Thursday, November 23, 2006

GPL does not break competition law

Do open source licences like the GPL act as a restraint of trade and hence break competition law? The US 7th Circuit Court of Appeals thinks not (via A2k):

Intellectual property can be used without being used up; the marginal cost of an additional user is zero (costs of media and paper to one side), so once a piece of intellectual property exists the efficient price of an extra copy is zero, for that is where price equals marginal cost. Copyright and patent laws give authors a right to charge more, so that they can recover their fixed costs (and thus promote innovation), but they do not require authors to charge more. No more does antitrust law require higher prices. Linux and other open-source projects have been able to cover their fixed costs through donations of time; as long as that remains true, it would reduce efficiency and consumers’ welfare to force the authors to levy a charge on each new user…

The GPL and open-source software have nothing to fear from the antitrust laws.

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