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Free Software crucial to competition, regulators in Novell patent deal say

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Competition authorities in Germany and the United States today highlighted the fundamental role that Free Software plays for competition in the software market. After several months of discussions, the US Department of Justice (DOJ) and the German Federal Competition Office (FCO) have allowed a consortium of Microsoft, Oracle, Apple and EMC to acquire 882 patents from Novell only subject to conditions clearly intended to prevent their use against Free Software players.

"This is an historic step", says Karsten Gerloff, President of the Free Software Foundation Europe, which was involved in the FCO investigation since the beginning. "The regulators acknowledge that Free Software is crucial to competition; that patent aggression can well be anticompetitive behaviour; and that fear, uncertainty and doubt serve to push smaller competitors out of the market."

Parallels to Microsoft case - no patent privilege

"FSFE has been highlighting the danger of software patents for a decade," says FSFE's legal counsel Carlo Piana. In the present transaction, patents play a similar role as they did in the European Commission's antitrust proceedings against Microsoft. Microsoft was forced to disclose its secret protocols, but refused to make them available under conditions that would allow their use in GPL-licensed Free Software. FSFE is glad to see that conversely in this situation antitrust authorities on both sides of the Atlantic are recognising the power of copyleft Free Software licenses to preserve competition.

The decisions by the FCO and the DOJ are also an acknowledgement that regulatory intervention can be necessary to overcome vendor lock-in and create a level playing field for all market participants. "Patents are not an excuse to avoid antitrust scrutiny. Today's announcements make that clear as daylight" says Piana. In a hearing at the European Court of Justice next month, FSFE will state its objections to Microsoft's strategy of using patents to limit competition, as Microsoft is appealing the fine of 899 million Euro imposed by the Commission.

FSFE will carefully review the actual decisions as they become available. "Today's announcements point in a very interesting direction. It is a success for the intense work done by FSFE and others, such as the Free Software Foundation and the Open Source Initiative. But the conditions we've seen are no panacea. The devil will be in the details," says Gerloff. Intense monitoring by the competition authorities will be required to ensure that the conditions for the transaction will have the intended effect.

See also FSFE response to questions by German FCO from April 6, 2011