaLoli 37 Comments 2004-03-11 7:44 pm Microsoft would be foolish to not take all the steps necessary to abolish a competitor. It’s the capitalist way. 2004-03-11 8:05 pm Do you mean, also illegal/unethical steps ? OK. I would be foolish to not take all steps necessary to beat someone on the street and steal all his money. If only no one sees it…. 2004-03-11 8:06 pm It is not “THE” capitalist way! In THE capitalist way, you innovate to be competitive, you don’t abolish the competitor. Saying it’s the capitalist way is just like saying an armed robber is exercising his freedom. 2004-03-11 8:19 pm “Microsoft would be foolish to not take all the steps necessary to abolish a competitor. It’s the capitalist way.” Sorry John but you kind of asked for this. That statement makes no sense. You can still compete and win without resorting to cheating. In a race you will win by shooting everyone that gets in front of you but it doesn’t make you a winner by its definition and it certainly doesn’t make you the best. MS does not need to resort to these tactics. Linux has a long way to go and has attained a minority marketshare on the server and certainly no real desktop marketshare. 2004-03-11 8:21 pm The capitalist way is to build it better and more efficiently in order to make money. Market forces, independant of governmental controls drive price. The Cut-Throat way is to decimate your competition – which is what Microsoft and non-capitalists do. Market wise, Microsoft is in a good position as long as common and needed apps are being made mainly for a MS Windows platform. How they got there is not capitalistic in many ways, but when app builders for Linux and other OSs can put together competitive and effective products, MS will see more of it’s business migrate. Novel lost to MS because 1: MS offered lower prices, 2: could be used on non-prorietary hardware, 3: adapted to support it’s competitors and thus offered a reasonable alternative to Novel. Now, MS is looking at proprietary means to maintain it’s control, attempting to limit the adaptability of it’s competitors, and is watching it’s competitor (linux) go through litigation hell. It the latter fails, then I do believe more people will have confidence in switching to Open Source and Free Software and app makers may look at that platform with a new eye. Similar to why people don’t program for C64s now. There is no viable market. As Linux, for example, grows, it will become a more viable market. Yet, in order to get there, it needs people and companies to take the risk of failure in that market to program for it. Right now, there are not very many out there and I think a lot of that has to do with FUD regarding making a profit – which is why anybody works. 2004-03-11 8:24 pm According to the article. I have to wonder how smart this move was by SCO. I’d say if they don’t win, they’re finished. And even if they do when, they’re still finished – only with $5 billion in their pocket. So I guess you really could say that SCO is ‘betting the company’ on this lawsuit 2004-03-11 8:30 pm “So I guess you really could say that SCO is ‘betting the company’ on this lawsuit ” Definitely, if I was Blake Stowell or one of these other guys, I’d be looking for a way out before it’s too late. BTW, does he remind anyone else of the former Iraqi Information Minister? 2004-03-11 9:06 pm Haha… “BTW, does he remind anyone else of the former Iraqi Information Minister?” Thats a good one… 2004-03-11 9:13 pm It ain’t the “capitalist way” when the DOJ convicts you for monopolistic practices. Capitalism is about competing within a framework of rules. The rules are minimal, yet fundemental. Competing by ignoring the rules, which is what Microsoft likes to do, is how people would behave in the state of nature. 2004-03-11 9:28 pm It is neither illegal nor unethical to support your enemy’s enemies. When/if Linux is out of the way, MS will go after SCO and anybody else who is a threat to them. Someone made a comparison to a robber. That analogy is false. A robber takes what he wants by force. Microsoft is not putting a gun to your face. Microsoft is positioning it self in such a way as to maximize it’s money making potential. Although I, personally, do not support Microsoft’s business practices, I do support their right to make as much money as they can (legally). Capitalism the is survival of the fittest. 2004-03-11 9:31 pm That’s cute. The United States Government “declared” them a monopoly. We all know that if they would not have been punished if they had not done anything wrong. Care to state what concrete, objective criteria a company has to meet to be considered and punished for being monopoly? 2004-03-11 9:31 pm //Someone made a comparison to a robber. That analogy is false. A robber takes what he wants by force. Microsoft is not putting a gun to your face. Microsoft is positioning it self in such a way as to maximize it’s money making potential.// Extremely well put. I no big fan of MS myself, but I don’t see ANYTHING ILLEGAL about this. Just more fuel for anti-MS shills. 2004-03-11 9:39 pm The general misconception ist that MS is being punished for being a monopoly. It’s not the case. MS is being punished for using their monopoly as leverage to dominate other markets eg. from the OS market to the browser market. Using an already existing monopoly in one market as leverage to dominate another is a violation of anti trust laws. Some of us are tired of explaining this again and again. 2004-03-11 9:40 pm interesting that you would choose the name John Galt and have such an apparent lack of understanding of capitalism. I seriously doubt Ayn Rand would condone Microsoft’s behavior in this regard, particularly because of it’s anti-capitalistic nature. If MS were to be compared to any Rand character I should think they would be much closer to Peter Keating in The Fountainhead; lacking any real vision of their own, happily accepting other’s work (even taking credit for it), confusing financial success and popular acclaim with real skill and technical excellence. Perhaps you need to go back and read “Atlas Shrugged” again; I think you missed the point… 2004-03-11 9:41 pm microsoft doesn’t care about the anti trust laws of the united states – and this isn’t illegal? and what about the ethical aspect? 2004-03-11 9:44 pm Capitalism is merely about the ability of any individual or group to produce it’s own form of “monetary” exchange. What you are all describing is “market economics”. A truly free market economy is known never to succeed because you end up with one massive individual or organisation which uses its “muscle” to ensure that it is the only participant in any given market. This is why you have regulators. These regulators are what appear (to me) to be missing from the current desktop software market. I am no economist, but I believe I have the basics right. Cheers. 2004-03-11 9:48 pm “Care to state what concrete, objective criteria a company has to meet to be considered and punished for being monopoly?” That’s easy. If a Federal judge declares you a monopoly, then you are. Don’t take our word for it. Here’s what he said: Most harmful of all is the message that Microsoft’s actions have conveyed to every enterprise with the potential to innovate in the computer industry,” Judge Jackson wrote in his 207-page findings of fact. “Through its conduct,” he added, “Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft’s core products.” http://www.nytimes.com/library/tech/99/11/biztech/articles/06soft.h… 2004-03-11 10:19 pm //Perhaps you need to go back and read “Atlas Shrugged” again; I think you missed the point…// Funny, that wasn’t required reading in any of my Econ classes … 2004-03-11 10:31 pm i don’t think you guys understand the purpose of antitrust laws or free market economics. Smith’s idea was that market forces (aka: competition) would be the most effective and efficient means to “regulate” a market. He did not favor complete hands off do whatever you want market forces like the “free marketeers” claim. Now the purpose of the antitrust act is to ensure that competition is there in order to regulate that market so that gov. need not do it. their point is that one company can become so powerful that the free market’s regulatory framework (competition) fails. hence the law is there to stimulate competition. MS has violated terms of the antitrust law. That is the law of the land. Any law can be challenged. I think the antitrust law should, if anything, be enforced more vigorously. I was not, however, in favor of breaking up MS. 2004-03-11 10:45 pm [golf clap] for Lisieux. If the Federal Government said it’s so, it MUST be so. Don’t your DARE question the Federal Judge/Government. I’m glad you’re dispensing with independent thought. Some people were not meant to think for them selves. Here’s a hint – there is no concrete criteria for determining what company is a monopoly and which is not. That’s the problem with the Feds “declaring” some entity a monopoly. It’s based purely on the whim of the administration in charge. re. screwjack: I never said that MS is the shining example of capitalism and your comparison to Peter is a good one. Point is, MS is not braking any laws by doing what they’re doing. It’s up to the CONSUMER to NOT WANT to deal with an unethical entity. Then again, ethics (and philosophy in general) seem to have little if any influence on people. And that is sad. 2004-03-11 11:05 pm “[golf clap] for Lisieux. If the Federal Government said it’s so, it MUST be so.” Guess you don’t understand how this works. He’s a Federal judge. Not only does he get to make that determination, but you and I pay him to do that. So no matter how upset you are that Billy got picked on, you helped make it happen. And being a slavish follower of Microsoft hardly qualifies you of showing independent thought. 2004-03-11 11:22 pm I must’ve misinterpreted what you originally posted. MS may not be breaking any laws, but to conduct themselves in such a way as to inhibit the growth of a potential rival in order to avoid head-to-head competition based on merits strikes me as an anathema to capitalism. mostly I was just excited to find someone else obviously familiar with Rand and was compelled to show off. 2004-03-12 12:17 am @John Galt: There is a lot of wiggle-room in determining what is and is not a monopoly. That’s because a monopoly is not an all-or-nothing affair. There are many markets (for example, brand-name clothing) that are in a state of “monopolistic competition” where they have elements of both monopolistic and competitive markets. Judges decide when a company has crossed over to being a monopoly, and more importantly, when they have done so and at the same time used that monopoly power to gain a competitive edge in other markets. If you don’t agree with the judge’s conclusion, please point to specifically what you disagree with. @ryan: You are absolutely right, but I have to point out that most modern “free marketers” would have no problem with anti-trust laws. Economic theory says that a competitive market allows for efficient production — ie: generates the most value for the resources expended. The theory also shows that there are a few cases where the competitive market does *not* allow efficient production. Monopolistic markets are one of these cases. A monopoly market produces less value from a given input of resources than does a competitive market. Anti-trust laws thus fall naturally out of the theory. 2004-03-12 12:23 am You are right, the robber analogy is not appropriate. The hit-man analogy, however, is quite fitting. As everyone knows, under our laws, both the hitman and the person who hired the hitman are implicated in the crime. Also, given that they are a monopoly, our laws say that Microsoft does *not* have the right to do whatever they want to maximize their profit-making potential. I’m not quite sure if the details of the SCO case are such that they would be over-stepping their bounderies, but I wouldn’t be surprised if that were the case. In any case, even if its not illegal, its more evidence that Microsoft is morally bankrupt. In the past, they’ve posted outright *lies* about the GPL on their website. For example, they said something to the tune of “you can’t use (certain MS embedded developer tools) with GPL code because that would require our code to be GPL’ed.” There is a very legitimate reason why the term “FUD” is so closely associated with Microsoft. In classic style, the FUD machine is at it again. 2004-03-12 12:26 am Micro$oft is a digital and economic thug. They have done similar deeds in the past and their Republican friends in the current administration let them off the hook. But they can’t maintain their position with these tactics forever. Someday market forces will begin to cut them down to size. 2004-03-12 12:58 am yes that is true. Some markets are natural monopolies. I think that brings up an interesting question. is the desktop operating system market a natural monopoly? Some might argue that it is due to the realities of software development, training, need for compatibility, etc. Of course if it was a natural monopoly then you really have to wonder about MS’ bully tactics. 2004-03-12 1:21 am Yes, there are markets that properly and ehtically support natural monopolies. Gas, electricity, local water, most municipal services for example. But operating system software a legitmate natural monopoly? Don’t think so. Not legally at any rate. 2004-03-12 1:37 am anyone noticed how much off a knock the SCO stock has taken of late. It now below $10. It seems investors are now not buying their story. This when they raised the suit amount to $5bn. You would have thought the stock would rise, but no. I love this. 2004-03-12 2:11 am Extremely well put. I no big fan of MS myself, but I don’t see ANYTHING ILLEGAL about this. That’s because you’ve never looked up the definition of “maintenance” in a law book: “Law. The unlawful meddling in a suit by providing either party with the means to carry it on.” http://dictionary.reference.com/search?q=maintenance&db=%2A 2004-03-12 3:14 am You might wish to learn a little about anti-trust law, and the Federal government as well (specifically the separation of powers doctrine and Article III of the U.S. Constitution regarding the Federal judiciary). 2004-03-12 6:20 am Isn’t that the American way – rub out competition in any way legal or otherwise? It stinks. 2004-03-12 6:22 am Shouldn’t that be made in Hell? 2004-03-12 12:56 pm Supposedly, Royal Bank of Canada bought $30M or the $50M worth scox’s shares. Yet, in every article of this kind, any mention of RBC is omitted. Why? There was another NYT article about this issue just released today. Again, no mention of RBC. Why do they always tip-toe around this issue? It’s sort of like the elephant in your living room. Msft loadly asserts that msft has nothing to do with BayStar, but msft doesn’t say a word about RBC – the silence if deafening. 2004-03-12 5:01 pm I am not a lwayer, but conceivaly, ti could be dangerous for Microsoft to say they did not have anythign to do with Baystar, because it could be used against them later. If it blows over, then no problem. 2004-03-12 5:58 pm No it can’t be. This is making soaps look like they don’t drag stuff out. 2004-03-13 1:28 am Linux is capitalism’s response to Microsoft! In a free society people will naturally band together voluntarily for self benefit and protection. Many people have worked on Linux for the right to have a choice. Many other people work on Linux because they do get some benefit from the projects. The open source in the only method of advancing software that Microsoft has no purchase against. Microsoft is now large enough that they can swat any competitive start up software firm. However it does them no good to swat companies dealing in GPL software because – three new companies will spring up in their place. This why they fund SCO – though they still have not fully grokked the foe they face. It is not Linux it is in fact the very open source movement itself. It is people all over the world taking control over their computers. Some do it for profit only some do it because they hate Microsoft, many do it to have control of their computers themselves. All these actions Microsoft are only delaying actions. In reality Microsoft laid the seeds to their own destruction themselves when they tried to capture and control 100% of the market. Free markets abhor a monopoly and given a little time and freedom will move to dismantle them. 2004-03-13 7:27 am Yes couldn’t agree more, the actions of MS, make it its own worst enemy.