09.27.07

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Novell and Microsoft Face the Wrath of Free/Fair Market Advocates

Posted in Europe, FUD, Interview, Microsoft, Novell, Patents at 6:14 pm by Dr. Roy Schestowitz

Last week we covered the ruling in Europe, which is very much related to Microsoft’s deal with Novell. By signing the deal, Novell immediately helped Microsoft’s battles in Europe, for a variety of reasons that we already mentioned.

As you might recall, Neelie Kroes has had yet another smear campaign coordinated and orchestrated against her agency. She quickly responded to this a week ago, but she now makes available a more formal response [PDF].

There cannot be many businesspeople who doubt that a monopolist can use its market power to squash even the most efficient rival producers of goods or services that interact with the monopolized product. There cannot be many venture capitalists who would invest in a company whose market can at any moment fall under the sway of an entrenched neighboring monopolist whose behavior was subject to no limits.

What I will do is continue to look hard at the actions of monopolists. I will use my practical business experience to help me understand the dynamics of markets. I will look for answers that maintain the incentives of everyone on the market to innovate, and not just the friendly neighborhood monopolist. Power has to be used responsibly, by the enforcement agencies and by the monopolists. I will not look for fights, but where interventions will make consumers better off, I will not shy away from them.

That would make Novell a friend of “the friendly neighborhood monopolist,” to use Neelie’s own words. This is not the first time that Neelie gets under the scrutiny of the US government, the Microsoft lobbyists, or even Microsoft itself (Steve Ballmer impolitely phoned her last year and the same was done in Korea). It is merely a case of Microsoft motoring its agenda using a variety of seemingly-independent proxies, whom it considers partners, whether paid or not.

As we’ve witnessed before, Novell has become one such partner. de Icaza, for example, felt the urge to strike back at EU regulators some time ago, essentially taking a hard line along with Microsoft. His rebuttals are highly cited. Why would a Novell vice president do this?

In Groklaw, Georg Greve has responded to some common FUD (repeated over and over again for a Big Lie-esque propaganda effect). This FUD comes from Microsoft and proxies that we mentioned above. It is then echoed by the mainstream media, which is obedient to those who fund it (large companies seeking assets and information control). Georg’s main points that are squashed:

1st Fallacy: That the Ruling Punishes Innovation

[...]

2nd Fallacy: That Google, Apple and All Successful Companies Need to Fear

How convenient a generalisation. Hopefully, all that spin will prove ineffective.

Elsewhere on the Web, an interview with Novell was published. Watch how many of the questions, which are collected from different individuals, attack Novell over patents (about half of them) and related issues.

It is known that the Novell-Microsoft agreement has caused an enormous wave of unpopularity against Novell, no matter how much the company tries to tranquilize their users. If it is demonstrated that this unpopularity is negatively affecting the growth of the distribution, do you intend to cancel the agreement? (Patola)

[Novell:] Is is important to keep in mind there are many different groups that look at the Novell-Microsoft agreement in different ways. There is no doubt that there is a part of the open source community that is vocally opposed to the agreement.

Yes, many people dislike the deal and the questions in this interviews prove this. Novell repeats the same line of defense which is, “we did it for the customer.” They pass liability to incognito. According to Novell (not exact quotes here), “patents are not an issue,” but Novell decided to sign a deal which includes them anyway. It knew what this would cause. It could easily predict that Microsoft would use this as a weapon (even if just FUD but no legal action). Novell actually liked the idea, and according to a recently-departing Novell executive, it perceived this as a competitive advantage.

Was Novell drunk when it signed the deal? Was it bribed? Or was it just tactlessly selfish?

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