November 12th, 2006 by Adam
In a remarkably obscure law suit, the Free Software Foundation, Novell and Red Hat have all been sued by Daniel Wallace over accusations of price fixing and uncompetitive practices. His reasoning: These companies all distribute software for free.
At initial glance, the lawsuit seems plainly ridiculous since laws against price fixing are there to protect consumers and keep prices at a minimum. However, it is a warning bell showing just how much of an impact open source software (in particular, Linux) is having on the software market. If you think of the charges in terms of anti-competitive terms, companies working together to produce free software could in theory be construed as anti-competitive – who can compete with a free product in terms of price?
Of course, should a ruling like this be held up in court, the implications would be massive. Producers of free software would be sued left, right and centre because their potentially superior software is keeping companies from making money. Of course, the commercial developers actually have the money to sue the free software developers. This could have been a disaster for the global software market.
Fortunately, the judge involved in the case found in favour of the free software companies – in a sense telling Wallace that he had tried to manipulate the meaning of antitrust law to serve his own purposes. The case was thrown out, and the judge made the following comment:
“The GPL and open-source software have nothing to fear from the antitrust laws.”
So, we can all breathe a sigh of relief and go back to our free softwares. You can read full details of the story here but I thought this was a particularly noteworthy story – the potential outcome from the case could have massive implications and if you actually think about the specific wording of the law (and cast aside common sense for a moment or two), maybe the case actually had something in it. In this case, fortunately the judge did think about the wider implications and sent Wallace packing. It’s a shame there wasn’t a similarly inclined judge during the passing of EU Data Retention laws!