Ready, and thanks for coming to this session of people are waving, and people I recognize.
This is great.
My name is Karen Sandler.
I'm the Executive Director of the Software Freedom Conservancy.
And as many of you know, I'm a lawyer in Basin, United States, admitted to the State of
New York.
And I've been working in the free software space for a long time, and I often get questions
about US anti-trust and generally anti-trust regulations generally, but I am not an anti-trust
lawyer.
And I don't...
If you want to talk to me about copyright or trademark or non-profits, I am here for
that.
A bunch of other things.
And so, after thinking about what kind of material I wanted most in this room, from all
of the questions that come up again and again and again, and some of the material that came
up earlier in this room as well.
And so, I've asked an anti-trust expert to join us for this FOSDM, and I'm so pleased
to introduce a lot of rather-fird who, if we give her a call, who has worked for some
of the major companies who you may have heard of, but we won't list them now.
They may be some of the monopolies that are supposedly being broken by the DMI.
And so, I just thought we would come and ask some questions so that we could further
just educate ourselves about this issue.
And I think one of the first questions I was asking around what people wanted to know is
anti-trust isn't just a good thing.
Why do you want to anti-trust?
So, and a trust as a concept started, well, I'm going to go back to the origin and the
1880s what people would do very wealthy people would do is they'd buy shares in trust,
you know, as I think of like a family trust, except it was a trust across an industry.
So, standard oil is probably the most famous one from back then, which was it would
be several companies that were all in the same industry and you would buy shares in
that company.
So, what happens when there's sort of a overall trust that is running all the companies
in a particular industry, they all start to look alike.
They set the prices alike, they conspire on policy, they conspire on hiring all of those
things.
And so, in 1890, the Sherman Act was created to essentially break up these trusts and have
a free and fair industry, so that's how you get anti-trust.
So, I'm just going to ask the big question that's all on our minds.
Now, could it be possible that proprietary software could be okay, right, right, I mean,
we know proprietary software is not okay, but for when you look at it from a competitive
standpoint, proprietary software is by definition exclusionary, so what gives a lot of,
why aren't all the proprietary software companies being just busted up?
So, I'm going to give my answer and then I'm going to say something a little bit controversial.
So, I just practice it with that.
One is that, and I'm just talking about protecting a market in industry.
It's not about protecting an individual competitor or making all the competition alike.
So, the formula for Coke can still be a secret and Coke and Pepsi can compete in the market
along with a lot of other sweetened carbonated beverages, right?
So, that's sort of the basic answer.
Now, I was joking around with Karen this morning, and I said, one could actually look
at the opposite way and say, and I don't believe this at all, that open software is somewhat
of an antitrust violation, and in the sense that it's a lot of different people from
a lot of different places or a lot of different companies coming together to create a single
thing and product that are in put it on the market.
Now, there's a lot of reasons why it's totally fair, because a, it's free, b, it's open
for everyone to use in the way that they want to, but the basic of, and then this
is goes back to the definition of antitrust, many, many potential competitors coming together
to make a product identical in the same market that has been in itself in antitrust violation.
There are riots in Boston thinking that I do not believe it's antitrust, I'm just telling
you that if you look at everything a different way, you can argue it.
Well, but I want to take into this a little bit more, because I think one of the things
that, you know, you're aware of copyright licensing, and, you know, I guess copyright licensing
in particular is a way that we always say that companies can participate on a level playing
field, right?
Small companies, big companies, when you have copyrighted licenses that means that everyone
can contribute, and there's a fairness in it.
But how does that analysis ever, how would that come to play in an antitrust analysis?
And you're saying that that, that, that would that make the collusion argument even stronger,
and I, I can't even believe those words are coming out of my mouth, because we know
the answer is no, but go ahead a little bit.
No, no, obviously the answer is no.
So everybody is participating on equal playing field.
It's open and free for anyone to use.
So it's not, and, and I trust violation, but, and, but you could argue that if I take
that free product, well, if I start charging $100 for that product, and kind of tweak
it myself, and then someone else does the same thing, then, but everybody's using the
common foundation, you might start to have issues.
So let's go the other way, because that's a sort of a silly argument, because I don't
know that anyone would really go and make that, but let's talk about those big monopolistic
companies, those proprietary software companies, and let's look at the goodness that
has come from the free and open software communities, developing technologies that are
sometimes interoperating, sometimes disrupting, how, how much do you think that free
and open software factors into this analysis, and, you know, I guess, have you, do you
see that that conversation becoming more a part of the anti-trusted landscape, or is
that sort of something that's coming down the road?
I think it's a conversation that you all have to bring to the forefront, because it's not
sort of, I think, actively being considered by, at least, regulators in the U.S.
And I think to some extent, you know, you heard the DG-comp people say, come to us, make
comments, and I think it's the same thing in the U.S. you have to actively participate
with the regulators in order for your voice to be heard, but I just want to question
one thing that Karen said, she said, these monopolies in the tech market, and I want
to take issue with a definition of a monopoly, because what is a monopoly, a monopoly is sort
of, well, aid dominance in the market, just because you exist in a market with six competitors,
eight competitors does not make you a monopoly, even if you have, you know, billions of
dollars in revenue.
You have to have, well, it's European and U.S. standards differ on this, and the U.S. is
trying to push it down.
It always, you're a presumptive monopoly, I think, if you're over 50% of the market
in the U.S. although there's been arguments in the last few years to lower that to 30%
but nothing has been clearly established, but it's been proposed by the regulators
in the U.S. but I think what happens is people see, oh, there's a lot of revenue for
a company, therefore it must be a monopoly, which is not the case.
And even if you are a monopoly, if you have over 50% of the market, you still have to establish
under the anti-trust laws that you're doing something abusive to maintain that monopoly.
So, it means that you're doing some action that is intentionally excluding competitors
or hurting competitors to drive them out of the market.
For example, you could, as some would argue that a large online retailer does, lower your
prices so low that there are a blow cost and that would prevent other competitors from
competing with you on an equal playing field.
Putting my free software activist head-on, I mean, do you think that there's a strong
argument that using proprietary software tactics to exclude people's participation and
to lock down their devices is a form of monopolistic practice and is anti-competitive?
I may have heard this argument before by some people in the open source community.
But it is not an antitrust violation to have your own proprietary fields.
I think that this argument has been made over the last 10 years by regulators in the United
States that you can define a market, what they call single brand markets, what you can
say, well, Google is the market or Apple is the market and they're dominant in that market.
So that's sort of a lazy intellectual, as far as I'm concerned, manipulation of the antitrust
laws because it's not about a single competitor or a single product, it's always about
what does the industry look like and how are those competitors competing with each other?
So if you're looking at phones, for example, you want to know Apple, Google, and Motorola
whoever else is in the market, still competitive with each other regardless if they have
their own sort of defined sphere of influence.
It seems to me, especially listening to some of the sessions earlier, but the things that
I've heard and watched as cases have progressed over the years in Europe and the US that
Europe seems to be ahead of the United States, I think from our perspective in this community
in terms of how things have progressed, are there the laws somewhat similar?
Do you know, I mean, I don't know, it's a comparative law, a question is something you're
comfortable with, but are they similar or is Europe, is Europe ahead of the US?
So this is going to be somewhat long answers that our laws are actually written almost
identically.
If you look at Article 101 and Article 102 in the European Union and I trust a competition
laws, they're called solve the same problem that Sherman Act Section 1 in Section 2 solve.
There's not really much difference on paper.
Now what's different in force men?
There are a few seats in the front row of people who are standing.
We're really not supposed to have people standing in here before there's four seats here,
one here and two back.
And then I think fills the room.
Sorry, I had a lot of.
It's okay.
Sorry, what I was saying was that you have differences in force men.
And I think you also have a difference in the evidentiary requirements in the US and well
in particular in the tech industry, I'd add a third thing, which is the tech industry
as a whole was, I hate to say this because the Europeans are going to be mad at me.
But the became profitable in the US and grew in the US.
And as it was in still nascent, regulators did not want to interfere while it was growing.
And now what the question is at what point do you intervene?
And one could argue that the regulators in the US were late in intervening.
Why was Europe ahead of us on the intervention?
Well, maybe because, and this is an argument that is made, by many people, I'm not saying
it's my argument.
Maybe it's because all the dominant players are American.
I'm just saying controversial things.
You can hate me later.
I love it.
I think the controversial thing works.
I do have more questions to ask, but I wonder if people in the audience have specific
things that they would want to ask, just because they think it's more fun.
So I'm going to swap with you.
You're swap with me?
I'm going to swap with you.
I'm going to take this and I'll run that microphone.
Keep your hands up if you're going to just move back here because it's otherwise I've been
giving it to the front row.
So I don't know if the bundling is right legal term for that, but I wonder if practice
is like being both a marketplace and a seller on that market that we see a lot in Amazon
or the Play Store or a lot of other stores on the phone is something that is getting
the way of antitrust regulation.
And if it does, why it has not been ever acted upon.
So it has been looked at and it is a, so we call it a tie and claim bundling is called
a tie and claim in the U.S.
And it is part of the trust relations.
It has been looked at.
Amazon would be quite familiar with those allegations, question of whether it's been effectively
dealt with is a separate issue.
I'm sure you heard me grown when you said that the difference between the United States
and the United States and the opinion is sort of view to antitrust this enforcement.
I like to say that rules are absolutely nothing without enforcement.
You can have as many rules as you want, however if you choose not to enforce them, then
they're completely pointless.
My question for you is why does the United States seem not to really enforce its antitrust
rules, especially when compared to the U.S. opinion, or am I incorrect in even thinking
that's the premise of my question wrong?
So I would make two points there.
One I think is antitrust is a very blunt instrument and it's meant to protect competition.
It's not meant to solve all the other political or societal problems that may arise because
of tech or any other industry.
And I think often, and this is happening in the U.S. now as well, as Europe is, they
want to use a hammer to solve a problem that requires a screw.
And I don't think it's the right instrument for everything.
So that's part of the answer.
And you're absolutely right enforcement is everything.
I would say that historically what happens in the U.S. is how much enforcement you get
has depended on the political party in charge.
And if you look historically at the data, no judgments, just historical data.
If it's a democratic administration, there's more enforcement than in a Republican administration.
There is an interesting thing happening in the U.S. right now where HP enterprises,
HP, packet enterprises, is being sued over its merger with Juniper networks.
This just got filed last week or this week, no, this week.
I forgot we're on Saturday.
And it was interesting because if you look at the papers in the U.S. and particularly
the antitrust community, it's not something that would have been expected normally from
a Republican administration.
And we also currently have no head of antitrust in the U.S.
They haven't been appointed yet.
So it wouldn't be expected for that reason now.
So it may be, you know, no, yet we'll see how this plays out.
This may be a Republican administration that enforces antitrust more than in the past.
But it certainly wasn't expected.
It certainly wasn't expected given how friendly this administration appeared towards tech.
I'm curious, sort of, you may have answered this question already just now.
But for those of us who aren't in the antitrust space, are there any ongoing cases that
would be a particular note or particularly interesting for us to take a look at in the next
year say?
So I think this HPE case will be interesting.
There was a case filed against Apple, you know, I would say the complaint is poorly
written, but that's neither here nor there.
There's the Google cases that are going on as well.
Hi.
So you mentioned that the enforcement?
Can you just raise your hand because I don't know where you are.
Yeah.
So my question is, is the enforcement faster in the U.S.
and compared to Europe or is the Sherman Act still relevant in the age of digital market
sect and in the sense of, which is more faster.
I know that the enforcement in the U.S. is traditionally in courts, like it has to go through
the court process and proceedings and then it takes time and also read about it.
But the question is, is Sherman Act still relevant or do you see that there should be any
reforms in the Sherman Act in terms of fast tracking the process?
So I'm a true believer and I trust laws.
I think the Sherman Act is not only still relevant, it does not need to be modified in
anyway.
As I said before, one of the things is about enforcement.
It's not about actual existing law.
If you look at the TFE articles, it's almost on paper identical.
I would say that the DMA is sort of a different beast because it's part and I trust,
but it's part market regulation that has nothing to do with antitrust, tech market regulation
that has nothing to do with antitrust and this is why I say, you know, not everything
is an antitrust problem and you can create regulations that deal with the other aspects
of what you consider harm.
I don't know if the DGCOM people are still in the room.
They may hate me by now, but that's my personal opinion on that.
I would also say, and when I said there's evidentiary differences earlier and enforcement
differences, you also have to look at our processes.
I think that in Europe, the regulatory state is sort of more powerful and they're able
to do things that U.S. regulators are not and also the challenging process in the U.S.
is stronger.
So you can actually challenge the government in court on what they say is an antitrust
violation and then they have to prove it.
There's no default belief that the DOJ or the FTC or whoever's prosecuting is actually
correct.
Hi.
So I think you made it a really good point there that not everything gets solved with antitrust
regulation and I think that we're really moving into that phase right now.
I work a lot in the antitrust space and for the first time we are dealing with a very,
very complex question of, is it monopolistic when you have buying necessity as we do
with GPU production and sensitive computing, you must have the software tied directly
to the hardware, which opens up non-traditional concerns.
So as a lot of the regulation and a lot of the precedent that we have set in the space
is software exclusive, what is it going to look like when those are a combined threat?
So I'm very concerned about this issue because I think like when you start getting into
some of the security questions, the question is, is it really anti-competitive conduct,
which is what I'd say DOJ and FTC regulators alleged in the last couple of years and also
you see here in Europe as well, but you have to make a choice as to whether security is
more of a concern or the so-called competitive aspects of it or more of a concern.
This is something that comes up a lot, for example, in the payment space.
When you tap to pay, your entire transaction runs over a particular network and there's
no intervention from a competing network.
There has been a lot of complaints in Europe about sort of middlemen getting in the middle
of that transaction and being able to route it into different places.
And you'll see the same thing in a lot of secure messaging spaces.
I should never hear.
I'm not in the address space, but as a software engineer, I didn't know this is like
difference in Europe and the US and that's software patterns.
I think it's similar to open source like or proprietary.
I think you want to have at least something to incentivize to develop that that's
value and can protect them actually profit from it, so you want an incentive to develop
further.
However, you see also with the software patterns that a very junior patterns can be created
to basically create your own protection for things that should not be protected.
What do you think or it answers for that?
Or do you see a flexible nose and enter a trust as well?
So maybe rephrase the question for me because is the question really about, you know,
what is it that you can actually have as proprietary versus interoperable or is it something
else?
That was more about the software patterns.
The software patterns?
We get rid of software patterns.
Well, then how do you encourage people to create new products?
I like, that's always been my question is how do you encourage people to create because
they need to make some profit off of their creation?
I know that there's a lot of people who have given everything for free to the community
and I know that there are companies who have contributed for free, but at some point people
have to make a living.
I don't know what the answer to that question is because that's a big existential question.
We are sadly almost out of time, but I will take the last minute to say that this
is a big discussion that's been in this community and for this reason I want to really
thank a lot of for coming here because really jumping into this space where we all have
these really advanced ideas and advocacy for what we think is the right thing to do in
our software freedom community and to come in and talk about educating us about these
regulations that most of us in the community have not thought as deeply about as we have
in the software patterns space.
So everybody please thank a lot of our other fruits so much for joining us and thank
you all for your question.