[Sussex] I don't see how what M$ are doing can be legal

[Geoff Teale]

On Thu, 2003-11-06 at 20:21, Tony Austin wrote:
> I heard a story a while back that M$ threatened to withdraw Dell's licence
> to sell M$ OEM software on their computers if they sold ANY computers
> without an M$ OS.  As we know, Dell offer servers with Linux as an option.
>  The story went that Dell bundled in a copy of MSDOS 6.22 to satisfy M$
> and all was then well.  I don't know if this is true, but it sounds
> ridiculously plausible.

I ahve a Dell W650n workstation, it shipped from the USA (with
permission from the US government) and came with Red Hat Advanced
Workstation - no M$FT OS has ever (dis)graced this machine (nor will it)
and no M$FT software shipped with it.  However, under the terms of the
M$FT OEM license Dell had to pay Micrsoft just as much as if the machine
had shipped with Windows XP.  This is the nature of the deal Dell did
with Microsoft - ever way, so long as demand for M$FT machines if higher
than Linux ones this still works out cheaper for Dell than buying
individual licenses. 

> I have also heard anecdotes about people trying to buy OS-less computers
> in PC World and being told that it would be "illegal" for them to sell a
> computer without an M$ OS.

As I never tire of telling people:  If the people who work in PC World
knew anything about the products they were selling then they wouldn't be
working in PC World.

<snip>

> Now, this sounds like a restrictive monopolistic practice to me.  M$ are
> saying to anyone that supplies computer systems, "If you want to be able
> to supply computers with M$ OS, you cannot sell computers without an M$
> OS".

Its the same deal MS have been selling for years - it's infact slightly
less restrictive than it was 5 years ago.  Microsoft reached an out of
court settlement with Palm Inc (on behalf of Be Inc, whom Palm acquired
at their demise) when they sued them for effectively destroying Be's
business model for the x86 platform for banning the installation of any
bootloader other than those authored by Microsoft (which only boot
Windows versions) by there OEM customers.

This restriction was removed during the original phase of the US
antitrust case, at roughly the same time Steve Ballmer was describing Be
as a viable competitor to Microsoft in the OEM installation business.

> I can't see how this can be legal.  Does anyone know what the legality of
> this is and if there is any way that it could be challenged?  If it can be
> challenged perhaps we are the very people to be doing it.

It is a contract term and as such is up to the companies involved - you
are right to suggest that the power of Microsoft as a supplier in a
market is unduly large as a result of their monopoly but this practise
itself is not inherently illegal.  It would be necessary to to take some
form of antitrust action against Microsoft to reverse this.

Rest assured that the EU looks very likely to come down like a ton of
camel vomit on Microsoft in the forthcoming case, and this kind of
anti-competitive activity is likely to be completely outlawed (in the
case of Microsoft) in the EU.  Furthermore, this is really only the tip
of the ice-berg - the EU is even more concerned about the leveraging of
the platform to push other companies out of markets that are new to
Microsoft - bundling is still the biggest issue.



-- 
Geoff Teale <tealeg at member.fsf.org>
Free Software Foundation