Concrete proof shows how Linux was excluded, just like today’s ‘non-taxable’ Linux
Yesterday we wondered whether Microsoft’s exclusionary deal with OEMs are similar to exclusionary Linux deals. Particularly, we wondered if these are similar to exclusionary contracts with government departments. What remains clear is that there is a pattern here. In order to understand this pattern better, let’s delve into concrete evidence and explore the past.
Here is Microsoft’s old contract with Compaq[PDF]. It reached the light during the Comes vs Microsoft case in Iowa.
LICENSE AGREEMENT
for
MICROSOFT APPLICATIONS PRODUCTS
Between
MICROSOFT CORPORATION
a Washington Corporation
and
COMPAQ COMPUTER CORPORATION
a Delaware Corporation
You can dissect the nature of the deal for yourself (OCRing is not hard, but plenty of editing must follow because of the poor quality of the scan). Mind the following bit in page 22. It’s just one outstanding example among many others.
The following provisions shall apply to all Products listed in this Exhibit C:
(1) Preinstallation
the above royalties require that COMPAQ distribute the Products preinstalled on all customer systems.
Microsoft OEM LICENSE AGREEMENT
FOR MINIMUM COMMITMENT PAYMENTS
#2811-7060 dated march 1, 1997
with DELL COMPUTER CORPORATION
There is a lot to be found there as well. Web browser discrimination and a Microsoft-centric programs set are some of the recurring patterns in these contracts. There are many more such contracts which were intended to remain secret at the time of signing, just like Microsoft’s deal with BECTA and the deal with Novell, among other deals. In Linspire’s case, very little was revealed because it is a privately-held company.
Dell’s affair with Linux and Microsoft brings up a lot of ’smoking guns’. Examples include this story about Dell’s Linux business in China.
Dell’s love affair with Linux is a clandestine affair these days, conducted in secret, away from disapproving eyes. But now the pair have been spotted in China.
When Michael Dell first saw the web-footed beauty, he fell head over heels. Six years ago Dell pledged a series of strategic investments in Linux companies, including Eazel and Red Hat. The romance attracted the disapproval of Microsoft however, and barely lasted weeks. Very quietly, Dell dumped the bird.
It later emerged that Microsoft’s OEM enforcer Joachim Kempin had promised Steve Ballmer that he’d be putting the screws on PC builders, or “hitting the OEMs harder” in his words.
The States’ remedy hearing opened in DC yesterday, and States attorney Steven Kuney produced a devastating memo from Kempin, then in charge of Microsoft’s OEM business, written after Judge Jackson had ordered his break-up of the company. Kempin raises the possibility of threatening Dell and other PC builders which promote Linux.
“I’m thinking of hitting the OEMs harder than in the past with anti-Linux. … they should do a delicate dance,” Kempin wrote to Ballmer, in what is sure to be a memorable addition to the phrases (”knife the baby”, “cut off the air supply”) with which Microsoft enriched the English language in the first trial. Unlike those two, this is not contested.
[…]
Earlier memos described that it was “untenable” that a key Microsoft partner was promoting Linux. Kuney revealed that Dell disbanded its Linux business unit in early 2001. Dell quietly pulled Linux from its desktop PCs in the summer of 2001, IDG’s Ashlee Vance discovered subsequently, six months after we heard Michael Dell declare his love of Linux on the desktop the previous winter.
Compaq was also mentioned in other memos, with Microsoft taking the line that OEMs should “meet demand but not help create demand” for Linux.
There are several more I am aware of, some of which involve Dell. To move further, however, let’s take a more ‘holistic’ view on this problem. kuro5hin.org has a good article on this issue as a whole.
They are, in short the secret to Microsoft’s success. And the word secret is to be taken quite literally: No OEM may talk about the contents of his contract, or he will lose his license, and (assumption) likely be sued for breach of contract as well.
You may then also consider the Iowa Petition[PDF]. It shows how Microsoft essentially blocked its competitors (Linux in this case) from reaching the sales channel.
Microsoft’s Predatory Response to GNU/Linux
142. GNU/Linux is an “open source” operating system that runs on Intel-compatible PCs. Microsoft has targeted the competing operating system by pressuring Intel, as well as various major OEMs such as Dell and Compaq, to boycott Linux. In late 2000, for instance, Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down competition from Linux: “I am thinking of hitting the OEM harder than in the past with anti- Linux actions” and will “further try to restrict source code deliveries where possible and be less gracious when interpreting agreements - again without being obvious about it,” continuing “this will be a delicate dance.”
143. LindowsOS (now known as Linspire), which is developed and marketed by Lindows.com, Inc., is an Intel-compatible PC operating system based on Linux and which competes directly with Microsoft on the. PC desktop. On information and belief, Microsoft interfered with Lindows.com, Inc.’s ability to distribute its product through the OEM channel. Microsoft also initiated a lawsuit against Lindows.com, Inc. that adversely affected Lindows.com, Inc.’s ability to exist, obtain; funding and conduct business. Microsoft’s Anticompetitive Agreements With OEMs To Foreclose Competition
144. Microsoft Chairman and former CEO, Bill Gates, reportedly summarized the effects of the DOJ’s 1995 consent decree–which banned “per processor” licenses, among other exclusionary licensing terms mas “nothing.” Microsoft was able to devise other restrictive OEM agreements to foreclose competition in th…
145. A “per system” license was the practical equivalent of the “per processor” license. Under the “per system” license, the OEM had to pay royalties to Microsoft for every computer of a particular “model” or “system” that it shipped–again, as with the “per processor” contracts, regardless of whether the PC contained Microsoft’s operating system. Microsoft defined “system” and “model” so broadly in its contracts that virtually all of an OEM’s production was subject to Microsoft’s “double tax” if the OEM wanted to give the consumer a choice of operating systems. Microsoft did not agree to give up its “per system” licenses in the 1995 consent decree, even though the Department of Justice warned the federal district court that “per system licenses, if not properly fencet in, could be used by Microsoft to accomplish anticompetitive ends similar to ‘per processor’ licenses”–and in fact were.
146. Another way that Microsoft found to circumvent the federal court’s 1995 injunction forbidding its use of “minimum commitment/per processor” licenses was what Microsoft calls its “Market Development Agreements” (”MDAs”). Microsoft contrived the MDA as a device to evade the Court’s decree prohibiting Microsoft from requiring OEMs to adhere to “minimum commitments.” As Steve Ballmer (Microsoft’s current CEO) acknowledged: “We have always given better prices to customers who work with us to make the market. Those used to take the form of commits [i.e., minimum commitments] which we do not do anymore as a result of the [federal court’s] decree but we still believe in rewarding people who help us create demand. Hence the iMDA.” Under the MDAs, Microsoft granted large discriminatory price concessions to those OEMs that would agree to market and promote Microsoft’s Windows to the exclusion of any rival operating system. These discounts were calibrated so as to force the OEM to sell most of its computers with a Microsoft operating system in order to obtain the lowest price.
147. Because the OEM market is so competitive and profit margins are so thin, every OEM had to get the lowest price it could from Microsoft in order to survive. In March 2002, a Gateway marketing executive (Anthony Fama) testified before Judge Kollar-Kotelly in State of New York et al. v. Microsoft, Case No. 98-1233 (CKK), about how Microsoft used its MDA program in order to force OEMs to market Microsoft’s operating system exclusively: “Given the substantial nature of these discounts, participation in the MDA, as a practical matter, is not optional. In other words, not receiving :these discounts would put Gateway at a substantial competitive disadvantage, and Gateway has communicated that self-evident proposition to Microsoft.” Microsoft also used its MDAs to lock OEMs in and competitors out by offering a discriminatory price to the OEM in a later year provided (a) the OEM reached Microsoft’s imposed goal of Windows sales over competitive sales in the prior year and (b) renewed its exclusionary contract with Microsoft for the later year. This placed the OEM on a perpetual treadmill, eliminating competition indefinitely. Microsoft continued these exclusionary terms at least past April 2002.
148. One method for encouraging competition in the operating systems market would have been the sale by OEMs of “naked machines” (i.e., computers that are sold without a predetermined suite of software forced upon the consumer). “Naked machines” would allow consumers to choose their computer’s software configuration from an array of competitive software products, either for preinstallation by the OEM or installation by the end user.
Microsoft sought and obtained the agreement of the OEMs to refrain from selling “naked machines.” Instead, OEMs universally agree to “bundle” Microsoft applications and operating systems with their computer hardware, effectively depriving consumers of any competitive choices. These restrictive agreements exited before 2000 but, in 2000, Microsoft ratcheted the restriction up so that OEMs are forced to forfeit all discounts otherwise earned if they ship any “naked machines” to consumers. This heightened restriction, which (on information and belief) continues to the present, prohibits PC users and PC retailers from buying and installing lower priced or better quality operating systems of their choice.
Articles were written at the time to cover some of the issues raised by the lawyers in Iowa. Here is one such article. (the page has expired since I grabbed a copy)
A judge on Friday told jurors they must accept as fact that a federal court found in 1999 that Microsoft holds a monopoly over computer operating systems and that it restricted computer manufacturers’ ability to use competing systems.
[…]
She said she’ll show that the company used its monopoly power to exclude competition and control prices and that it conspired with other companies to restrain trade, maintaining what she called a chokehold on software competitors and computer manufacturers.
“It isn’t illegal to be successful,” Conlin said in opening remarks. “We applaud that. … But you can’t freeze out competitors and punish and retaliate against people who cooperate with competitors. Microsoft did all that and more.”
Conlin warned jurors that she would say some unflattering things about Microsoft and its billionaire founder Bill Gates, who serves as company chairman.
[…]
Conlin’s first 3 1/2 hours of opening arguments delved deeply into computer industry history and how Microsoft fought off competitors attempting to design rival software.
Going back now to as early as 1998, Microsoft starts to realize that Linux might pose a possible threat, and Vinod Valloppillil, who is a program manager at Microsoft, is asked by Mr. Allchin, Jim Allchin, to analyze potential strategies for combatting open-source software, and specifically Linux. His memos are leaked to the press in April — I beg your pardon — in October of 1998 and become known as the Halloween documents. And the evidence will be that Microsoft uses its influence in the OEM channel, the computer manufacture channel, to make sure that end users have a difficult time buying PCs with Linux preinstalled.
Some apologists might get off their seats and argue, “it’s all in the past and Microsoft has changed since.” Well, not so fast! The same tricks have not reached and end and they may never cease. Consider Windows Vista.
PC Manufacturer Acer is complaining that Microsoft has jacked up the price of Vista, and that the basic versions are so basic no one will ship them. Since the collapse of the Microsoft Anti-trust Case under the Bush Administration in 2001, manufacturers have no choice but to accede, adding hundreds of dollars to the cost of each PC. With Gates now proclaiming victory over European Regulators, Microsoft once again seems unstoppable. But Microsoft had drawn itself close to the Republican Party. With the Republicans now evicted from the House and Senate, is it time to look at the Microsoft Anti-trust Suit? Could Microsoft be compelled to lower its inflating Vista prices, or to open their tech or even supply funding to Linux-flavored Windows such as Wine?
This bit from Slashdot presented an interesting perspective that shows the effect of having a monopoly. It is still being maintained using an iron fist. Even Novell admitted the problem last year, but it became a Microsoft ‘partner’ shortly afterwards, regardless of the severe consequences.
Microsoft Corp is using scare tactics to exert pressure on PC vendors not to explore the potential of desktop Linux, according to Novell Inc president and COO, Ron Hovsepian
The references provided in this article have hopefully shown that the nature of Microsoft deals, contracts, and negotiations are exclusionary and discriminatory by nature and by design. This is something to bear in mind in the future. This blog post may therefore be worth cross-referencing later on, if only to be considered as compelling evidence of a key contention.
The United Kingdom remains one whose mindset is still align with America’s, at least as far as software is concerned. There are a few new articles that are worth mentioning.
As pointed out just weeks ago, the UK’s National Archives sidled with Microsoft in a most questionable (even controversial) of moves. Let us recognise that an issue which escapes many people’s attention is long-term preservation of information. You see this in DRM, not just in document formats. Only when people wake up and understand that their past gets erased will they actually have regrets. National Archives seems to have taken the wrong route for what appears to be Microsoft promotion. It relies on OOXML — the poison that we know as an enemy to real interoperability and competition in the market.
After a disappointing response from the UK Government, it appears as though the country does not mind lock-in. Competition is a healthy thing. It motivates. It drives innovation. OOXML kills all of this.
With a document formats monopoly (not unification), science will be hindered. But why? Why would anyone want this? The UK government is infatuated with Microsoft. Maybe they like the money, maybe they just like the ‘class’. Tony Blair and Bill Gates are friends. We already know this. The UK is not the only victim however. Look what happened in Portugal just days ago.
We have some linksaccumulated. They hopefully show how Microsoft misuses its power in the BBC, which is funded by British taxpayers. It’s part of a much broader picture. I fear that the UK will be the last nation to embrace Linux and standards, along with the United States. The rest of the world is transforming more quickly and it’ll give it a competitive advantage.
Since software patents may threaten this fundamentally important freedom, we propose that software published under the GNU General Public Licence (version 3 and above) be given immunity from prosecution from patent infringement under the Copyright Designs and Patents Act.
Forget software politics for a minute — what does the new Samba licensing mean for the version you’re actually running, and for the distribution that packages it for you? Samba maintainer Jeremy Allison explains.
We have recently lost focus of the Linux deals and found ourselves discussing some of their more worrisome impacts of these deals. Document format debates occupied a large number of the recent posts because they are very important. Microsoft strives to keep its cash cow alive by controlling the standard. it wants the Golden Wand. Recently it recruited a 4th Linux company to help it achieve this. Whether money exchanged hands or not (again?), we probably will never know.
The OpenDocument Format Alliance (ODF Alliance), the leading organization advocating for openness and accessibility to government documents and information, today congratulated Japan for adopting a policy under which government ministries and agencies will solicit bids from software vendors whose products support internationally recognized open standards.
Previously, government agencies could ask bidders to submit bids based on whether their products offered functions comparable to particular software suites. With the new interoperability framework, which takes effect immediately, the government will give preference to procuring products that adhere to open standards, and which interoperate easily with other software.
As Bailey emphasised, the issue at stake is not one of fighting against Microsoft, but rather fighting for the rights of the user to be able to access documents without them becoming obsolete.
Among those attendees were some other members of the committee and something of a strategy meeting developed, with ideas being shared as to how best to obtain community input.
What emerged was that bombarding the SABS with petitions would not benefit the cause and would merely further irritate those involved.
After Microsoft announced it would work with the UK National Archives to help open old digital document formats, Georg Greve and Joachim Jakobs, of the Free Software Foundation Europe, question the US giant’s motives.
[…]
What happened: Microsoft asked the UK National Archives to invest in a solution that would grant access to their legacy data.
This whole scenario emerged when the BBC and National Archives published what appeared like Microsoft promotion. I called it a “publicity stunt” at the time. It seems to promoted Microsoft’s OOXML lockin under disguise. I later addressed and delivered some criticisms and evidence to back my stance.
Not all hope is lost. There are some encouraging developments at the BBC. Yesterday the Register published an item which indicates that the BBC no longer ignores us. It is willing to explains its decision to enforce the regime of Microsoft DRM and negotiate ways to proceed.
The BBC Trust has asked to meet open source advocates to discuss their complaints over the corporation’s Windows-only on demand broadband TV service, iPlayer.
[…]
Before the trust got in touch on Wednesday, OSC CEO Rick Timmis said: “Everything we’ve done in the trust’s direction has fallen on deaf ears. They’ve completely ignored us.”
Correction: previously, the title stated “Japan Chooses OpenDocument Format, FSF Challenges OOXML, and South Africa to Decide on Document Format”, but the situation in Japan isn’t so, yet. The title was thus corrected.
Update: I have just spotted something which looks rather ugly. It’s not truly a surprise because intent was announced some months ago.
On the face of it, Microsoft will have some ‘OOXML traps’ (or hooks) preinstalled on some consumer PCs. Think of it as a teaser, or what Microsoft called “craplets”. It puts Microsoft in a position of advantage that capitalises on an OEM chokehold (defended through retaliation tactics). Here is the gist:
Microsoft is shipping limited-use copies of Office 2007 with PCs in a try-before-you-buy scheme to seed the market with its latest suite and drive Windows server and client software sales.
Now, two observations are worth making here. Firstly, the trial version of Microsoft Office does not enable the user to save files in formats other than OOXML. Other options (save as/export) are greyed out. This essentially holds the user’s data hostage. The user data is captured in the universe of OOXML format. The second observation to make is that one of the most popular requests in Dell’s IdeaStorm is preinstallation of OpenOffice.org. Dell has so far refused to respond to this demand.
According to the following bit of information, ECMA does not exactly operate like a standards body should. Have a look (emphasis mine):
Global Graphics’ chief technology officer Martin Bailey has been appointed by standards development body Ecma International to chair a new technical committee that will work on producing a formal industry standard for the XML Paper Specification (XPS), the new print and document format introduced by Microsoft with Windows Vista….
Global Graphics has played a prominent role in the development and launch of the XPS specification from the very start. A recognized expert in interpreting, rendering and converting PDLs, Global Graphics’ leading edge expertise and engineering capability were factors in the Company being chosen by Microsoft in 2003 to provide consultation services on the XPS specification as well as develop a prototype and a print reference XPS RIP for Microsoft.
Now, can you see how approval is won at ECMA? There is not much of a chance of a proposal being rejected, is there? As we said yesterday, ISO seems to have lost its way as well. It is becoming a little assimilated to ECMA, which can be referred to as a Coin-in-the-Slot Standards Organization. Once again, Microsoft’s allies are in the committee, so there is little room for independent judgment. ECMA truly looks like a production line that passes on proposal s– however poor they may be — to the ISO, then boasting some ‘pseudo acceptance’ by an industry-for-industry consortium.
Andy Updegrove and Bob Sutor are among those who try to explain to high officials why poor Microsoft-centric standards must be rejected. You can assist resistance to OOXML adoption in MA.
Preparing such comments is time consuming, but it is also important. I took several hours to do so yesterday, and have just sent them to the ITD just now. You can to, and I hope that you will. The ITD’s comment address is standards@state.ma.us, and the deadline is next Friday. If you’re a believer in open standards, please don’t let that deadline pass without making your thoughts known.
More information can be found here. According to Newton (of Alfresco), Microsoft has just taken its battles to the United Kingdom as well. It continues its lobbying campaign with an XML du jour and a twisted definition of “open”.
With OOXML and XPS, Microsoft has chosen to not work with existing standards, but to create new ones, as they have in their recent announcement on Web3S instead of working with the rest of the industry on the Atom Publishing Protocol. In the case of OOXML, this is a logical move on Microsoft’s part, since it is an evolution of Microsoft’s XML strategy started with the Microsoft Office 2003 version and ODF will be a technology diversion from that strategy. With Microsoft controlling 90% of the office productivity tools market and OOXML being the default file format for Microsoft Office 2007, OOXML is likely to be widely-used.
The article suggests that the BBC article on digital preservation may have been nothing but a publicity stunt. There are some prior incidents where Microsoft did questionable things in the United Kingdom. It ‘faked’ support for OOXML and got slammed by the Open Source Consortium, with which I’m sort of affiliated.
The petition is an attempt to make it appear that Open XML has “pseudo-grassroots” support, argues Mark Taylor, the founder of the Open Source Consortium.
This action followed a very suspicious petition, set up by nobody but Microsoft. Keep your eyes open and see how these things develop. There’s little honesty in process.
The petition’s arguments, which are presented in the form of bulletpoints, cover some of the more obvious issues. Recall some of the — shall we say — corruption involved in getting OOXML as far as it has gone. Gross manipulation of standards body and legislation should not be tolerated, so please make yourself heard and stand up for free competition.
Here is the video “Bonnie Garcia - Enter the FUD Brigade”. The hearing revolves around legistlation that was intended to prevent Microsoft’s ‘latest and greatest’ lockin from taking over the State of California. As you may know by now, part of the Novell deal and Xandros deal puts these two companies in a position where they must support Microsoft’s lockin (OOXML) to protect Microsoft’s cash cow (and therein lies the relevance of this debate to our Web site).
The pointer to this video came from Groklaw and the accompanying comment from Pamela Jones is worth adding: “You might find this of interest, a small piece of the discussion about California AB 1668, the ODF bill. It would appear that Bonnie Garcia is reading off of notes, and in any case she clearly and admittedly has no idea what ODF is or why it’s of value, neither of which hinders her from having a strong opinion, I noticed…”
This is not the first time that a technical discussion become a political one. Microsoft relies on sending its non-technical people to lobby for lockins. They can always pretend to be clueless (maybe because they are). This shifts focus and it’s no coincidence. It’s deliberate.
To quote the text (again, unsurprisingly delivered from a Windows server):
The UK Government champions open standards and interoperability through its e Government Interoperability Framework (eGIF). Where possible the Government only uses products for interoperability that support open standards and specifications in all future IT developments.
Interoperability and open standards also support the sustainability of digital information beyond any single generation of technology. New techniques for digital preservation being developed by The National Archives require the periodic transformation of digital information to new formats as technology changes. Such transformations will be simplified by the adoption of open standards.
No single format provides a universal solution for all types of digital information, and The National Archives therefore actively monitors and evaluates a wide range of existing and emerging formats (including OpenDocument Format). A policy on digital preservation, which includes guidance on the selection of sustainable data formats based on open standards, is being formulated by The National Archives, and will help define the standards for desktop systems. The National Archives technical registry ‘PRONOM’ (new window) supports this through the provision of key information about the most widely-used formats.
In a resounding victory for Microsoft Corp., bills seeking to mandate the use of open document formats by government agencies have been defeated in five states, and only a much-watered-down version of such legislation was signed into law in a sixth state.
Remind yourselves how Microsoft positioned itself so conveniently. A lot more dirty tricks were involved. It’s rather breathtaking (just follow the link and watch a sample). If this is the company Novell partners with and defends, then what does it say about Novell?
For those who have never heard of Xandros (which will be a lot of you), it’s a commercial distribution descended from Corel’s Linux system, funded by the same VCs that funded Ximian, and derived from Debian at one point, although I don’t know how much comes from there any longer. They’ve been around a long time, although for obvious reasons I can’t believe they are very successful.
…
There’s not much to do about Xandros. They aren’t a big player, this isn’t going to make them into one. We should turn away from them as was the case with Novell, but it seems a bit silly since most of us didn’t even know they existed.
Let’s begin with Bruce Perens, who points out that Dan Lyons is at it again. For those who do not know, Lyons is a Forbes journalist that has been often accused of shilling for Microsoft and SCO by attacking Richard Stallman and Groklaw, among other entities (it could be part of a larger scheme).
If you read Dan Lyon’s blog, 100% of it in recent time has been snippy comments directed to Groklaw and other Open Source entitities.
Highlight: Novell was the first to acknowledge that Microsoft FUD tactics had substance. Novell then used anti-Linux FUD to market itself. Learn more
Highlight: Xandros let Microsoft make patent claims and brag about (paid-for) OOXML support. Learn more
Highlight: Linspire's CEO not only fell into Microsoft arms, but he also assisted the company's attack on GNU/Linux. Learn more
Highlight: Microsoft craves pseudo (proprietary) standards and gets its way using proxies and influence which it buys. Learn more
Highlight: The invasion into the open source world is intended to leave Linux companies neglected, due to financial incentives from Microsoft. Learn more
Analysis: Xen, an open source hypervisor, possibly fell victim to Microsoft's aggressive (and stealthy) acquisition-by-proxy strategy. Learn more
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Highlight: Novell was the first to acknowledge that Microsoft FUD tactics had substance. Novell then used anti-Linux FUD to market itself. 
Highlight: Xandros let Microsoft make patent claims and brag about (paid-for) OOXML support. 
Highlight: Linspire's CEO not only fell into Microsoft arms, but he also assisted the company's attack on GNU/Linux. 
Highlight: Microsoft craves pseudo (proprietary) standards and gets its way using proxies and influence which it buys. 
Highlight: The invasion into the open source world is intended to leave Linux companies neglected, due to financial incentives from Microsoft. 
Analysis: Xen, an open source hypervisor, possibly fell victim to Microsoft's aggressive (and stealthy) acquisition-by-proxy strategy.