WEBVTT

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Ready, and thanks for coming to this session of people are waving, and people I recognize.

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This is great.

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My name is Karen Sandler.

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I'm the Executive Director of the Software Freedom Conservancy.

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And as many of you know, I'm a lawyer in Basin, United States, admitted to the State of

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New York.

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And I've been working in the free software space for a long time, and I often get questions

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about US anti-trust and generally anti-trust regulations generally, but I am not an anti-trust

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lawyer.

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And I don't...

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If you want to talk to me about copyright or trademark or non-profits, I am here for

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that.

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A bunch of other things.

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And so, after thinking about what kind of material I wanted most in this room, from all

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of the questions that come up again and again and again, and some of the material that came

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up earlier in this room as well.

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And so, I've asked an anti-trust expert to join us for this FOSDM, and I'm so pleased

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to introduce a lot of rather-fird who, if we give her a call, who has worked for some

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of the major companies who you may have heard of, but we won't list them now.

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They may be some of the monopolies that are supposedly being broken by the DMI.

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And so, I just thought we would come and ask some questions so that we could further

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just educate ourselves about this issue.

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And I think one of the first questions I was asking around what people wanted to know is

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anti-trust isn't just a good thing.

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Why do you want to anti-trust?

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So, and a trust as a concept started, well, I'm going to go back to the origin and the

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1880s what people would do very wealthy people would do is they'd buy shares in trust,

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you know, as I think of like a family trust, except it was a trust across an industry.

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So, standard oil is probably the most famous one from back then, which was it would

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be several companies that were all in the same industry and you would buy shares in

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that company.

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So, what happens when there's sort of a overall trust that is running all the companies

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in a particular industry, they all start to look alike.

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They set the prices alike, they conspire on policy, they conspire on hiring all of those

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things.

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And so, in 1890, the Sherman Act was created to essentially break up these trusts and have

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a free and fair industry, so that's how you get anti-trust.

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So, I'm just going to ask the big question that's all on our minds.

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Now, could it be possible that proprietary software could be okay, right, right, I mean,

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we know proprietary software is not okay, but for when you look at it from a competitive

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standpoint, proprietary software is by definition exclusionary, so what gives a lot of,

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why aren't all the proprietary software companies being just busted up?

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So, I'm going to give my answer and then I'm going to say something a little bit controversial.

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So, I just practice it with that.

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One is that, and I'm just talking about protecting a market in industry.

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It's not about protecting an individual competitor or making all the competition alike.

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So, the formula for Coke can still be a secret and Coke and Pepsi can compete in the market

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along with a lot of other sweetened carbonated beverages, right?

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So, that's sort of the basic answer.

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Now, I was joking around with Karen this morning, and I said, one could actually look

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at the opposite way and say, and I don't believe this at all, that open software is somewhat

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of an antitrust violation, and in the sense that it's a lot of different people from

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a lot of different places or a lot of different companies coming together to create a single

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thing and product that are in put it on the market.

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Now, there's a lot of reasons why it's totally fair, because a, it's free, b, it's open

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for everyone to use in the way that they want to, but the basic of, and then this

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is goes back to the definition of antitrust, many, many potential competitors coming together

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to make a product identical in the same market that has been in itself in antitrust violation.

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There are riots in Boston thinking that I do not believe it's antitrust, I'm just telling

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you that if you look at everything a different way, you can argue it.

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Well, but I want to take into this a little bit more, because I think one of the things

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that, you know, you're aware of copyright licensing, and, you know, I guess copyright licensing

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in particular is a way that we always say that companies can participate on a level playing

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field, right?

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Small companies, big companies, when you have copyrighted licenses that means that everyone

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can contribute, and there's a fairness in it.

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But how does that analysis ever, how would that come to play in an antitrust analysis?

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And you're saying that that, that, that would that make the collusion argument even stronger,

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and I, I can't even believe those words are coming out of my mouth, because we know

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the answer is no, but go ahead a little bit.

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No, no, obviously the answer is no.

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So everybody is participating on equal playing field.

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It's open and free for anyone to use.

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So it's not, and, and I trust violation, but, and, but you could argue that if I take

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that free product, well, if I start charging $100 for that product, and kind of tweak

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it myself, and then someone else does the same thing, then, but everybody's using the

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common foundation, you might start to have issues.

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So let's go the other way, because that's a sort of a silly argument, because I don't

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know that anyone would really go and make that, but let's talk about those big monopolistic

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companies, those proprietary software companies, and let's look at the goodness that

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has come from the free and open software communities, developing technologies that are

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sometimes interoperating, sometimes disrupting, how, how much do you think that free

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and open software factors into this analysis, and, you know, I guess, have you, do you

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see that that conversation becoming more a part of the anti-trusted landscape, or is

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that sort of something that's coming down the road?

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I think it's a conversation that you all have to bring to the forefront, because it's not

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sort of, I think, actively being considered by, at least, regulators in the U.S.

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And I think to some extent, you know, you heard the DG-comp people say, come to us, make

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comments, and I think it's the same thing in the U.S. you have to actively participate

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with the regulators in order for your voice to be heard, but I just want to question

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one thing that Karen said, she said, these monopolies in the tech market, and I want

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to take issue with a definition of a monopoly, because what is a monopoly, a monopoly is sort

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of, well, aid dominance in the market, just because you exist in a market with six competitors,

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eight competitors does not make you a monopoly, even if you have, you know, billions of

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dollars in revenue.

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You have to have, well, it's European and U.S. standards differ on this, and the U.S. is

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trying to push it down.

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It always, you're a presumptive monopoly, I think, if you're over 50% of the market

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in the U.S. although there's been arguments in the last few years to lower that to 30%

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but nothing has been clearly established, but it's been proposed by the regulators

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in the U.S. but I think what happens is people see, oh, there's a lot of revenue for

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a company, therefore it must be a monopoly, which is not the case.

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And even if you are a monopoly, if you have over 50% of the market, you still have to establish

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under the anti-trust laws that you're doing something abusive to maintain that monopoly.

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So, it means that you're doing some action that is intentionally excluding competitors

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or hurting competitors to drive them out of the market.

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For example, you could, as some would argue that a large online retailer does, lower your

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prices so low that there are a blow cost and that would prevent other competitors from

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competing with you on an equal playing field.

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Putting my free software activist head-on, I mean, do you think that there's a strong

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argument that using proprietary software tactics to exclude people's participation and

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to lock down their devices is a form of monopolistic practice and is anti-competitive?

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I may have heard this argument before by some people in the open source community.

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But it is not an antitrust violation to have your own proprietary fields.

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I think that this argument has been made over the last 10 years by regulators in the United

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States that you can define a market, what they call single brand markets, what you can

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say, well, Google is the market or Apple is the market and they're dominant in that market.

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So that's sort of a lazy intellectual, as far as I'm concerned, manipulation of the antitrust

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laws because it's not about a single competitor or a single product, it's always about

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what does the industry look like and how are those competitors competing with each other?

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So if you're looking at phones, for example, you want to know Apple, Google, and Motorola

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whoever else is in the market, still competitive with each other regardless if they have

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their own sort of defined sphere of influence.

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It seems to me, especially listening to some of the sessions earlier, but the things that

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I've heard and watched as cases have progressed over the years in Europe and the US that

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Europe seems to be ahead of the United States, I think from our perspective in this community

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in terms of how things have progressed, are there the laws somewhat similar?

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Do you know, I mean, I don't know, it's a comparative law, a question is something you're

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comfortable with, but are they similar or is Europe, is Europe ahead of the US?

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So this is going to be somewhat long answers that our laws are actually written almost

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identically.

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If you look at Article 101 and Article 102 in the European Union and I trust a competition

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laws, they're called solve the same problem that Sherman Act Section 1 in Section 2 solve.

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There's not really much difference on paper.

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Now what's different in force men?

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There are a few seats in the front row of people who are standing.

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We're really not supposed to have people standing in here before there's four seats here,

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one here and two back.

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And then I think fills the room.

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Sorry, I had a lot of.

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It's okay.

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Sorry, what I was saying was that you have differences in force men.

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And I think you also have a difference in the evidentiary requirements in the US and well

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in particular in the tech industry, I'd add a third thing, which is the tech industry

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as a whole was, I hate to say this because the Europeans are going to be mad at me.

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But the became profitable in the US and grew in the US.

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And as it was in still nascent, regulators did not want to interfere while it was growing.

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And now what the question is at what point do you intervene?

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And one could argue that the regulators in the US were late in intervening.

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Why was Europe ahead of us on the intervention?

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Well, maybe because, and this is an argument that is made, by many people, I'm not saying

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it's my argument.

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Maybe it's because all the dominant players are American.

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I'm just saying controversial things.

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You can hate me later.

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I love it.

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I think the controversial thing works.

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I do have more questions to ask, but I wonder if people in the audience have specific

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things that they would want to ask, just because they think it's more fun.

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So I'm going to swap with you.

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You're swap with me?

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I'm going to swap with you.

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I'm going to take this and I'll run that microphone.

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Keep your hands up if you're going to just move back here because it's otherwise I've been

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giving it to the front row.

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So I don't know if the bundling is right legal term for that, but I wonder if practice

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is like being both a marketplace and a seller on that market that we see a lot in Amazon

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or the Play Store or a lot of other stores on the phone is something that is getting

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the way of antitrust regulation.

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And if it does, why it has not been ever acted upon.

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So it has been looked at and it is a, so we call it a tie and claim bundling is called

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a tie and claim in the U.S.

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And it is part of the trust relations.

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It has been looked at.

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Amazon would be quite familiar with those allegations, question of whether it's been effectively

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dealt with is a separate issue.

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I'm sure you heard me grown when you said that the difference between the United States

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and the United States and the opinion is sort of view to antitrust this enforcement.

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I like to say that rules are absolutely nothing without enforcement.

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You can have as many rules as you want, however if you choose not to enforce them, then

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they're completely pointless.

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My question for you is why does the United States seem not to really enforce its antitrust

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rules, especially when compared to the U.S. opinion, or am I incorrect in even thinking

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that's the premise of my question wrong?

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So I would make two points there.

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One I think is antitrust is a very blunt instrument and it's meant to protect competition.

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It's not meant to solve all the other political or societal problems that may arise because

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of tech or any other industry.

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And I think often, and this is happening in the U.S. now as well, as Europe is, they

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want to use a hammer to solve a problem that requires a screw.

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And I don't think it's the right instrument for everything.

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So that's part of the answer.

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And you're absolutely right enforcement is everything.

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I would say that historically what happens in the U.S. is how much enforcement you get

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has depended on the political party in charge.

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And if you look historically at the data, no judgments, just historical data.

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If it's a democratic administration, there's more enforcement than in a Republican administration.

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There is an interesting thing happening in the U.S. right now where HP enterprises,

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HP, packet enterprises, is being sued over its merger with Juniper networks.

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This just got filed last week or this week, no, this week.

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I forgot we're on Saturday.

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And it was interesting because if you look at the papers in the U.S. and particularly

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the antitrust community, it's not something that would have been expected normally from

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a Republican administration.

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And we also currently have no head of antitrust in the U.S.

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They haven't been appointed yet.

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So it wouldn't be expected for that reason now.

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So it may be, you know, no, yet we'll see how this plays out.

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This may be a Republican administration that enforces antitrust more than in the past.

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But it certainly wasn't expected.

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It certainly wasn't expected given how friendly this administration appeared towards tech.

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I'm curious, sort of, you may have answered this question already just now.

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But for those of us who aren't in the antitrust space, are there any ongoing cases that

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would be a particular note or particularly interesting for us to take a look at in the next

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year say?

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So I think this HPE case will be interesting.

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There was a case filed against Apple, you know, I would say the complaint is poorly

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written, but that's neither here nor there.

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There's the Google cases that are going on as well.

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Hi.

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So you mentioned that the enforcement?

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Can you just raise your hand because I don't know where you are.

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Yeah.

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So my question is, is the enforcement faster in the U.S.

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and compared to Europe or is the Sherman Act still relevant in the age of digital market

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sect and in the sense of, which is more faster.

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I know that the enforcement in the U.S. is traditionally in courts, like it has to go through

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the court process and proceedings and then it takes time and also read about it.

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But the question is, is Sherman Act still relevant or do you see that there should be any

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reforms in the Sherman Act in terms of fast tracking the process?

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So I'm a true believer and I trust laws.

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I think the Sherman Act is not only still relevant, it does not need to be modified in

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anyway.

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As I said before, one of the things is about enforcement.

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It's not about actual existing law.

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If you look at the TFE articles, it's almost on paper identical.

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I would say that the DMA is sort of a different beast because it's part and I trust,

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but it's part market regulation that has nothing to do with antitrust, tech market regulation

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that has nothing to do with antitrust and this is why I say, you know, not everything

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is an antitrust problem and you can create regulations that deal with the other aspects

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of what you consider harm.

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I don't know if the DGCOM people are still in the room.

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They may hate me by now, but that's my personal opinion on that.

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I would also say, and when I said there's evidentiary differences earlier and enforcement

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differences, you also have to look at our processes.

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I think that in Europe, the regulatory state is sort of more powerful and they're able

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to do things that U.S. regulators are not and also the challenging process in the U.S.

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is stronger.

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So you can actually challenge the government in court on what they say is an antitrust

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violation and then they have to prove it.

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There's no default belief that the DOJ or the FTC or whoever's prosecuting is actually

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correct.

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Hi.

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So I think you made it a really good point there that not everything gets solved with antitrust

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regulation and I think that we're really moving into that phase right now.

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I work a lot in the antitrust space and for the first time we are dealing with a very,

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very complex question of, is it monopolistic when you have buying necessity as we do

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with GPU production and sensitive computing, you must have the software tied directly

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to the hardware, which opens up non-traditional concerns.

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So as a lot of the regulation and a lot of the precedent that we have set in the space

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is software exclusive, what is it going to look like when those are a combined threat?

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So I'm very concerned about this issue because I think like when you start getting into

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some of the security questions, the question is, is it really anti-competitive conduct,

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which is what I'd say DOJ and FTC regulators alleged in the last couple of years and also

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you see here in Europe as well, but you have to make a choice as to whether security is

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more of a concern or the so-called competitive aspects of it or more of a concern.

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This is something that comes up a lot, for example, in the payment space.

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When you tap to pay, your entire transaction runs over a particular network and there's

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no intervention from a competing network.

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There has been a lot of complaints in Europe about sort of middlemen getting in the middle

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of that transaction and being able to route it into different places.

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And you'll see the same thing in a lot of secure messaging spaces.

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I should never hear.

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I'm not in the address space, but as a software engineer, I didn't know this is like

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difference in Europe and the US and that's software patterns.

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I think it's similar to open source like or proprietary.

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I think you want to have at least something to incentivize to develop that that's

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value and can protect them actually profit from it, so you want an incentive to develop

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further.

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However, you see also with the software patterns that a very junior patterns can be created

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to basically create your own protection for things that should not be protected.

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What do you think or it answers for that?

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Or do you see a flexible nose and enter a trust as well?

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So maybe rephrase the question for me because is the question really about, you know,

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what is it that you can actually have as proprietary versus interoperable or is it something

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else?

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That was more about the software patterns.

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The software patterns?

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We get rid of software patterns.

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Well, then how do you encourage people to create new products?

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I like, that's always been my question is how do you encourage people to create because

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they need to make some profit off of their creation?

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I know that there's a lot of people who have given everything for free to the community

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and I know that there are companies who have contributed for free, but at some point people

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have to make a living.

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I don't know what the answer to that question is because that's a big existential question.

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We are sadly almost out of time, but I will take the last minute to say that this

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is a big discussion that's been in this community and for this reason I want to really

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thank a lot of for coming here because really jumping into this space where we all have

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these really advanced ideas and advocacy for what we think is the right thing to do in

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our software freedom community and to come in and talk about educating us about these

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regulations that most of us in the community have not thought as deeply about as we have

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in the software patterns space.

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So everybody please thank a lot of our other fruits so much for joining us and thank

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you all for your question.

