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09.09.11

IRC Proceedings: September 8th, 2011

Posted in IRC Logs at 7:40 am by Dr. Roy Schestowitz

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Cablegate: Microsoft Asks US Government to Help Derail Vietnam’s Migration to GNU/Linux, Wants to Treat Vietnamese Like ‘Pirates’ Instead

Posted in America, Asia, Cablegate, GNU/Linux, Microsoft at 4:20 am by Dr. Roy Schestowitz

Cablegate

Summary: Another example of an attack on Vietnam’s desire for digital independence, where the attacker is both federal and corporate (a hybrid)

Vietnam made some headlines in recent years as it said it would migrate to Free software in government (GVN). As we have shown in recent days, Microsoft has used some nefarious means to stifle Vietnam’s moves towards such digital independence and the American government was helping Microsoft do that. Now we are seeing another Cablegate cable where “Microsoft representatives also highlighted their concerns about recent GVN comments that it plans to switch to open source software (like Linux) to “fix” its IPR problems. While acknowledging that the decision on what type of software the GVN wants to use is up to the Government, Microsoft asked us to help convey the message that the GVN should not switch to open source for the “wrong reasons.” Switching to open source does not insulate the GVN from the responsibility of ensuring that all software used by the GVN is legitimately licensed, Microsoft asserted. Econoffs noted they had already raised this issue with the GVN.”

Why are state department officials lobbying for Microsoft like this? Do they not respect Vietnam’s right to independence?


UNCLAS SECTION 01 OF 02 HANOI 000966 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EB/IPC:DRBEAN, EAP/BCLTV AND EB/ODC 
STATE ALSO PASS USTR BURCKY/ALVAREZ AND BRYAN 
STATE ALSO PASS USPTO FOR URBAN 
STATE ALSO PASS LIBRARY OF CONGRESS FOR TEPP 
USDOC FOR LASHLEY AND 4431/MAC/AP/OKSA/HPPHO 
USDOC ALSO FOR ITA/TD/OTEA/JJANICKE AND ITA/TD/SIF/CMUIR 
 
E.O. 12958: N/A 
TAGS: KIPR, ETRD, ECON, VN, IPROP 
SUBJECT: VIETNAM: MICROSOFT FOCUSED ON IPR 
 
SENSITIVE BUT UNCLASSIFIED PROTECT ACCORDINGLY 
 
REF:  HCMC 367 
 
1. (SBU) Summary.  While disappointed in the lack of 
progress in improving IPR protection in Vietnam, Microsoft 
remains committed to engaging the GVN on this critical 
issue.  Microsoft and Business Software Alliance (BSA) 
representatives are looking at ways to encourage the GVN to 
adopt a legitimate software initiative and asked the USG to 
encourage the Prime Minister to send a letter to all GVN 
agencies ordering them to use only legitimate software.  End 
summary. 
 
2.  (SBU) On March 30, Economic/C and Econoff met with 
Singapore and Bangkok-based representatives of Microsoft and 
the Business Software Alliance (BSA) to discuss Intellectual 
Property Rights issues in Vietnam.  Microsoft employees were 
both regional senior managers and corporate government 
affairs representatives.  Throughout the meeting it was 
clear that while Microsoft is frustrated with the lack of 
progress on IPR issues in Vietnam, it is committed to 
finding opportunities to engage with the GVN and to work out 
a strategy to develop positive momentum for change. 
Microsoft representatives indicated they would continue to 
engage senior level officials, including at the DPM level, 
to prioritize IPR issues. 
 
3. (U) Econoffs explained that the Ambassador and Econoffs 
frequently highlight to GVN officials at every level two key 
points on the importance of IPR to Vietnam: 
 
-- The GVN has prioritized attracting foreign direct 
investment (FDI) to Vietnam.  Strong IPR is a critical 
factor attracting FDI, not only in the IT sector, but also 
across the board.  Econoffs suggested that Microsoft work 
with other international software and hardware companies 
(including its competitors) to deliver a unified message to 
the GVN that IT companies will not look seriously at Vietnam 
until there is better IP protection.  Microsoft noted that 
the Business Software Alliance (BSA) included a number of 
both hardware and software firms and was be a good vehicle 
for making such an approach. 
 
-- Strong IPR enforcement is critical to the development of 
domestic industries that depend on IP - most notably the IT 
sector.  Econoffs recommended Vietnam work with and provide 
assistance to the Vietnam Software Association (VINASA) to 
help this organization develop itself as a stronger advocate 
for the domestic software industry and improve VINASA's 
ability to influence government policy vis--vis IPR. 
 
 
4. (SBU) Microsoft representatives noted that in their 
experience several things have to happen before a country is 
capable of effective IPR enforcement.  First, Vietnam needs 
a strong legal framework that includes significant penalties 
for enforcement.  Additionally high-level engagement on the 
issue is necessary.  Microsoft noted that in some countries, 
a letter from the Prime Minister to all government agencies 
(on IP protection, including the use of legitimate software) 
has been the catalyst for change.  And, of course, there is 
the need for effective enforcement.  Finally, Microsoft 
noted that development of the private sector is also 
important - a domestic constituent base interested in IP 
enforcement is useful in engaging government action. 
 
5. (SBU) Microsoft wants to encourage the GVN to ensure that 
all Government offices use only legitimate software. 
However, cost is clearly a concern for the GVN as well as an 
excuse for the negligible progress the GVN has made in this 
regard.  Microsoft is looking into the possibility of IFI 
funding (ADB, WB etc) or concessionary commercial financing 
for a GVN strategy to implement a legitimate software 
initiative for all or some GVN national government entities. 
Microsoft representatives asked that in our engagement with 
the GVN - perhaps at the next BTA Joint Committee meeting in 
May - we suggest that a positive and tangible step the GVN 
could take on IPR would be to have the Prime Minister send a 
letter to all government agencies instructing them to use 
only legitimate software. 
 
6. (SBU) Microsoft representatives also highlighted their 
concerns about recent GVN comments that it plans to switch 
to open source software (like Linux) to "fix" its IPR 
problems.  While acknowledging that the decision on what 
type of software the GVN wants to use is up to the 
Government, Microsoft asked us to help convey the message 
that the GVN should not switch to open source for the "wrong 
reasons."  Switching to open source does not insulate the 
GVN from the responsibility of ensuring that all software 
used by the GVN is legitimately licensed, Microsoft 
asserted.  Econoffs noted they had already raised this issue 
with the GVN. 
 
7. Comment:  Many of the factors Microsoft mentions as 
essential for strong IPR protection are beginning to come 
together in Vietnam.  While the private sector still faces 
significant disadvantages vis-a-vis the state-owned sector, 
greater attention is being given to the importance of 
fostering the private sector development each day.  New, 
albeit fledgling, business and music associations are 
cropping up with IPR enforcement at the top of their list of 
priorities.  In addition, donors (including the USAID-funded 
Support for Trade AcceleRation (STAR) Project) and the GVN 
are dedicating significant resources toward revising IPR- 
related legislation, including Vietnam's Civil Code, Civil 
Procedure Code and regulations on remedies.  However, the 
GVN is not "leading by example" on the issue of copyright 
piracy.  Government agencies of all shapes and sizes are 
loaded down with pirated software.  An effort by the GVN to 
move toward comprehensive use of legitimate software - even 
if it is done ministry by ministry - would be a significant 
step forward and we should do everything we can to encourage 
and support such an effort. 
BURGHARDT 


These cables are crucial bits of evidence that show how Microsoft uses politics to get deals rather than rely on technical merit. There is also a subversion of laws in other countries (US-style laws imposed). At a later date we are going to organise all this evidence in our wiki.

Cablegate: “42 Percent of Argentine Firms Use Linux on at Least Some of Their Computers”

Posted in America, GNU/Linux at 3:54 am by Dr. Roy Schestowitz

Cablegate

Summary: In a cable marked “sensitive”, US diplomats look at the digital state which Argentina is in

TECHRIGHTS covered Argentina several times over the years. Argentina, being a south American nation, has been quite GNU/Linux-friendly. Here are some posts that may be relevant to today’s Cablegate cable on “BRIDGING ARGENTINA’S DIGITAL DIVIDE”:

According to the following cable (¶11), “Linux is popular in Argentina due to its low cost, and 42 percent of Argentine firms use Linux on at least some of their computers.” Here is the cable in full:


ZCZCXRO9151
RR RUEHRG
DE RUEHBU #0748/01 0901858
ZNR UUUUU ZZH
R 311858Z MAR 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 4016
INFO RUEHAC/AMEMBASSY ASUNCION 5452
RUEHBR/AMEMBASSY BRASILIA 5254
RUEHCV/AMEMBASSY CARACAS 0887
RUEHLP/AMEMBASSY LA PAZ 4068
RUEHMN/AMEMBASSY MONTEVIDEO 5453
RUEHSG/AMEMBASSY SANTIAGO 5058
RUEHSJ/AMEMBASSY SAN JOSE 0428
RUEHRG/AMCONSUL RECIFE 0137
RUEHRI/AMCONSUL RIO DE JANEIRO 1940
RUEHSO/AMCONSUL SAO PAULO 2842
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RHEBAAA/USDOE WASHDC
RHMFISS/HQ USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 03 BUENOS AIRES 000748
SIPDIS
SENSITIVE
SIPDIS
SOUTHCOM FOR POLAD AND J5 FOR JUAN RENTA
USDOC FOR 4322/MAC/OLAC/BASTIAN/PEACHER
E.O. 12958: N/A
TAGS: ECON [Economic Conditions], EIND [Industry and Manufacturing], AR [Argentina]
SUBJECT: BRIDGING ARGENTINA'S DIGITAL DIVIDE
¶1. (U) Sensitive but unclassified. Not for Internet
distribution.
-------
Summary
-------
¶2.  (U) Argentina's IT industry is the third largest in
Latin America. Argentina's IT industry enjoys many
advantages and is growing quickly. IT companies expect
continued rapid growth and are investing heavily in
Argentina. There has been a boom in the number of small
U.S. hardware and software companies in Argentina in the
past two years. The growth in Argentina's IT industry has
left many Argentines behind. The GOA has instituted a
number of projects with mixed results to combat this digital
divide. Private companies are also sponsoring programs to
bridge the digital divide, and strong competition in both
the hardware and software sectors is driving prices down.
The private sector will likely prove more able than the GOA
to bridge Argentina's digital divide. End summary.
--------
Overview
--------
¶3.  (SBU) Argentina's IT industry is the third largest in
Latin America. Total IT production amounted to USD 1.3
billion in 2005, of which USD 250 million were exports. The
IT industry is responsible for one percent of Argentine GDP,
and employs over 48,000 Argentines, or 1.44 percent of the
total labor force. The largest IT consumers within
Argentina are the financial, government, telecom, oil, and
manufacturing industries. IBM, which is the largest IT
company in Argentina in terms of both sales and employment,
has 3,500 Argentine employees. IBM and EDS provide services
to many Latin American clients from Argentina. Intel will
soon begin its first production in South America with a
software development facility in Cordoba. Microsoft
maintains a presence in Argentina only for public relations
and marketing purposes. Smaller domestic and foreign firms
produce software, hardware, and services for mostly local
clients.
------------
Rapid Growth
------------
¶4.  (U) Argentina's IT industry enjoys many advantages.
Argentine workers are comparatively well educated. Since
the 2002 devaluation of the peso, Argentine skilled labor
has been competitively priced. The relatively large
domestic market allows firms to gain experience in the local
market before exporting, while the predominance of the
Spanish language gives Argentine companies access to
important export markets.
¶5.  (U) Argentina's IT sector is growing quickly. IT grew
29.3 percent in 2005, roughly triple the rate of the
Argentine economy as a whole, and generated 20,000 new jobs.
Domestic and export sales contributed equally to this growth
as exports increased 30 percent in 2005. Revenues from
hardware grew 37.6 percent, while revenues from software
grew 22 percent and revenues from services grew 20 percent
in 2005.
¶6.  (SBU) IT companies expect continued rapid growth and are
investing heavily in Argentina. IBM added 750 employees in
2005 and expects to add 500 employees per year over the next
four years. IBM would like to double this number of new
employees, but it is limited by the number of qualified
graduates, its ability to develop new managers to supervise
these new employees, and available office space. IBM is
currently looking for a local company to build and lease a
BUENOS AIR 00000748 002 OF 003
large new office building to house its new employees. Intel
recently began work on a multimillion-dollar facility in
Cordoba for 450 employees.
----------------------------------------
Explosive Growth of Small U.S. Companies
----------------------------------------
¶7.  (U) There has been a boom in the number of small U.S.
hardware and software companies in the Buenos Aires
neighborhoods of Palermo, Palermo Chico and Palermo
Hollywood during the past two years, according to industry
sources. Most of the firms are subsidiaries of U.S.
companies that are based in Silicon Valley, California,
Austin, Texas, and Raleigh, North Carolina. They generally
employ 50 to 100 people and maintain a relatively low
profile. This expansion is also being felt in the
provinces. For example, a government official in the
province of Salta recently told the Economic Counselor about
a former Argentine employee of a U.S. software company who
now operates a company in Salta providing software for U.S.
companies. This is one of several such companies in that
province. U.S. firms move operations or outsource to
Argentina to take advantage of Argentina's relatively high
educational levels and low labor costs.
--------------
Digital Divide
--------------
¶8.  (U) The rapid growth in Argentina's IT industry has left
many Argentines behind. The population of Internet users
grew 40 percent in 2005, but computer use in Argentina is
still limited to the middle and upper classes. Only ten
million Argentines, or roughly a fourth of the population,
have regular access to the Internet. The vast majority of
these computer users are concentrated in the nation's
largest cities, according to a survey by Microsoft.
Approximately 20 percent of the population does not have an
equal opportunity to access the Internet because broadband
has not reached their poorer neighborhoods.
¶9.  (U) The GOA has instituted a number of projects with
mixed results to combat this digital divide. Argentina's
Ministry of Education together with the Massachusetts
Institute of Technology launched "One Laptop Per Child" in
2005. This program intends to distribute between 500,000
and 1 million low-cost laptops to poor children in
Argentina. Another Ministry of Education plan launched in
2005 intends to distribute 100,000 computers to 12,000
schools. The GOA also partly revived a plan to establish
Community Technological Centers (CTCs) after abandoning it
during the recession of 1999-2002. There are now 1,350 CTCs
in Argentina. A lack of funding and training hampers these
programs, according to the director of the Argentine
Telework Association and the director of projects for the
educ.ar program. An estimated 71 percent of Argentine
educators have never used the Internet, and only 3 percent
of Argentine Internet users regularly access the Internet
from an educational institution. By contrast, 60 percent of
Internet users go online in cybercafs, 41 percent go online
at home, and 14 percent go online at work, with many having
more than one mode of Internet access.
¶10.  (U) Private companies are also sponsoring programs to
bridge the digital divide. The "My PC Program," jointly
funded by 40 mostly Argentine firms, is designed to bridge
the digital divide by providing low-cost PCs to the nation's
poor. Seven of the eight largest supporters are U.S. firms,
including Intel, Microsoft, and HP. The eighth firm is
South Korean. The program sold more than 20,000 PCs for
approximately USD 800 per unit in April 2005. Other
programs, such as Intel's "Quality in Teaching" program and
BUENOS AIR 00000748 003 OF 003
Microsoft's "Alliance for Education Program" are also
bringing Internet access to the nation's poor.
¶11.  (U) Strong competition in both the hardware and
software sectors is driving prices down. The hardware
market in Argentina is extremely competitive and offers low
profit margins. The number of PC manufacturers with sales
and service networks in Argentina has increased from four to
17 in recent years. The software market is also
competitive. Linux is popular in Argentina due to its low
cost, and 42 percent of Argentine firms use Linux on at
least some of their computers. Microsoft released a Spanish-
language Windows XP "starter edition" to compete with Linux,
further reducing the cost of a new Internet-ready PC. The
impact of this competition is clear. Sales of PCs for home
use increased 93 percent to reach over one million units in
2005.
-------
Comment
-------
¶12. (U) The results of GOA programs to bridge the digital
divide have so far been disappointing. The private sector
will likely prove more successful in this area. End
Comment.
¶13. (U) To see more Buenos Aires reporting, visit our
classified website at:

http://www.state.sgov.gov/p/wha/buenosaires

A 2009 survey in Italy showed that OpenOffice.org usage in the country is 50% among companies, with GNU/Linux at 63%. Just how understated is the impact of Free software as viewed from the States? A lot of the English-speaking news comes from there, pushing aside other claims and measurements, thus establishing a biased consensus.

Cablegate: US Diplomats and Microsoft Fight GNU/Linux in Venezuela, Insist Open Source is Not Commercial, Label Advocates ‘Conspiracy Theorists’

Posted in America, GNU/Linux, Microsoft at 3:35 am by Dr. Roy Schestowitz

Cablegate

Summary: A lot of FUD is being spread by Microsoft along with the US government in order to suppress adoption of Free software in Venezuela’s government

A FAMOUS fallacy, one which seeks to portray Open Source as the opposite of “commercial” (rather than proprietary), has been spread by Microsoft and we are finding this pattern of FUD even in diplomatic cables that say open source is “a “revolutionary” alternative to profit-driven commercial software”. Well, at least they said “revolutionary” and not “terrorist”. The cable seeks to daemonise nations that don’t want to depend on the United States digitally. How dare they?

Further down in this Cablegate cable there is a long FUD section about “Commercial v. Open-Source”. It starts by saying that “Tascon recently attended the Global Leadership Forum in Washington, DC as a guest of Microsoft, where he met Bill Gates.”

The section titled “Conspiracy Theories” says: “Microsoft’s General Manager, Gonzalo Fernandez (protect), showed EconOff an internal PDVSA memo which claimed that all U.S. software companies had a “back door” mechanism whereby the U.S. government could at any time access information, citing the supposed CALEA Law (United States Law of Assistance in Communications for Security Systems). The memo made a claim that the USG simultaneously shut down all Microsoft operating systems in Iraq before attacking, and then detailed various NSA and CIA hacker programs. The memo concludes that the BRV should not contract any services from American providers.”

Watch how much FUD the cable ends with (lies mixed with distortion of facts): “If the law passes in current form, the provisions for mandatory use of OSS will have grave repercussions for BRV operations. By nature, OSS requires code sharing, and could pose security concerns for important BRV institutions, such as PDVSA, EDELCA (the electric company), or CADIVI (the Foreign Exchange Control Authority). Though OSS software has only a one-time license fee — and therefore seems more cost-effective — critics claim the system can be less-user friendly and requires frequent technical support (which can often be costlier than licensing). According to Microsoft, no government in the world has successfully used Linux for large operations (Brazil and Cuba reportedly attempted this, but then abandoned the effort). The issue of BRV software has become political — with PQrez trying to bill OSS as a “revolutionary” software that would promote endogenous development, and Tasc”n siding with commercial software providers by promoting “neutrality” in selection of operating systems. Most National Assembly deputies are uninformed on the issue and though the law was to be presented in second session in early May, there has been no news as of yet.”

“[P]romoting “neutrality” in selection of operating systems,” eh? That’s rich. It’s like Microsoft’s misuse of the word “choice”.



VZCZCXRO1794
RR RUEHAO
DE RUEHCV #1778/01 1671618
ZNR UUUUU ZZH
R 161618Z JUN 06
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 5084
INFO RUEHBO/AMEMBASSY BOGOTA 6655
RUEHBU/AMEMBASSY BUENOS AIRES 1295
RUEHLP/AMEMBASSY LA PAZ 2110
RUEHPE/AMEMBASSY LIMA 0355
RUEHSG/AMEMBASSY SANTIAGO 3598
RUEHAO/AMCONSUL CURACAO 0872
RUEHGL/AMCONSUL GUAYAQUIL 0518
RUEHSO/AMCONSUL SAO PAULO 0026
RUCNDT/USMISSION USUN NEW YORK 0295
RUCPDOC/DEPT OF COMMERCE
RUEHUB/USINT HAVANA 0796
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 CARACAS 001778
SIPDIS
SIPDIS
USDOC FOR ITA MARGARET KESHISHIAN
E.O. 12958: N/A
TAGS: ECON [Economic Conditions], KIPR [Intellectual Property Rights], VE [Venezuela]
SUBJECT: BRV INFORMATION TECHNOLOGY DRAFT LAW AND THE
OPEN-SOURCE SOFTWARE DEBATE
This message is sensitive but unclassified, please treat
accordingly.
-------
Summary
-------
¶1.  (U) As part of an ongoing effort by the BRV to promote
open-source software (OSS) as a "revolutionary" alternative
to profit-driven commercial software, the National Assembly
has proposed a draft Information Technology Law. The
legislation would require government entitites at all levels
(plus their contractors and anyone receiving public funds) to
use OSS. Currently, most of the BRV uses commercial
software, whose largest provider in Venezuela is Microsoft.
IBM is the country's largest provider of OSS. Deputy Luis
Tascon, who was hosted by Microsoft in the U.S. earlier this
year, is fighting the mandatory OSS provisions in the law.
Felipe Perez, an influential Chavista ex-minister (and owner
of a Linux distribution company) is one of the main
proponents of the law. Fighting between the two factions has
stalled the drafting of the final version. End summary.
------------------------
"Revolutionary" Software
------------------------
¶2.  (U) The BRV began a trend years ago to favor open-source
software (OSS) over commercial software. The rationales for
the move are the perception that intellectual property rights
are against the "revolution," that open-source software is
better for the consumer, and that it would lower costs for
the BRV. In 2004, President Chavez issued a decree requiring
all executive-branch agencies to migrate their operating
systems to OSS. However, implementation has been lackluster,
and often users violate the terms of the software (such as
making open modifications or using without license).
Microsoft is the top provider of commercial software
(Windows) in Venezuela, while IBM is the main provider of OSS
(Linux).
¶3.  (U) The Information Technology draft law (Ley de
Infogobierno) was passed in first discussion in the National
Assembly on August 2005. It mandates exclusive use of OSS in
all government entities (from the executive to municipal
government), the Central Bank, public universities, companies
who receive public funds or are directed by a government
employee (at any level), and companies or persons who provide
temporary services or goods to the government or to
government employees. It also requires migration of existing
platforms to OSS, establishes criminal sanctions for
non-compliance, and creates a National Commission for
Information Technology (CONATI) that would have
confidentiality agreements with software providers.
SIPDIS
-------------------------
Commercial v. Open-Source
-------------------------
¶4. (U) In April 2006, the National Assembly established a
working group, led by Deputy Luis Tascon, to review the draft
law. The group was comprised of private sector companies,
business chambers, labor groups, PDVSA, OSS groups, and
universities. Two camps emerged. One group, under Tascon,
has pushed to amend the law to allow each government entity
to choose between OSS and commercial software according to
their needs. Tascon recently attended the Global Leadership
Forum in Washington, DC as a guest of Microsoft, where he met
Bill Gates. (Comment: It is ironic that Tascon, who is
infamous for publicly disseminating personal information on
those who voted against Chavez, would champion licensed
software. End Comment).
¶5. (U) The other group is comprised of proponents of OSS,
led by Felipe Perez Marti, President of the Venezuelan
Association of Open-Source Software (and former Minister of
Planning). They strongly favor using OSS exclusively, as
stipulated by the draft law. Perez, the original drafter of
CARACAS 00001778 002 OF 002
the pro-OSS 2004 decree, is the owner of SOLVE (Free Software
of Venezuela), a Linux distributor, whose board (known as
"Los Felipillos") is composed of many BRV leaders, reportedly
including the Minister of Education. According to Microsoft,
Perez's company is positioned to provide the BRV with Linux
and all the technical support. His company would
exponentially benefit from mandated government use of OSS,
which is currently minimal. IBM's Venezuela operations
manager noted that they have great relations with the public
sector (their largest client), but expressed concern that the
BRV wants to buy the software but not agree to maintenance
contracts with IBM.
¶6. (U) During a May 5 working group meeting, Perez publicly
called Tascon a "traitor." Tascon expelled him from the room
and then declared he would finish drafting the law behind
closed doors due to the "impossibility of consensus" between
commercial software providers and OSS groups. The media has
largely portrayed this as Tascon barring Perez for personal
reasons.
-------------------
Conspiracy Theories
-------------------
¶7. (SBU) Microsoft's General Manager, Gonzalo Fernandez
(protect), showed EconOff an internal PDVSA memo which
claimed that all U.S. software companies had a "back door"
mechanism whereby the U.S. government could at any time
access information, citing the supposed CALEA Law (United
States Law of Assistance in Communications for Security
Systems). The memo made a claim that the USG simultaneously
shut down all Microsoft operating systems in Iraq before
attacking, and then detailed various NSA and CIA hacker
programs. The memo concludes that the BRV should not
contract any services from American providers.
-------
Comment
-------
¶8. (SBU) If the law passes in current form, the provisions
for mandatory use of OSS will have grave repercussions for
BRV operations. By nature, OSS requires code sharing, and
could pose security concerns for important BRV institutions,
such as PDVSA, EDELCA (the electric company), or CADIVI (the
Foreign Exchange Control Authority). Though OSS software has
only a one-time license fee -- and therefore seems more
cost-effective -- critics claim the system can be less-user
friendly and requires frequent technical support (which can
often be costlier than licensing). According to Microsoft,
no government in the world has successfully used Linux for
large operations (Brazil and Cuba reportedly attempted this,
but then abandoned the effort). The issue of BRV software
has become political -- with PQrez trying to bill OSS as a
"revolutionary" software that would promote endogenous
development, and Tasc"n siding with commercial software
providers by promoting "neutrality" in selection of operating
systems. Most National Assembly deputies are uninformed on
the issue and though the law was to be presented in second
session in early May, there has been no news as of yet. END
COMMENT.
WHITAKER

Microsoft is just trying to associate GNU/Linux with AK-47s, “conspiracy theorists”, and an attack on corporation. Why is the government playing along with this? Does it use Microsoft for colonisation (digital) of south America?

Cablegate: Tunisia Chooses GNU/Linux, So Microsoft Says That GNU/Linux Encourages ‘Piracy’

Posted in Africa, Cablegate, GNU/Linux, Microsoft at 3:08 am by Dr. Roy Schestowitz

Cablegate

Summary: A look at how Microsoft representatives describe GNU/Linux behind the scenes

THE scandal of Microsoft in Tunisia has received a lot of press attention. It now has a detailed Wikipedia page about it. Techrights looked into several other cables from Tunisia and found the following Cablegate cable which says: “Microsoft gave the example of PC procurement, in which the GOT procurement commission does not specify an operating system in their RFPs. This results in the PCs being shipped with the Linux,s open source operating system, which does not support Microsoft software. The Microsoft representative argued that this has encouraged piracy and resulted in GOT PCs using pirated Microsoft software. She continued that the fact that the EU Commission and the African Development Bank accept these GOT procurement laws only encourages the GOT to maintain government procurement on lowest cost basis.”

To Microsoft, “Linux” and “piracy” are interchangeable. Microsoft wants officials to believe that nothing except Windows can ever be used. Here is the cable in its entirety.


VZCZCXYZ0002
PP RUEHWEB
DE RUEHTU #1286/01 2640644
ZNR UUUUU ZZH
P 210644Z SEP 07
FM AMEMBASSY TUNIS
TO RUCPDOC/USDOC WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 3899
INFO RUCNMGH/MAGHREB COLLECTIVE PRIORITY
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0928

UNCLAS TUNIS 001286
SIPDIS
SENSITIVE
SIPDIS
STATE FOR EEB (DIBBLE), NEA/MAG (HOPKINS AND HARRIS)
STATE PASS USTR (BURKHEAD)
USDOC FOR (VINEYARD AND MASON), ADVOCACY CTR (JAMES),
USDOC PASS USPTO (ADAMS, BROWN AND MARSHALL)
CAIRO FOR FINANCIAL ATTACHE (SEVERENS)
LONDON AND PARIS FOR NEA WATCHER
EB/CBA (WINSTEAD), EB/TRA/AN(FINSTON),
CASABLANCA FOR FCS (ORTIZ)
E.O. 12958: N/A
TAGS: ECON [Economic Conditions], EFIN [Financial and Monetary Affairs], ETRD [Foreign Trade], TS [Tunisia]
SUBJECT: TUNISIA: US BUSINESSES BRIEF ECONOMIC DELEGATION
ON BUSINESS CLIMATE
REF: A. TUNIS 1249
B. TUNIS 1261
-------
Summary
-------
¶1. (SBU) During the September 9-12 visit of an interagency
business delegation (reftels), EEB PDAS Dibble met with
representatives from a cross-section of US businesses
currently operating in Tunisia to discuss the business
climate in general and the issues that impede their
operations. PDAS Dibble gave an overview of the
delegation's meetings with the GOT and the unique nature of
this delegation. She indicated that the primary purpose of
this visit was to push the GOT for improvements in the
investment climate and to discuss the way forward in the
US/Tunisia bilateral economic relationship. Department of
Commerce DAS Holly Vineyard outlined the IPR points that were
presented to GOT representatives from all relevant ministries
attending the delegation's meeting with the Minister of
Development and International Cooperation. USTR Director for
European and Middle Eastern Trade Affairs, Paul Burkhead
outlined the Trade Investment Framework Agreement (TIFA) and
the USG's objective of an eventual Free Trade Agreement (FTA)
between the United States and Tunisia. US companies said
that Tunisia is a central location for entering other
markets, but bureaucracy and lack of transparency hinder
their expansion. End Summary.
-----------------------------
What Tunisia has Going for It
-----------------------------
¶2. (SBU) Nearly all of the US business representatives
agreed that Tunisia is an attractive base from which to
target and serve the Mahgreb, European, and Sub-Saharan
African markets. They emphasized that the business climate
is improving and the mobility and quality and talent of
available human resources is above average. Tunisian
employees are highly educated and interested in learning new
technologies. The US IT firms represented opined that
Tunisian interest in new technologies presents an opportunity
to sell and to install the latest technologies. Business
representatives also said that the comparatively favorable
cost of labor also makes Tunisia an attractive venue for
investment.
--------------------------------
Frustrating Impediments to Trade
--------------------------------
¶3. (SBU) While Tunisia has many good qualities, it is the
domestic impediments to operating a business in Tunisia that
have some US businesspeople thinking twice about investing in
or expanding their investment in Tunisia. Issues raised
included a lack of transparency and predictability, lack of
access to the local market, GOT procurement laws, limits on
the number of expatriate employees permitted in country, visa
issues, the slowness and arbitrarily high price of internet
service, and the language barrier.
-------------------------------
Transparency and Predictability
-------------------------------
¶4. (U) Company representatives explained that GOT
decision-making is extremely slow and there is no central
contact for a company to approach and receive a definitive
answer to their particular concerns. Information on upcoming
projects or tenders is also difficult to obtain and major
projects are often pre-awarded before a tender becomes
public. One US representative stated that the lack of
predictability affected his ability to do long-term business
planning/forecasting. Participants noted that, because US
businesses forecast based on risk, the lack of predictability
in Tunisia makes them more reticent to invest.
--------------------------------------------- -------------
Access to the Local Market & Government Procurement Policy
--------------------------------------------- -------------
¶5. (U) In general, the GOT seldom permits foreign businesses
to compete on the local market but instead encourages FDI in
the off-shore and manufacturing for export sectors. US
companies told PDAS Dibble that establishing a subsidiary
branch in Tunisia is not cost-effective unless they are
allowed to compete on the local market. There are several US
companies who have been authorized to compete on the local
market. They admitted that it was neither easy nor quick to
obtain such permission, but indicated that GOT ministers are
open to hearing about specific proposals. Further, if a
company can demonstrate the benefits of its
projects/products, the relevant ministers can obtain
authorizations to compete on the local market. Several of
the high tech companies said that the product registration
and certification process is extremely long and must be
conducted for each reseller. In order to simplify this
process, they would like to see a homologation law passed
which would authorize registration and certification on a per
product basis.
¶6. (SBU) Companies also complained that the GOT government
procurement law and policy, which is based on lowest price
rather than best quality, excludes them from competing in the
marketplace. A Prime Ministry commission controls
procurement and, instead of requiring that a product meet
certain specifications or technical standards, its requests
for proposals (RFPs) always go for the lowest priced product.
US companies selling quality products cannot compete on a
price basis. Microsoft gave the example of PC procurement,
in which the GOT procurement commission does not specify an
operating system in their RFPs. This results in the PCs
being shipped with the Linux,s open source operating system,
which does not support Microsoft software. The Microsoft
representative argued that this has encouraged piracy and
resulted in GOT PCs using pirated Microsoft software. She
continued that the fact that the EU Commission and the
African Development Bank accept these GOT procurement laws
only encourages the GOT to maintain government procurement on
a lowest cost basis.
-----------------------
Authorized Expatriates
-----------------------
¶7. (SBU) Tunisian law currently allows foreign companies to
obtain visas for only four expatriate employees at any given
time, but companies report that this number can be increased
on a case-by-case basis. (Note: GOT officials had indicated
to EmbOffs last year that the law was going to be updated to
allow 10 expatriates per company, but this has not yet been
implemented. End Note.) This limitation on expatriates is a
problem for US companies particularly when they are initially
starting up their operations in Tunisia. For example,
Parsons Corporation, a major US engineering firm currently
considering investing in Tunisia, said that this restriction
would present a problem. The Parsons representative argued
that his company has a quality product to deliver and an
excellent reputation to maintain. Thus, if it were to invest
in Tunisia, Parsons would need to bring in a minimum of 12
expatriate Parsons engineers per project. The GOT has told
Parsons that the number of expatriates allowed is negotiable,
but the company would prefer that the law be repealed, so
that there would be not uncertainty. Most US companies
present concurred. Similarly, US companies mentioned that
their ability to provide quality services to their clients
was impeded by the difficulty some of their expatriate staff
face in obtaining visas to enter Tunisia on a temporary basis
in order to train Tunisian employees or to provide expertise
on a particular project.
---------------
Internet Access
---------------
¶8. (U) US companies said that 95 percent of business today
is conducted over the Internet. Thus, reliable and
cost-effective Internet access was paramount to their
success. Most of the companies present at the roundtable
complained about the slow speed of Internet connections in
Tunisia and the high cost of dedicated leased lines between
two points. Another issue related to Internet access was
GOT's encryption requirement that all encryption keys must be
provided to the National Digital Encryption Agency (ANCE).
Providing such information was described as a nonstarter by
US companies providing services where protection of fiscal or
personal data was critical. While most companies indicated
that they could find ways around this requirement, they
nonetheless argued that the encryption key requirement should
be abolished.
--------
Language
--------
¶9. (U) Several participants raised English language
capabilities of the Tunisian work force as an important
factor when considering whether to set up business operations
in Tunisia. Acknowledging that most US company executives
are not multi-lingual and conduct business in English, all
companies said that English language capability was a
necessary element to allow the Tunisian subsidiary management
to effectively communicate with its employees and with its US
headquarters. Several Tunisian nationals representing US
companies noted, however, that the GOT recognizes the
importance of English and has made efforts to address this
issue. They pointed out that Tunisian schools now encourage
English language study from the primary to the university
level.
-------
Comment
-------
¶10. (SBU) Although the business roundtable was a late
addition to the economic delegation,s program, it proved to
be an excellent opportunity for all. Members of the
delegation were able to learn first-hand about the benefits
achieved and drawbacks faced by US businesses in Tunisia. At
the same time, US businesses were able to learn about USG
advocacy for an improved business climate in Tunisia. The
general consensus drawn from this discussion seems to be that
despite the shortcomings, US companies investing in Tunisia
have made the right decision. End Comment.
¶11. (SBU) This cable has been cleared by EEB/PDAS Dibble.
GODEC


Worth noting is the part which says: “Business representatives also said that the comparatively favorable cost of labor also makes Tunisia an attractive venue for investment.”

This is how they value people, eh?

Cablegate: US Mission to Brunei Changes Laws to Suit Microsoft, Confiscate Equipment

Posted in America, Cablegate, Microsoft at 2:49 am by Dr. Roy Schestowitz

Cablegate

Summary: Another fine and rather recent example of US government intervention in Microsoft cases overseas

THE following Cablegate cable is from last year, so it is relatively recent. It shows Microsoft using the Business Software Alliance (BSA) to hammer on a country where-unpaid for copies are assumed to be lost sales (which they are not, it is a common fallacy) and people are being hurt after intervention from Microsoft’s government, demonstrating kowtowing yet again.

Here is the full text:


VZCZCXYZ0001
RR RUEHWEB

DE RUEHBD #0018 0270813
ZNR UUUUU ZZH
R 270813Z JAN 10
FM AMEMBASSY BANDAR SERI BEGAWAN
TO RUEHC/SECSTATE WASHDC 4769
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHBK/AMEMBASSY BANGKOK 2095

UNCLAS BANDAR SERI BEGAWAN 000018 
 
SIPDIS 
 
STATE PASS FOR EAP/MTS/COPPOLAMG, EEB/TPP/IPE/URBANJ 
STATE PASS USTR/EHLERSK 
STATE PASS FOR USPTO 
BANGKOK FOR FCS/NESSJ 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD, KIPR, ECON, EINV, USTR, BX 
SUBJECT: Microsoft Finds Light At The End Of The 
IPL Tunnel 
 
1.(SBU)  The U.S. Mission to Brunei and Ambassador Todd's relentless 
pursuit of advancing Intellectual Property Rights (IPR) over the 
past year by the U.S. Mission to Brunei along with USTR's able 
assistance showed a real dividend this week when Microsoft won a 
landmark, first ever case against a Brunei IT firm January 26, 2010. 
 EcoPrime Networks, an IT training institution, became the first 
Brunei firm to be convicted under Brunei's Intellectual Property 
law.  The firm has to cough up a fine of B$10,000 on top of losing 
most of their IT equipment, which was confiscated in the raid by the 
Police in September 2008.  End Summary 
 
2. (SBU)  After more than a year of litigation processing, Microsoft 
can claim a tangible victory and send a serious shot across the bow 
to other would-be vendors and end users of illegal pirated software 
in Brunei.  EcoPrime Networks, an IT training institution, received 
a painful lesson that times are changing in Brunei.  The modest fine 
of $10,000 Brunei is seriously augmented by the loss of 90 computers 
and servers along with 200 copies of illegal software.  These 
combined losses in addition to their credibility as a legitimate 
training facility will serve as a visible deterrent for other such 
potential violators.  Senior Director for Anti-Piracy (Asia Pacific) 
Tarun Sawney of the Business Software Alliance was quoted as saying, 
"This is a reminder that even companies that use pirated software 
are breaking the law and subject to prosecution.  Businesses must 
stay legally compliant and this includes ensuring they continue to 
use only legal and genuine software." 
 
3. (SBU) This successful conviction and sentencing of EcoPrime 
combined along with the ongoing successes of Recording Industry 
Malaysia's (RIM) actions against pirated music, are both strong 
messages to the local community that rights holders and law 
enforcement will not hesitate to take action on IPR infringement. 
These recent improvements are directly related to the multiple 
efforts taken by US Embassy Brunei to educate both law enforcement 
and legal entities, not to mention the general public as to the 
dangers of violating such rights.  The Microsoft case should be an 
encouragement to American rights holders (like the Motion Picture 
Association (MPA)) to engage with local authorities to create a 
piracy-free environment for their products. Note: USTR 
representative Karl Ehlers and members of the MPA will visit Brunei 
February 9-10 to open such a dialogue directly with Brunei officials 
at the Attorney General's Chambers. End Note.  Ambassador Todd and 
U.S. Embassy Brunei will continue to lead the charge on this key 
issue for Brunei especially as preparations commence for this year's 
Special 301 Watch List report. 
 
 
TODD 


Yet more proof that software is political and even imperialistic when it wants to. Brunei would be better off respecting Free software and not so-called “IPR”.

Cablegate: Microsoft Receives Complaints for Censoring Search Results in Hong Kong Without Government Demands

Posted in Asia, Cablegate, Microsoft at 2:35 am by Dr. Roy Schestowitz

Cablegate

Summary: Insight into Microsoft’s censorship in China/Hong Kong and what was causing it (or not causing it)

CENSORSHIP in search is a subjective issue and in order to understand it better, one might wish to know who is pressuring who.

A manager from Microsoft “insisted Microsoft was not asked by the Hong Kong government or any other government to implement filtering but then said she would have to confirm this. She added that Microsoft had used this filtering functionality since Bing’s launch but that the strict setting in some Asia countries was implemented only in September 2009.”

It is also said “that Microsoft had not received any customer complaints or inquiries about the strict SafeSearch setting used in Hong Kong until the SCMP article appeared. She also noted that her office had received inquires from the Hong Kong government.”

Here is the full Cablegate cable.


VZCZCXRO2783
PP RUEHCN RUEHGH
DE RUEHHK #0112 0201048
ZNR UUUUU ZZH
P 201048Z JAN 10
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC PRIORITY 9438
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS HONG KONG 000112 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM, EEB/CIP, OES/STC AND OES/PCI 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, HK, TINT, SOCI, CH 
SUBJECT: HONG KONG YAHOO AND MICROSOFT BLOCK ADULT CONTENT 
 
1.  (U) Hong Kong's major English daily, the South China 
Morning Post (SCMP), reported January 17 that both 
Yahoo.com.hk and Microsoft's Bing search engine in Hong Kong 
were now blocking adult content through the use of strict 
"SafeSearch" filters.  Users of the Yahoo-owned Flickr photo 
sharing website in Hong Kong were also reportedly prohibited 
from posting or sharing adult content.  Although users in 
most jurisdictions are able to customize search parameters to 
include or exclude adult content, Hong Kong users do not have 
that option.  The SCMP reported both Yahoo and Microsoft 
attributed their strict filtering to their desire to respect 
"local customs, norms and laws," and noted that both 
companies enforced similar restrictions in South Korea, India 
and Singapore. 
 
2.  (SBU) Yahoo! Asia Director for Public Policy Patrick Chu 
confirmed to EconOff that Yahoo! did use SafeSearch to filter 
pornographic images from its Hong Kong searches.  He denied 
the SCMP implication that this was a new policy, however. 
Yahoo! had been filtering adult content since 2007, said Chu. 
 Hong Kong law makes it an offense to publish obscene 
articles or pictures.  In the wake of legal cases in 2007 and 
2008 that resulted in fines for individuals convicted of 
linking to or posting lewd material, Yahoo! decided to filter 
searches to protect its local staff and directors, said Chu. 
Yahoo!'s decision to filter this material was purely its own, 
he said, and denied that the Hong Kong government had ever 
contacted Yahoo! Asia regarding its treatment of adult 
content.  Chu insisted that Yahoo! Asia was committed to 
internet freedom and did not filter searches for other 
content.  The SCMP article was the first time anyone had 
raised the issue since Yahoo! Asia began using SafeSearch, 
said Chu. 
 
3.  (SBU) Microsoft's Director of Legal and Corporate Affairs 
Winnie Yeung similarly told EconOff that Microsoft used 
SafeSearch to filter adult content from its Hong Kong 
searches.  Yeung felt the SCMP article was misleading since 
the strict SafeSearch setting was used in several Asian 
countries, not just Hong Kong.  The reason was that these 
countries were considered "more conservative."  She insisted 
Microsoft was not asked by the Hong Kong government or any 
other government to implement filtering but then said she 
would have to confirm this.  She added that Microsoft had 
used this filtering functionality since Bing's launch but 
that the strict setting in some Asia countries was 
implemented only in September 2009.  Yeung stated that 
Microsoft had not received any customer complaints or 
inquiries about the strict SafeSearch setting used in Hong 
Kong until the SCMP article appeared.  She also noted that 
her office had received inquires from the Hong Kong 
government. 
 
 
MARUT 


Around that same time Microsoft was slammed for censoring results not just for sexual content. Some called for a boycott, even in the New York Times.

Cablegate: US Diplomats Offer to Help Microsoft Dodge European Regulators

Posted in Antitrust, Cablegate, Europe, Microsoft at 2:19 am by Dr. Roy Schestowitz

Cablegate

Summary: Unnamed politicians offer to help Microsoft escape scrutiny from the EU Commission (for its antitrust abuses)

AMID trouble for its corruption regarding OOXML (with an impending European investigation), Microsoft hired Vassallo to play politics.

The following Cablegate cable shows us that when Microsoft was working on the browser ballot, for example, the US government got involved. It also offered to get involved by pressing on the EU Commission.


VZCZCBSI597
PP RUEHC RUCPDOC RUEAWJA RHEHNSC RUCNMEM RUCNMEU
DE RUEHBS #1310/01 2721346
ZNR UUUUU ZZH
P 291346Z SEP 09
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCNMEU/EU INTEREST COLLECTIVE
UNCLAS SECTION 01 OF 03 BRUSSELS 001310 
 
SENSITIVE 
SIPDIS 
 
DOJ FOR CALDWELL HARROP 
DOC FOR DAVID DEFALCO 
STATE FOR EUR/ERA, EEB/TPP/MTA, EEB/OIA 
STATE PLEASE PASS TO USTR/DAVID WEINER AND FTC/JOHN PARISI 
 
NOT FOR INTERNET DISTRIBUTION 
 
E.O. 12958:  N/A 
TAGS: ECIN, ECON, EINT, ECPS, ETRD, EUN 
SUBJECT: MICROSOFT: CLOSE TO FINAL DEAL WITH EU TO END COMPETITION 
CASES 
 
1. (SBU) SUMMARY.  John Vassallo, Microsoft (MS) VP for EU Affairs, 
told Charge Sept. 24 that the company "is very close" to concluding 
an overarching deal with the European Commission on three antitrust 
issues: 1) the Commission's case against Microsoft's tying of 
Internet Explorer to Windows; 2) a five-year deal on sharing 
interoperability information with rival firms; and 3) a 10-year 
agreement to support PDF and other file format compatibility with 
Microsoft's own file format.  Vassallo said there are only a few 
small issues to resolve over the tying case, which will involve MS 
agreeing to provide within the EU all new Windows computer buyers, 
and all customers upgrading Windows versions, a "ballot screen" 
whereby customers can select from 12 internet browsers to use as 
their default browser.  Customers would also be able to deactivate 
Internet Explorer completely.  This element of the deal will require 
a four-week EU market test and formal approval by the College of 
Commissioners, which MS hopes for by October 28. 
 
2. (SBU) Vassallo said the whole package represents a historic 
opportunity for the Commission and Microsoft to resolve past 
disputes and move into a new era of cooperative relations. 
Commissioner Neelie Kroes has been publicly advertising her interest 
in concluding the total deal (as part of her legacy before she 
leaves the Commission), increasing its likelihood of success. 
Charge asked if MS requested U.S. engagement; Vassallo said not 
directly, but stressed the value of emphasizing that reaching a deal 
would be good for all parties concerned.  After an 11-year battle 
involving nearly $2.5 billion in Commission fines against Microsoft, 
both sides of this epic competition battle may be ready to end 
confrontation and resolve their differences.  END SUMMARY. 
 
MICROSOFT SEES OVERALL AGREEMENT NEAR 
------------------------------------- 
 
3. (SBU) John Vassallo, Microsoft (MS) VP for EU Affairs, told 
Charge d'Affaires and Acting EconCouns September 24 that press 
statements by Competition Commissioner Neelie Kroes and Director 
General Philip Lowe, in the U.S. for conferences, that an overall 
Commission-Microsoft deal is close are correct.  He explained that 
Microsoft and the Commission have been in intensive negotiations 
since July that have brought the two parties close to an overarching 
package agreement on three outstanding antitrust issues (one formal 
and two informal). 
 
THREE ELEMENTS OF PACKAGE DEAL 
------------------------------ 
 
I. FORMAL AGREEMENT ON REMEDIES FOR IE-WINDOWS TYING CASE 
--------------------------------------------- ------- 
 
4. (SBU) The major element of the proposed deal, Vassallo said, is 
Microsoft's proposed remedy for the Commission antitrust case 
against MS tying of Internet Explorer to its Windows operating 
system.  Vassallo briefly recounted the history of the Commission 
case against MS for tying Media Player to Windows, which resulted in 
a 2004 Commission decision and massive (497 million euro) fine 
against Microsoft, which was upheld in 2007 by the EU Court of First 
Instance.  The remedy required by the Commission, that of MS 
offering a version of Windows without Media Player, failed to 
resolve concerns since it was commercially unsuccessful. 
 
5. (SBU) In 2006, Vassallo said, Opera, a small Norwegian browser 
company, filed a similar antitrust complaint over MS tying of IE to 
Windows.  The Commission took up the case, and MS began negotiations 
with the Commission over a solution.  In December, 2008, the two 
sides were close to informal agreement, Vassallo said, but the 
Commission stuck to its desire to have computer makers (OEMs) 
include all major browsers in software bundles for new computers, 
with customers able to choose one as a default browser. 
 
6. (SBU) This agreement was not acceptable to MS, and the Commission 
filed a formal antitrust charge (Statement of Objections) in January 
2009.  The Commission then offered a hearing date that MS could not 
take due to scheduling conflicts, Vassallo said.  Faced with an 
enormous potential Commission fine (2-6 billion euros, retroactive 
to 1996), MS began new informal negotiations with the Commission 
towards a solution. 
 
7. (SBU) In July MS and the Commission came to initial agreement on 
a remedy that would resolve the complaint.  MS agreed to direct all 
new computer buyers within the EU, upon their first connection to 
the Internet, to a "ballot screen" that would allow them to download 
any of12 competing browsers, make it their default browser, and 
deactivate IE if desired.  This would only be true for OEMs who 
include IE as the initial default browser; if OEMs reach a better 
financial deal with another browser maker (e.g. Google) to make that 
browser the default, the customer would not get the ballot screen 
option.  Vassallo added that existing Windows computer users would 
get the same ballot screen and IE deactivation option when upgrading 
their version of Windows. 
 
8. (SBU) This formal agreement to resolve the tying case is subject 
to approval by the College of Commissioners, Vassallo continued, 
which is only possible after a four-week mandatory market test of 
the proposed remedy.  MS hopes to begin this test extremely soon, he 
said, to allow time for formal Commission approval by October 28. 
 
9. (SBU) Vassallo said there are a few very minor issues to resolve 
over this part of the deal, including such points as: required 
security awareness messages for ballot screen users, the order in 
which browser options might be displayed, and the size of different 
logos.  He hoped to resolve these within days and thought none are 
likely to upset a final deal. 
 
10. (SBU) Vassallo clarified that MS will launch Windows 7 in Europe 
on October 22, in advance of likely final approval of the agreement. 
 This would not include a ballot screen option, but if a deal is in 
fact concluded within the following weeks, MS would link Windows 7 
computers automatically back to the ballot screen webpage, so the 
launch timing should not disrupt conclusion of a deal. 
 
II. INFORMAL AGREEMENT ON INTEROPERABILITY 
------------------------------------------ 
 
11. (SBU) Vassallo said that a second part of the deal would resolve 
a Commission investigation, based on a complaint by anti-MS lobby 
group ECIS (which counts Sun, IBM and other U.S. and EU firms as 
members) of MS alleged failure to share adequate code or information 
on understanding MS code to allow MS competitors and develop and run 
products that would work properly with MS operating systems and 
other software.  This agreement will involve MS offering licenses on 
certain code for a nominal fee, posting 75,000 pages on its code on 
the web and establishing labs where competitors' software developers 
can come for instruction on how to develop products to work with MS 
code.  There will also be a rapid arbitration procedure for 
disputes, Vassallo added, and MS will agree to pay 135,000 euros/day 
to operators who cannot get their system to work with MS products 
after recourse to the above. 
 
III. INFORMAL AGREEMENT ON PDF AND OTHER FILE SUPPORT 
--------------------------------------------- -------- 
 
12. (SBU) The third and final part of the package is an agreement 
under which MS will be obliged to support for 10 years compatibility 
of Adobe PDF files and other similar document files with Microsoft's 
Open XML proprietary format.  The support will be 
backwards-compatible, allowing billions of documents in older 
formats to be accessible.  Vassallo noted here the Commission's 
positive July statement on MS efforts to promote interoperability, 
which he said was without precedent. 
 
13. (SBU) Both informal agreements will only come into effect once 
the formal agreement is concluded, Vassallo added. 
 
MICROSOFT: DEAL REPRESENTS "HISTORIC OPPORTUNITY" FOR COMMISSION 
--------------------------------------------- -------- 
 
14. (SBU) Vassallo underscored that the whole package represents a 
historic opportunity for the Commission and Microsoft to resolve 
past disputes and move into a new era of cooperative relations.  If 
the small pending issues for the formal agreement on tying are 
resolved quickly, the Commission can move to the market test. 
Vassallo said that MS had seen a remarkable turnaround in the 
willingness of the Commission to deal directly and openly with 
Microsoft, which he attributed to Commissioner Kroes' strong, 
publicly-stated interest in resolving the Microsoft cases as part of 
her legacy before she leaves the Commission in the next few months. 
 
15. (SBU) Vassallo said his only major fear was that the Commission 
might use the results of the ballot screen market test to come back 
to MS and ask for more concessions/changes before final Commission 
approval.  This could scotch a final deal.  If the deal falls apart, 
the Commission would face the choice of proceeding with a fine and 
forced remedy, which Microsoft would challenge in court. Vassallo 
said he understood that Kroes and DOJ AAG Varney have been in close 
touch on the overall deal. 
 
16. (SBU) The Charge asked about MS outreach to USG officials in 
Washington; Vassallo noted that Microsoft has briefed DOJ on the 
impending settlement.  Charge then asked if MS is requesting direct 
USEU engagement; Vassallo said no, but , but added that if senior 
USEU or visiting USG officials happen to meet with relevant EU 
decisionmakers, they could stress the value of reaching a deal for 
all parties concerned.   The proposed deal is good for the EU, the
market and consumers, Vassallo concluded. 
 
COMMENT 
------- 
 
17. (SBU) Vassallo's story reflects Microsoft's point of view, and 
it is unclear how the Commission sees prospects and potential 
obstacles involved in an overarching package deal on Microsoft's 
competition cases.  Microsoft does have other potential issues in 
Europe, with the possibility of a Commission review of its 
advertising alliance with Yahoo, and with browser competition with 
Google turning increasingly nasty.  Nevertheless, after an 11-year 
battle involving nearly $2.5 billion in Commission fines against 
Microsoft, both sides of this epic competition policy battle may be 
ready to end confrontation and resolve their differences, for now. 
END COMMENT. 
 
MURRAY 


Why can they not let the EU Commission.decide on its own? And never mind the fact that this settlement was rather ineffective as it hardly punished Microsoft for illegally getting market share (breaking competition rules), as we explained in prior years…

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