Wallace on predatory pricing: ------- Predatory pricing
The GPL establishes a predatory pricing scheme. Setting the maximum price of intellectual property at no charge removes all motive to compete. The Supreme Court has analyzed predatory pricing in a Sherman Act § 1 civil action: [T]his is a Sherman Act 1 case. For purposes of this case, it is enough to note that respondents have not suffered an antitrust injury unless petitioners conspired to drive respondents out of the relevant markets by (i) pricing below the level necessary to sell their products, or (ii) pricing below some appropriate measure of cost. MATSUSHITA ELEC. INDUSTRIAL CO. v. ZENITH RADIO, 475 U.S. 574 (1986) [fn8]. If we exam case (i) pricing below the level necessary to sell their products the obvious result of the GPL is the destruction of interbrand competition (see State Oil Co. v. Khan, supra) when the maximum price of intellectual property is set at zero (no charge). New developers and vendors of intellectual property cannot enter a market for which there is no reward or incentive. Not only competitors are harmed by the GPL scheme. Consumers lose because a lack of competition removes not just product choice but without competitive reward the incentive to improve product quality disappears. When we analyze case (ii) pricing below some appropriate measure of cost we see that a maximum price of zero for the intellectual property in computer programs leads to an absurd result. In addition to the intrinsic value ordained by Art. I, §8, cl. 8 of the Constitution, the cost of creation of intellectual property in computer programs entails the development costs of skilled programmers, new computer hardware, communications costs and administrative overhead. Commercial computer programs are not developed in a zero cost vacuum -- that is an absurd proposition. A maximum price of zero is below any reasonable definition of appropriate measure of cost concerning development and innovation of intellectual property assets. The only economic motive for using GPL licensed intellectual property in a competitive market for computer operating systems is to destroy a competitor who is striving to create positive value based in intellectual property. The Supreme Court has addressed the practical evidentiary burden for a predatory pricing claim: As a practical matter, it may be that only direct evidence of below-cost pricing is sufficient to overcome the strong inference that rational businesses would not enter into conspiracies such as this one; MATSUSHITA ELEC. INDUSTRIAL CO. v. ZENITH RADIO, 475 U.S. 574 (1986)[fn9]. The GPLs term 2(b) is without question direct evidence of a below-cost pricing scheme. Commercial distributors of GPL licensed products conspire to give away their assets in intellectual property and then recoup losses by leveraging ancillary markets such as computer hardware sales (computer hardware obviously requires an operating system), software consulting fees, employee training programs and computer maintenance services. (One uncharged co-conspirator, INTERNATIONAL BUSINESS MACHINES CORPORATION, is the Worlds largest computer hardware and computing services corporation.) The effect of the GPL license is to create a Marxist-Leninist model for computer programs, where a vast pool of intellectual property is collectively price fixed at no charge and thus removed from commercial exploitation. In time, due to its recursive nature, the GPLs pool of price fixed intellectual property can grow to utterly destroy a targeted market. It is not consumers that the GPL intends to benefit -- the goal is the destruction of competition in the free market. The GPL license renders U. S. Const., Art. I, §8, cl. 8 meaningless in the context of computer programs containing copyrights and patents. The defendants assert: The GPL expressly allows Defendants, and any other licensee, to charge a fee to recover the variable or incremental costs associated with distributing software licensed under the GPL: You may charge a fee for the physical act of transferring a copy.. Defendants Brief at 5. Here, the defendants attempt to conflate the definition of intangible copyright assets with the physical media in which a work is embodied: Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. ..;17 USC sec. 202. The present claim is for price fixing in the relevant market of intangible intellectual property assets in computer programs (the Linux operating system) and not an action concerning tangible media or physical acts involving the distribution of tangible media in which a copyrighted work may be fixed. The plaintiffs complaint has certainly met the pleading requirements expressed in PEGRAM. ET AL., and Denny's Marina, supra, by directly or inferentially alleging the element of an resultant unreasonable restraint of trade in the relevant market. ------- He he, Marxist-Leninist. regards, alexander. _______________________________________________ Gnu-misc-discuss mailing list Gnu-misc-discuss@gnu.org http://lists.gnu.org/mailman/listinfo/gnu-misc-discuss