Five years on
Posted Sep 30, 2010 17:56 UTC (Thu) by FlorianMueller
In reply to: Five years on
Parent article: Red Hat Responds to U.S. Patent and Trademark Office Request for Guidance on Bilski
IBM's behaviour might have been just as acceptable to you at that point in time.
If I had been asked to comment specifically on mainframe at that time, I wouldn't have had enough knowledge about that market to be able to understand the implications of IBM's conduct.
What we're talking about are two principles that must be weighed against each other: the concept of intellectual property, and the need for undistorted, effective competition. By default, it's all about intellectual property, and the bnetd case was just about intellectual property. In some cases, competition considerations (antitrust etc.) come into play, and then the result can be a different one than under IP law itself. However, if competition law sort of overrules IP, there must still be a reasonable compensation of the right holder, so IP is still respected.
But Blizzard dominated the market for services supporting its own games. Why is it different that IBM dominates the market for hardware that can run its own operating system?
One can define all sorts of markets, but that doesn't necessarily make them "relevant product markets" under competition law.
The mainframe market has been considered a relevant product market on prior occasions. It's definitely not just part of a larger server market. IBM's price discrimination makes the execution of legacy workloads about 10 times as expensive as new workloads, by selling the same hardware but with minor microcode modifications that prevent the execution of legacy workloads on those lower-priced components. Just looking at that behavior, it's clear that mainframe legacy workloads belong into a market that's separate from the overall server market. In Blizzard's case, there isn't anything similar.
I personally would like all operating system providers to have an obligation to provide reasonably priced licenses to their software regardless of hardware. But so far that's not a legal requirement for all of them to meet. Only antitrust law can currently impose this on a vendor.
help the rest of us who have to unbundle Microsoft Windows every time we want to buy hardware from mainstream retail vendors? That's a far more important battle that never seems to end.
If a PC vendor sells his machine only with Windows and doesn't offer it with Linux (or simply without any operating system), then that means you are required to buy Windows if you want to buy that particular machine. That's the opposite of the IBM mainframe situation. IBM requires you to buy its extremely expensive hardware if you want to run its operating system. The hypothetical equivalent for Windows would be if Microsoft stopped supplying hardware companies with OEM licenses and instead became a hardware vendor itself, forcing you to buy their hardware if you want to run Windows at all. You can be sure there would be an outcry, and antitrust intervention, if that happened.
The PC hardware market is competitive enough and there are vendors who offer you devices with Linux pre-installed. If there's choice, then bundling isn't the kind of problem that it is if there's a dominant vendor, let alone a monopolist.
The idea of illegal tying is that you do business (such as buying a product) with someone who's in a dominant (at worst, monopolistic) position and requires you to accept unfair conditions or he won't do any business with you at all. No single PC manufacturer is in such a position that you couldn't just go to another vendor if you prefer Windows-less PCs. But with IBM, customers currently have no choice if they want to run those legacy applications.
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