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Re: IBM's appellee brief in Wallace case

From: Alexander Terekhov
Subject: Re: IBM's appellee brief in Wallace case
Date: Thu, 20 Jul 2006 11:51:10 +0200

Alabama Petrofsky wrote:
> also 42nd Parallel, 286 F.3d at 406 ("In considering a motion to 
> dismiss, the court is not required to don blinders and to ignore 
> commercial reality.") (quoting Car Carriers, 745 F.2d at

I gather that this is directed at defendant's own "don blinders" 
such as "negatively priced" GPL software, the claim that GPL 2b is 
a nonprice restraint (must by something territorial, I gather), and 

As for proving predation under Brooke (pricing below cost and 
"dangerous propability" of recoupment), Wallace already addressed
both elements. Consider also the following:

"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. See Aspen Skiing,
472 U.S. at 610-11 (evidence indicating that defendant's conduct was
"motivated entirely by a decision to avoid providing any benefits" to
a rival supported the inference that defendant's conduct "was not
motivated by efficiency concerns"). In other words, predatory behavior
is patently anticompetitive. ... Microsoft has no intention of ever
charging for licenses to use or distribute its browser. Id. ¶¶ 137-38.
Moreover, neither the desire to bolster demand for Windows nor the
prospect of ancillary revenues from Internet Explorer can explain the
lengths to which Microsoft has gone. In fact, Microsoft has expended
wealth and foresworn opportunities to realize more in a manner and to
an extent that can only represent a rational investment if its purpose
was to perpetuate the applications barrier to entry. Id. ¶¶ 136,
139-42.  Because Microsoft's business practices "would not be
considered profit maximizing except for the expectation that . . .
the entry of potential rivals" into the market for Intel-compatible
PC operating systems will be "blocked or delayed," Neumann v.
Reinforced Earth Co., 786 F.2d 424, 427 (D.C. Cir. 1986), Microsoft's
campaign must be termed predatory. Since the Court has already found
that Microsoft possesses monopoly power, see supra, § I.A.1, the
predatory nature of the firm's conduct compels the Court to hold
Microsoft liable under § 2 of the Sherman Act."

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

The anticompetitive nature of the GNU GPL is no-brainer. The GNU
project was designed to be anticompetitive. Go read the GNU 


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