Does pip have the option to limit package installation by licence type? Plus, some packages may be "DSFG Compliant" but may have a licence that isn't FSF approved.

Your solution is to create a repository for packages which requires hosting the packages and maintaining them. Or you can just blacklist packages that are not free instead of having to handle potentially thousands of packages. I'd prefer to have a list of packages that can be updated and pip checks that when a user tries to install.

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