Ridiculous complaint argues free software is a form of predatory pricing

[40hz]

From the "You Just Can't Make This Up" Department comes this story posted over at OSNews:

Microsoft and Nokia protest "price predation" and play at being prey.

Does no-cost software harm consumers? The FairSearch coalition thinks so, at least when it comes to Google: They say Google engages in predatory pricing when it distributes Android – a Linux-based mobile operating system – without charge. Recently, FSFE (Free Software Foundation Europe) responded in a letter to the European Commission, labeling as "wrong" and "dangerous" FairSearch’s claims, and saying further:

    The predatory pricing theory proposed by FairSearch is plainly unsuitable to describe a market where there is no price, and a product that, being Free Software, can literally be taken by anybody and "forked" ... . There is no "below cost" distribution in Free Software, because the price which market participants set ... in these circumstances is precisely zero.

Groklaw has a good write-up on FSFE’s efforts.

What is the FairSearch coalition? Its complaint against Google describes FairSearch as "an international coalition of 17 specialized search and technology companies." Those companies include Microsoft, Nokia, and Oracle, which say they have joined forces to protect competition, transparency and innovation to benefit consumers.

Google has a different take:

    FairSearch claims to represent consumers’ best interests, but it consists of companies who either compete directly with Google or don’t like where their websites appear in Google’s search results. No consumers or consumer groups are members of FairSearch.

The Verge states a similar view:

    Beneath the sheen of do-gooder ideology, FairSearch can be most charitably described as a Google watchdog. It seeks to fan the flames of disapproval where they’ve started organically, originate them where they haven’t, and generally disseminate negativity toward the Google brand. Think of it as a PR firm working to destroy rather than create goodwill.

These anti-FOSS price predation claims might bring to mind another case: Remember Daniel Wallace? He sued Red Hat, IBM, and Novell, claiming the companies conspired via the GPL to hold Linux’s price at zero. Mr. Wallace’s suit was summarily dismissed...

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Shades of recent history where certain telcos filed lawsuits to prohibit municipalities from providing their own low-cost broadband services to citizens because it would represent "unfair competition" on the part of the government - even though these same telcos declined to provide service to these communities, citing "prohibitive costs" as the reason for their refusal.

Ah Doublethink...close cousin of legalese - it's a wonderful thing!

[Stoic Joker]

If I said what I was thinking right now it would probably melt a hole in the internet.

[Vurbal]

In other news bottled water companies are suing nature for providing an effectively unlimited supply of water via rivers, lakes and streams in an attempt to put them out of business. 

[TaoPhoenix]

"...There is no "below cost" distribution in Free Software..."

Actually that leaves the door open to a *fascinating* level "below free" - *pay* people to use your software!

After all, since Lock-In is worth trillions over decades, who cares about a measly 1-time incentive fee!?

[Deozaan]

Renegade recently posted about Bastiat's The Candlemakers' Petition, which was satire. But it is very fitting:

Here's another bit of fun about the sun:

https://www.youtube.com/watch?v=T52w6dFM3T4

The text:

http://bastiat.org/en/petition.html

A snippet from it:

We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.

[Vurbal]

"...There is no "below cost" distribution in Free Software..."

Actually that leaves the door open to a *fascinating* level "below free" - *pay* people to use your software!

After all, since Lock-In is worth trillions over decades, who cares about a measly 1-time incentive fee!?

I realize you were being facetious, but it's not all that far from reality.

Developers may not typically pay users, but they certainly pay to attract users. Domain name registration isn't free and neither is hosting - usually anyway. There's certainly a payment in time and effort to setup even a modest website to say nothing of a nice one like Donation Coder. That's not including the personal cost of support or adding features just because users ask for them.

That's not to say they don't receive non-monetary payment in return. I tend to see developers in the same light as other creative people. I'm a writer and (formerly professional) musician. I need money to pay my bills but it can't compare to the emotional charge I get from other people appreciating what I'm doing. It also makes me better at my craft.

I go out of my way to tell developers when their software has that same kind of effect on me, and when I can even make a donation - sometimes for premium features I don't care about. It's not as much about financial support as the message. Your creation is so valuable to me I'm giving out of my way to give you some money.

Of course commercial developers pay companies to use their software for various reasons. I once worked for a small company that sold software to trucking companies. When we were launching a completely new product to replace the old one we found a company with an IT guy on staff who had the appropriate skills and gave them a free license along with free support for an indefinite period. In exchange we got their help field testing it and fine tuning features and ultimately had a free showcase to help attract future customers.

I guess my point is payment takes lots of forms and so does value. I'm sort of lucky to be able to pay for software by giving it some promotion, and sometimes providing much needed tutorials or documentation. Most developers aren't very good at that bit and that's fine. If you can make great software I can show people why it's so great. My monetary compensation is nothing to write home about but getting a gifted developer some much deserved attention, and maybe even putting a little money in his pocket, is something I value.

[Vurbal]

Renegade recently posted about Bastiat's The Candlemakers' Petition, which was satire. But it is very fitting:

It is very fitting, and in fact the French colonial economy (the entire system of Mercantilism really) provides some of the best analogies for our current economic mess. Mike Masnick mentioned it in a series of posts explaining exactly why free does not violate basic economics at all. The rest are linked at the bottom of that one and I highly recommend them for any developer interested in understanding how to build a user/customer base.

http://www.techdirt.com/articles/20070110/004225.shtml

Here's the relevant bit about France (from a book he was recommending actually):

The question has come up whether a guild master of the weaving industry should be allowed to try an innovation in his product. The verdict: 'If a cloth weaver intends to process a piece according to his own invention, he must not set it on the loom, but should obtain permission from the judges of the town to employ the number and length of threads that he desires, after the question has been considered by four of the oldest merchants and four of the oldest weavers of the guild.' One can imagine how many suggestions for change were tolerated.

Shortly after the matter of cloth weaving has been disposed of, the button makers guild raises a cry of outrage; the tailors are beginning to make buttons out of cloth, an unheard-of thing. The government, indignant that an innovation should threaten a settled industry, imposes a fine on the cloth-button makers. But the wardens of the button guild are not yet satisfied. They demand the right to search people's homes and wardrobes and fine and even arrest them on the streets if they are seen wearing these subversive goods.

It's also worth mentioning Donation Coder is a perfect example of the formula Mike promotes on Techdirt all the time: CWF + RTB. That means Connect With Fans and give them a Reason To Buy. The way forward in this evolving economy is extremely dependent on exactly what mouser is doing here. Experiment with ways to promote and profit from your creations. It also exemplifies some of the most important lessons more creators of all kinds need to learn.

Don't equate value with money. Giving your creations away can create a market to sell them - even the free ones - in the future.

If you think your creation is worth paying for, don't be afraid to say so. If it's good, be proud of that. If other people like it don't feel bad about asking for something in return. People who appreciate what you make want to reward you. They will appreciate it when you tell them how they can.

Don't focus on the people who aren't willing to pay. They weren't giving you money yesterday. They aren't giving you money today, and tomorrow looks like more of the same. Focus on your existing customers first and your potential customers second. They are your entire market.

But always remember, if you can't compete with free, you can't compete.

[TaoPhoenix]

I realize you were being facetious, but it's not all that far from reality.

Hmm. I was indeed being more serious than facetious, just with bits of rhetorical flair thrown in.

Given that certain ad campaigns can cost a bundle and only "influence" people, just pay them cold hard cash to use X program! I am indeed thinking of Linux and Office packages, but maybe other things as well.

[Vurbal]

I realize you were being facetious, but it's not all that far from reality.

Hmm. I was indeed being more serious than facetious, just with bits of rhetorical flair thrown in.

Given that certain ad campaigns can cost a bundle and only "influence" people, just pay them cold hard cash to use X program! I am indeed thinking of Linux and Office packages, but maybe other things as well.

Which of course is the best defense to the whole anti-competitive argument. Anybody can compete if they offer the right value. If you're a big corporate buyer you aren't just looking at the price of software. Even with commercial software almost all you're really paying for is support. You pay your IT guys, your software vendors, your hardware vendors, and whoever else you need to so the machinery keeps running smoothly.

Not all support costs money of course, but if the community dries up the software will go away and something else will take its place.