The Microsoft/SCO Connection

rocketjam writes "CNET is running a long question-and-answer format article which takes an in-depth look at the relationship between Microsoft and SCO and the financial support SCO has received both directly and indirectly from Microsoft in their ongoing litigation alleging that Linux violates the intellectual property rights they claim to hold on UNIX. The article details the money Microsoft has paid to SCO to "license" UNIX as well as the role they played in BayStar's $50 million investment in SCO in late 2003. Microsoft paid SCO $16.6 million for a UNIX license. The only other company that has come close to paying SCO that much money for a license is Sun, who paid $9.3 million to license UNIX for their Solaris operating system."

Comments

Not even close...

[Kjuib]

I paid $26.4 Million for my Unix License... Now I feel like I got ripped off. Do you think I can ask for a refund?

An image comes to mind. . .

[Limburgher]

I see an automatic pistol holding a lit cigarette. . .

words of wisdom

[downward dog]

The enemy of my enemy is my friend.

He who can destroy a thing, can control a thing.

He who controls the spice... Oh, wait.

Re:words of wisdom

[puppetluva]

The enemy of my enemy is my friend

This is a horrible fallacy. . .just look at US foreign policy failures over the last 50 years to understand in depth why these are NOT words of wisdom.

He who can destroy a thing, can control a thing.

This is also not often true... unless you define control as "determining how limited or non-functional something becomes". A few examples:
1) Computer Software
2) Love
3) the environment

|)
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Re:Antitrust

[Tackhead]

> That's not the case, it's more like a competitor trying to get the little company to step up to the behemoth. Looking at how this is setup, I'm confused... How is this NOT an anti-trust violation?

MSFT and SUNW have plausible deniability in that they can claim the payments were for SCOX licenses.

As deniability goes, it's not very plausible, but as far as the law is concerned, it doesn't have to be. As long as the words on the paper are there, you don't even have to keep a straight face while reading them.

Re:What if

[Anonymous Coward]

I hope you all at least consider that MSFT paid 16.6 million for the SCO Unix license, just to avoid lawsuits from them, with no "evil plans" againstLinux whatsoever.

Yeah, we considered it. Then we laughed so hard we thought our pants would never dry.

No Conspiracies Here

[Doesn't_Comment_Code]

It's pretty obvious that Microsoft doesn't like Linux. Linux is giving away what Microsoft sells. Microsoft sees an opportunity to help an enemy of an enemy ... and acts on it.

I don't see any sneaky or suspicious stuff going on here. I think Microsofts actions are underhanded and not above-the-board. But I don't think there are any smoke and mirrors/conspiracies to be uncovered.

Re:No Conspiracies Here

[Kismet]

Ok, I remember when the first rumors were floated that MS was behind the BayStar deal. Someone leaked a memo and it got into ESR's hands.

Do you remember what the FOSS people were saying then? This is huge, they said. If this is substantiated, then MS is in major trouble, they said. People were skeptical because it was such a big deal. It was hard to believe. It was a bigger deal than MS v. Netscape - remember, the one that nearly saw MS broken up by the government?

Was it ever substantiated? You bet. But no one seems concerned anymore.

What? The convicted monopolist puts "licensing" money into SCO's hands for a product that it will never need. Shady, but legal. Now, the same convicted monopolist has been shown to have quietly and indirectly supported SCO's bogus anti-Linux litigation using funds from an organization that has major ties to MS.

How is that not a conspiracy? How is it, when "Microsoft sees an opportunity to help an enemy of an enemy ... and acts on it;" how is that not a conspiracy? Isn't that the textbook definition of conspiracy? Just because everyone knows about it doesn't mean it isn't a conspiracy.

What I understand is that a convicted monopolist is still doing "business as usual," and nobody has called to re-convene the court. Why?

It's not illegal to have a monopoly. It is illegal to maintain the monopoly by conspiracy. Microsoft has done this.

Simpsons reference

[Man in Spandex]

Homer: In America, first you get the sugar, then you get the power, then you get the women

I find this quote interesting

[jd]

Without naming names, Goldfarb explained that BayStar received a call from a "senior" Microsoft employee, but not Chairman Bill Gates or Chief Executive Steve Ballmer. "When they started telling me what it was, I wasn't shocked (that) this was something they'd like to see prevail."

It seems Microsoft did more than just act as a reference. It's not stated what was actually said, but for it to be "shocking" in an environment where competition is normally aggressive to hostile, we can assume that it was something highly out of the ordinary and probably very unethical.

Although Microsoft seems to have been careful to not be "too" active in this lawsuit, it seems evident that they are far from innocent bystanders. If the SEC could find some guts, they really aught to be investigating this matter. If the objective is to intimidate potential Linux customers, or drain pro-Linux corporations of cash, provided the lawsuit really is without merit, and SCO & Microsoft knew this then I feel sure that there are provisions under racketeeing laws (esp. with regards to "protection rackets") that cover this situation.

This, I think, is the point that the law enforcement agencies and SEC need to remember. (This is why John Mohammed could be found guilty for murders commited by Lee Malvo. The so-called "trigger-man" hypothesis. It doesn't matter if you feel this is right or wrong, what matters is that this is the viewpoint the law in the US currently takes.)

If SCO is shown to be guilty of trying to extort money through the willful pursuit of lawsuits they knew to be without merit, then the Federal authorities have the legal right (and legal obligation) to take SCO out of business. You can't go around saying that racketeering is bad - unless it's by someone in Silicon Valley and/or a contributor to Government political funds.

If, as I think increasingly likely, Microsoft is shown to have (from the background) put SCO in a position where SCO was going to shoot, then the "triger-man" hypothesis applies, which means Microsoft would also be guilty, even if their role was totally passive. It would be no different, in the eyes of the law, than the DC shootings, insofar as distribution of responsibility was concerned.

If there's even the slightest suspicion of such a scenario, the FBI and the SEC should be all over this case, to determine who knew what, when, and how culpable that makes them.

Of course, that's not happening. The SEC can't even be pressured into enforcing the whistleblower protection laws, in relatively minor cases.

The ability of the SEC to stand back and ignore numerous laws, across the board, in spite of pressure from law enforcement, does not bode well. It does not bode well for industry, where upper management are now essentially being told they are at liberty to ignore any rules or laws they feel like. Good working practices produce good work, in good quantities. Poor working practices make things profitable in the short-term but kill the business in the long-run.

It does not bode well for law enforcement, where we can expect those pushing for enforcement to be replaced by "pro-business" opportunists.

It definitely does not bode well for Linux and *BSD. The outcome of this trial is almost irrelevent, as all Microsoft has to do is "lean" on someone else to start a new one. From Microsoft's standpoint, it makes more in a day from interest earned than it spends on propping up such lawsuits, and even if the lawsuit fails, it pretty much kills off whoever they used (and therefore a competitor). Microsoft might even pick up a little IP on the way. Linux and *BSD have to be "lucky" in every lawsuit thrown at them. Microsoft only has to be lucky once.

Re:Eliminate UNIX, More WinServer Sales

[user32.ExitWindowsEx]

No. Windows NT is a very well-designed kernel. If anything, Microsoft should rip the crap they poured all over Cutler's kernel off of it and put a UNIX userland in...that would be more secure.

So you want to sue us?

[number6x]

MS: So, Caldera, you say you want to sue us for using your "Unix(tm) IP" in our Windows(r) Services for Unix(r)(tm) Product?

Caldera: Yeah, and we're suing other big bullies too.

MS: What if we give you $6.66 Million dollars for an "intellectual property license", Will that make the law suit go away?

Caldera: Oh yeah! Now you're talking my language.

MS: You say you want to sue other big guys too? If we give you $10 Million more, could you make it IBM and drag Linux in with them?

Caldera: Sure thing boss, where do I sign?

MS: Don't call me that. Sign here, initial here, here and here.
Yes, in blood please.

They Did consider it

[PWT-Development]

At least one vendor (IBM) looked around at what SCO was claiming, said "you have to be kidding" and realized that if they let SCO get away with their little extortion scheme(let's call it what it is -- i am going to sue you so that you buy my company isnt exactly a business plan) then there will be a lineup of equally baseless lawsuits.

While it is certainly true that IBM has the financial resources to cut a cheque to make SCO go away it will only encourage other bottom-feeders to line up at the trough(sorry for the mixed metaphor) and that would make for a constant distraction.

Even a company the size of IBM can be impaired by a barrage of deposition requests, email hunts, paperwork diving expeditions, etc.

Don't think that IBM defended the lawsuit because of some political stance in favour of Open Source. They defended the lawsuit for pure practical purposes. They saw that the long term costs of the lawsuit went far beyond the $100,000,000 (for sake of argument) that it would have taken to make SCO go away

Re:Eliminate UNIX, More WinServer Sales

[discordja]

Take a Linux distribution (or BSD, or Darwin, or whatever), place a Windows GUI on it, port their apps so that anyone can buy Office (profit!), inherit stronger security from the UNIX model, and add classic Windows support with their Virtual PC/Virtual Server technology they bought from Connectix.

Isn't this called OS X?

Re:not surprised

[HiThere]

I deny the presumption that MS is not evil. It's true that many monopolists have been worse, but this does not exonerate them.

They have repeatedly used force, fraud, and intimidation to put competing businesses out of business. Often these techniques were used to allow them to buy the business for pennies on the dollar. Occasionally they would end up in court. Sometimes despite the immense advantage that having more money gives in that arena they would lose. But what they were legally determined to be guilty of is a small fraction of what they have, in fact, been guilty of.

That "this is to be expected" may be true, but it's no excuse. The sole reason that it's to be expected is the sneaky, unlawful, and underhanded method of doing business that Microsoft has engaged in for decades. That they are rarely convicted of their real crimes say more about the way the laws are written and enforced than about any legality of their actions. The laws that they break are designed to be difficult to prove the transgression of. And only an district attorney or attorney general could bring charges for many of their actions, not the wronged party.

Hot?

[SuperKendall]

Aren't you all a bit hot in those tinfoil hats?

Dude, the shiny part goes on the outside!