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Re: Hey Terekhov: Wallace lost. Who'd guess.... ;)

From: David Kastrup
Subject: Re: Hey Terekhov: Wallace lost. Who'd guess.... ;)
Date: Thu, 18 May 2006 12:37:11 +0200
User-agent: Gnus/5.11 (Gnus v5.11) Emacs/22.0.50 (gnu/linux)

Alexander Terekhov <> writes:

> David Kastrup wrote:
>> Alexander Terekhov <> writes:
>> > David Kastrup wrote:
>> > [...]
>> >> > Wallace brought forth the GPL. The GPL is his evidence.
>> >>
>> >> Yes.  No facts compatible with his claim of predatory pricing.
>> >
>> > And how do you know?
>> By virtue of having a brain. 
> Here's an exercise for your brain. First, I'll address your remark in 
> reply to mini-RMS:
> | > But of course, in Therekovian there's only one incentive for "life":
> | > getting money.
> | 
> | Last time I looked, RedHat was getting money.
> This fact is compatible with Wallace's claim of predatory pricing 
> conspiracy pursuant to the GPL. Those ancillary revenues from "no 
> charge" GPL'd code can NOT "explain the lengths to which" 
> Microsoft^H^H^H^H^H^H^H^HRed Hat "has gone" (see below). It could
> have been BSD and alike licensed code in its entirety which Red Hat
> could have used to produce those ancillary revenues, and Wallace 
> doesn't have any problems with RedHat's use of BSD and alike 
> licensed code which doesn't price-fix IP at predatory level.

Reality check: bundling BSD and alike licensed code is, for example,
the business model of Theo de Raadt.  His earnings are utterly peanuts
compared to those of RedHat.

> The Judge in Microsoft antitrust case ruled:
> "Proof that a profit-maximizing firm took predatory action should 
> suffice to demonstrate the threat of substantial exclusionary effect; 
> to hold otherwise would be to ascribe irrational behavior to the 
> defendant. Moreover, predatory conduct, by definition as well as by 
> nature, lacks procompetitive business motivation.

But you are glossing over the fact that there is hardly a more
competitive market than the Linux market.  It has hundreds of
participants and a very low barrier of entry.

> Note that Wallace's case is an action under § 1 of the Sherman Act.

"purports to be" rather than "is".

> The anticompetitive nature of the GNU GPL is no-brainer.

That must explain why there is _lots_ of competition in the Linux

> The GNU project was designed to be anticompetitive.  Go read the GNU
> Manifesto.

It does not say anything like that.

Here are a few quotes:

     Complete system sources will be available to everyone. As a
     result, a user who needs changes in the system will always be
     free to make them himself, or hire any available programmer or
     company to make them for him. Users will no longer be at the
     mercy of one programmer or company which owns the sources and is
     in sole position to make changes.

Releasing the dependence on a particular programmer or company creates
rather than curbs competition.

     We must distinguish between support in the form of real
     programming work and mere handholding. The former is something
     one cannot rely on from a software vendor. If your problem is not
     shared by enough people, the vendor will tell you to get lost.

Where is competition if a vendor can tell you to get lost?

    If your business needs to be able to rely on support, the only way
    is to have all the necessary sources and tools. Then you can hire
    any available person to fix your problem; you are not at the mercy
    of any individual.

Where is not being at the mercy of a single provider anticompetitive?

    Such services could be provided by companies that sell just
    hand-holding and repair service. If it is true that users would
    rather spend money and get a product with service, they will also
    be willing to buy the service having got the product free. The
    service companies will compete in quality and price; users will
    not be tied to any particular one. Meanwhile, those of us who
    don't need the service should be able to use the program without
    paying for the service.

Here Stallman actually talks about "compete".

> "GNU will remove operating system software from the realm of
> competition. You will not be able to get an edge in this area, but
> neither will your competitors be able to get an edge over you. You
> and they will compete in other areas, while benefiting mutually in
> this one. If your business is selling an operating system, you will
> not like GNU, but that's tough on you. If your business is something
> else, GNU can save you from being pushed into the expensive business
> of selling operating systems."

Looks like Stallman was wrong about that one: while one can't _secure_
an edge over competitors, _getting_ an edge is what the distributions
are all about.

> So once again, please tell me what's wrong with Wallace's claim of
> predatory pricing as explained below.

It clashes with the fact that there is lot of competition going on in
the Linux market, and that RedHat _turns_ a profit in the operating
system business and is not operating at a loss.

> Not only competitors are harmed by the GPL scheme. Consumers lose
> because a lack of competition removes not just product choice but
> without competitive reward the incentive to improve product quality
> disappears.

The problem is that you and Wallace are living in a fantasy world.
The competition is alive and kicking.

> When we analyze case (ii) “pricing below some appropriate measure of
> cost”

RedHat is profitable.

> The GPL’s term 2(b) is without question direct evidence of a
> below-cost pricing scheme.

No, since you are allowed to charge any amount you want for the
product.  You are just restricted in your choice of license.

David Kastrup, Kriemhildstr. 15, 44793 Bochum

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