1. European Open source & free software Law Event
5e édition: “FOSS: Standing on the shoulders of law”
12th of October 2012
FOSS and competition law
From an European perspective
Benjamin Jean
bjean@inno3.fr
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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2. Agenda
We'll try to briefly explain:
1) Why this topic is an important one ?
2) How does Competition Law work ? (from an European
perspective)
3) What decisions do we already have / useful concerning FOSS
and Competition Law issues
4) What does it change to our practices
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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3. Why this topic is important ?
First, I'm an IP lawyer, so competition issues are not in my « core » field (even if we can't
think about IP without thinking about regulation & competition).
BTW, this topic appears to be important, from a legal/economical perspective, concerning
FOSS :
– Because competition law can (must) help to reduce IPRs abuses (and these ones
are dangerous for FOSS projects) ;
– Because competition law concerns interoperability issues ;
– Because FOSS editors are merged/acquired by proprietary software editors ;
– Because competition law might be used against FOSS (by its opponents) ;
– Because competition issues are a major concern for (public) actors/users which
would like to adopt and promote FOSS.
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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4. Interfacing IP Rights and Competition
Conflicting interests
– IP are Monopoly/quasi-monopoly rights
– Increasing market domination corresponds to a decreasing intensity
of competition...
Competition law is a very important norm, based on the Treaty on the
functioning of the European Union. Mainly:
– Article 101 (ex-article 81 TCE) regulates joint conduct (e.g. Cartels)
– Article 102 (ex-article 82 TCE) regulates abuses of dominant
position
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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5. CJCE 8 juin 1971 Deutsche Grammophon
Competition Law controls the exercise of exclusive right when it unduly increases
exclusivity in agreements between undertakings or leads to abuse of a dominant position
Deutsche Grammophon, 1974 E.C.R. 1147
– “it is clear from Article 36 [now 30] that, although the Treaty does not affect the
existence of rights recognized by the legislation of a member state with regard to
industrial and commercial property, the exercise of such rights may nevertheless
fall within the prohibitions laid down by the Treaty”
• A supposer qu’un droit voisin du droit d’auteur puisse être concerné par ces dispositions
(articles 36, 85 et 86), il ressort de cet article que, si le traité n’affecte pas l’existence
des droits reconnus par la législation d’un État membre en matière de propriété
industrielle et commerciale, l’exercice de ces droits peut cependant relever des
interdictions édictées par le traité.
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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6. What could be the impact of using free license(s)
Abuse : Need to be conform to essential facilities concept : not allowed if this use
– prevents the emergence of a new product
– For which there is a potential demand of the consumers
– Refusal is unjustified by objective reasons
• Oscar Bronner CJCE, 26 nov. 1998, aff. C-7/97, Oscar Bronner : Rec., I-7791. And CJCE 1995 Magill ; CJCE 2004 IMS-Heatlth.
Cartel
– associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or
effect the prevention, restriction or distortion of competition within the common market
Inapplicable in certain situations which contributes to improving the production or distribution of goods or to promoting technical or
economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
• (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
• (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
– The crucial Battle
The crucial battle is not between individual firms but between networks of firms.
Innovations and operations have become a collective activity
The keystone Advantage : What the New Dynamics of Business Ecosystems means for strategy, innovation and sustainability, M. lansiti & R. Levien,
Harvard Business School Press, 2004
From Intellectual property to intellectual partnering (Chesbrough, 2006)
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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7. Competition issues
– The CJCE/CJUE made a lots of decisions (emergence of (F)RAND (Faire Reasonable And Non-Discriminatory)
licenses)
So we can interface IPRs and Competition Law to ensure a « faire use » of IPRs (competition must be preserved)
European Interoperability Framework (EIF) for European public services (5.2.1 Specifications, openness and
reuse)introduced « best efforts » - 16.12.2010
« If the openness principle is applied in full:
• All stakeholders have the same possibility of contributing to the development of the specification and public review is part
of the decision-making process;
• The specification is available for everybody to study;
• Intellectual property rights related to the specification are licensed on FRAND terms or on a royalty-free basis in a way that
allows implementation in both proprietary and open source software.
However, public administrations may decide to use less open specifications, if open specifications do not exist or
do not meet functional interoperability needs »
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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8. So we have (F)RAND : FOSS & RAND
– Competition Law limits IPRs use with the (F)RAND concept concerning
interoperability/specifications issues:
• From one hand : FOSS licenses are (very broad) (F)RAND licenses
– Is it really the case, regarding proprietary editors interested by this license ?
• From the other hand : FOSS and (F)RAND are really difficult to combine
– Discussion about a RF ("Royalty Free" – Simon Phipps say "Restriction Free") licence
– This solution (post regulation) isn't acceptable as is for FOSS: « in a way that allows
implementation in both proprietary and open source software. »
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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9. Interfacing FOSS licenses and Competition
Questions related to FOSS licenses :
– What about “Open use” of IP rights?
• How does FOSS (and copyleft) impact the market?
• Does “Open use” of IP rights may constitute cartel or abuse ?
– Can administration choose FOSS models? Are FOSS licenses good choice from a
competition law perspective (including for OpenData strategies).
• See rapport Samuelson-Glushko, Analysis of share-alike obligations in municipal open data
licenses, Canadian Internet Policy and Public Interest Clinic, University of Ottawa, 2011.
Question related to collaboration around FOSS. Collaboration might be :
– Organized (mainly Open Source licences use) => certainly no issue
– Negociated (cross-licenses/cocreation/joint venture, etc.)
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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10. Genivi Alliance : Eclipse :
– Established in 2009, the GENIVI Alliance is a non-profit industry
– Eclipse is a community for individuals and organizations who
organisation which currently boasts over 165 members from a
wish to collaborate on commercially-friendly open source
variety of industries including automotive OEMs and Tier One
suppliers. software. Its projects are focused on building an open
development platform comprised of extensible
Babylone :
frameworks, tools and runtimes for building, deploying
– Le projet BABYLONE a pour objectif de défricher le cadre de and managing software across the lifecycle.
développement de briques technologiques certifiables open
sources pour la filière des systèmes critiques. – Eclipse Industry Working Group Process (2009) : Eclipse IWGs
are established to facilitate the collaboration between
Eclipse Foundation Members. The collaboration should be
Open Handset Alliance intended to focus, promote and augment Eclipse
– The Open Handset Alliance™ is a group of mobile and technology technologies to meet the needs of specific industries.
leaders who share this vision for changing the mobile experience
Linux Foundation
for consumers. (avec quelques projets parallèles tels l'Android
Update Alliance)
– The Linux Foundation is the nonprofit consortium dedicated to
Open Invention Network® fostering the growth of Linux.
– is an intellectual property company that was formed to promote
– Automotive Grade Linux Workgroup : The Workgroup will
Linux by using patents to create a collaborative environment. It
facilitate widespread industry collaboration that
promotes a positive, fertile ecosystem for Linux, which in turns
drives innovation and choice in the global marketplace. This
advances automotive device development, providing a
helps ensure the continuation of innovation that has benefited community reference platform that companies can use
software vendors, customers, emerging markets and investors. for creating products.
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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11. FOSS and « open use of IP » foster innovation
Because
– IPRs are mainly use to create new innovations (not to block any competitor)
• Including between big societies and PMEs
– Because it “decrease” monopole and help other people to create &
innovation
So :
– In its “pure form”, FOSS is good for competition
– There are certainly some uses of FOSS licenses which are not compatible
with competition law
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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12. Pour une concurrence saine
USA
– Wallace v. International Business Machines Corp. et al. En 2006 (Court of Appeals for the Seventh Circuit) :
26. « The GPL encourages, rather than discourages, free competition and the distribution of computer operating systems, the benefits of which
directly pass to consumers. These benefits include lower prices, better access and more innovation. »
– Wallace does not contend that software available for free under the GPL will lead to monopoly prices in the future. How could it, when the GPL
keeps price low forever and precludes the reduction of output that is essential to monopoly? “[I]f a manufacturer cannot make itself better
off by injuring consumers through lower output and higher prices, there is no role for antitrust law to play.” Schor, 457 F.3d at 612.
– The GPL and open-source software have nothing to fear from the antitrust laws.
Italy
– En 2009, le Conseil régional italien du Piémont a adopté une loi disposant que. Italian Constitutional Court, decision 23 mars 2010
• "The choice is not an exclusive one, but just preferential and requires a comparative evaluation, as is confirmed by the reference to the
possibility to use proprietary formats [...] under the condition that in such case the Region shall provide motives of its choice [...].
• Finally, it must be once more reminded that the concepts of free software[14] and software with inspectable code are not notions
concerning a given technology, brand or product, instead they express a legal characteristic. At the end of the day, what discriminates
between free and proprietary software is the different legal arrangement of interest (licence) upon which the right of using the program
is based; and the choice concerning the adoption of one or the other contractual regime belongs to the will of the user.
• It follows that the damage to competition feared by the counsel of the State with regard to the law in question, is not envisaged. "
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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13. Spain:
– CENATIC, Spanish National Reference Center for the
Application of Information Technology and
Communication based on Open Source,
« les administrations publiques qui développent et
partagent leur logiciel ne doivent pas être perçues
comme des pratiques anticoncurrentielles, mais prises
comme une opportunité pour les sociétés privées de
construire et d’étendre leur offre de services. »
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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14. Conseil d’État. Décision (numéro 350431) du 30 septembre 2011 :
« Considérant, en second lieu, qu'eu égard à la nature de marché de services, et non de fournitures, du marché litigieux, les
sociétés [...] ne sauraient utilement soutenir que la mention de la solution logicielle […] a eu pour effet de favoriser ou d'éliminer
d'autres solutions logicielles ; qu'il résulte en outre de l'instruction que la mention du logiciel [...], en raison du caractère de
logiciel libre que celui-ci présente et qui le rend librement et gratuitement modifiable et adaptable aux besoins de la
collectivité par toute entreprise spécialisée dans l'installation de logiciels supports d'espaces numériques de travail,
ne peut être regardée ni comme ayant pour effet de favoriser la société […] qui a participé à sa conception et en est
copropriétaire ni comme ayant pour effet d'éliminer des entreprises telles que les sociétés requérantes qui, tout en ayant entrepris
de développer leurs propres solutions logicielles, sont spécialisées dans l'installation d'espaces numériques de travail à destination
des établissements d'enseignement et disposent des compétences requises pour adapter le logiciel libre […] aux besoins de la
REGION PICARDIE ; que, par suite, les sociétés […] ne sont pas fondées à soutenir qu'en mentionnant comme spécification
technique du marché le recours à ce seul logiciel libre, la REGION PICARDIE a méconnu les dispositions du IV de l'article 6 du code
des marchés publics ; que, dès lors, les sociétés […] ne sont pas fondées à demander l'annulation de la procédure de passation
litigieuse ; »
Remarks:
Other factors import :
– Readability & access of Source Code for everyone ;
– Periodicity of publication (is it up to date ?) ;
– business models (does a companie maintain any advantage ?)
– project governance (who can participate?)3
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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15. New French « Ayrault circulaire » (19th of september) in favor of
Free Software
Prepared by the Disic (Direction Interministrérielle des systèmes
d’information et de communication) on « use of free software
in the Administration »
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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16. Conclusion
We need to be good on this aspect – from a macroeconomic point of view
– There is no reason to think FOSS (and/or copyleft) would be bad for Competition
– Instead, FOSS is good for Competition, even if some practices might be deviant (independently of FOSS).
There is a resilience of the traditional/proprietary world:
– The society is changing, FOSS opponents are using old arguments against FOSS if it impacts significantly their Business
model
– “change or die” situation
More important,
– administration can, and have to, be proactive:
• To ask for FOSS (cd procurement topic)
• to promote FOSS
• to edit its own software
• Broadly, to diffuse its own IPRs (including database/OpenData) in a copyleft (and/or defensive) way
– Creation of an IPRs Pool
– Regulation by its IPRs
– Broadly, most of clients should opt for FOSS if there is any common needs or, on the contrary, there is a particular need
to have more control the software/source code.
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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17. Bibliographie
– Henry W. Chesbrough, Open Business Models: How To Thrive In The New Innovation
Landscape, 1ère éd., Harvard Business School Press, 2006.
– Benjamin Jean, Option libre. Du bon usage des licences libres, Framasoft, 2011
– Le guide Open Source : réflexions sur la construction et le pilotage d'un projet Open
Source (coll. Syntec Numérique), 2009 http://guideopensource.info
– Pamela Samuelson† and Suzanne Scotchmer, The Law and Economics of Reverse
Engineering, APRIL 10, 2002 4/10/02 9:02 PM
– S.Sheppard , Balancing free with IP: potential competition law issues for open source
software, Kemp Little LLP, http://www.practicallaw.com/7-501-5390s
– Sylvain Steer, Links between Free software and competition (law), CERDI Summer
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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18. Merci
bjean@inno3.fr
« FOSS and competition law », EOLE 2012, © 2012 Benjamin Jean, sous triple licence CC-By-SA 3.0, GNU GFL 1.3 et LAL 1.3
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