[wplug] Open source withstands antitrust scrutiny

[Zach]

http://www.internetcases.com/archives/2006/11/open_source_wit.html

The U.S. Court of Appeals for the Seventh Circuit has issued an
opinion in which Judge Easterbrook declares, "[t]he GPL and
open-source have nothing to fear from the antitrust laws." The case is
called Wallace v. IBM., No. 06-2454. [1] Internet Cases covered the
lower court's decision from last December here [2].

Plaintiff Wallace filed an antitrust suit against IBM, Red Hat and
Novell, arguing that those companies had conspired to eliminate
competition in the operating system market by making Linux available
at an "unbeatable" price (free) under the General Public License
("GPL"). The U.S. District Court for the Southern District of Indiana
dismissed the case, finding the plaintiff had suffered no antitrust
injury. The Seventh Circuit affirmed.

"Although antitrust law serves the interests of consumers rather than
producers, the Supreme Court has permitted producers to initiate
predatory-pricing litigation," Judge Easterbrook wrote in the November
9 decision. "This does not assist Wallace, however, because his legal
theory is faulty substantively."

Perhaps most significantly, Wallace had not contended that software
available under the GPL would lead to mononpoly prices in the future.
The court observed the anomalous thinking behind any conclusion that
it would, "when the GPL keeps price low forever and precludes the
reduction of output that is essential to monopoly."

And the opinion provided a number of modern day examples to dispel any
thoughts of a GPL monopoly, by observing the market domination of
proprietary operating systems like Windows, OS X and Solaris even when
Linux is available for free. It also obseverd, quite astutely, that
Photoshop is preferred in the market to Gimp, and Lexis and Westlaw
are preferred to free legal sources such as the court's own website.

Calling the defendants "conspirators" in violation of the Sherman Act
didn't advance the plaintiff's case either. Instead of being a
restraint on trade, the court held that the GPL serves to foster
creativity, by enabling the free distribution and building of new
derivative works.

Wallace v. IBM, No. 06-2454 (7th Cir., November 9, 2006).

[1] http://www.internetcases.com/library/cases/2006-11-09_wallace_v_ibm.pdf
[2] http://www.internetcases.com/archives/2005/12/court_dismisses.html

Zach