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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: Sat, 20 May 2006 15:45:12 +0200
User-agent: Gnus/5.11 (Gnus v5.11) Emacs/22.0.50 (gnu/linux)

John Hasler <> writes:

> Alexander Terekhov writes:
>> As for proof, "A plaintiff must prove (1) that the prices complained
>> of are below an appropriate measure of its rival's costs
> The marginal cost of production of copies of Linux is at most the cost of
> pressing a DVD.  The marginal cost of granting a GPL license is zero.
>> and (2) that the competitor had a reasonable prospect of recouping
>> its investment in below cost prices."
> David Kastrup wrote:
>> Basically, the standard demands proving that the prices must be both
>> below cost as well as profitable.
> What they mean is that the plaintiff must prove that if the defendant
> succeeded in driving him out of business with predatory pricing he would
> subsequently be able to recoup the money he lost selling below cost by
> selling at the elevated price he would be able to demand as a result of
> having disposed of his competitor.

That is not the only option for profiting from a crashing market.  You
can buy out your competitor at cheap prices, for example.  You can get
rid of him in another market segment where he is providing too much
competition.  And the investment need not be large: you can do this by
announcing vaporware and thus freeze the customers' willingness to pay
current market prices.

The problem is that the FSF is a registered charity and not even able
to turn a profit.  Another is that it is not operating at a loss even
though it does nothing except distributing and organizing free

And RedHat turns profits in its core business of selling operating
system copies, with their developers' "intellectual property" on them.

> Of course, this is irrelevant because Linux vendors are not selling
> below cost by any measure, nor are they competing with Wallace.

Oh, one could argue that they are competing with Wallace's purported
business plan.  If that were the only requirement, Wallace would have
a reasonable chance to make it to trial.

> On Groklaw there was some speculation that Wallace had a legal
> advisor.  Perhaps we have found him.

It would certainly explain why Terekhov is fawning over rather
pointless or downright stupid passages in Wallace's ramblings.

David Kastrup, Kriemhildstr. 15, 44793 Bochum

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