Why are they buying the company?

Is it because SUN is cheap?

Is it  because IBM wants to improve OpenOffice and make it a better competitor of Microsoft Office?

Is it because IBM want to stop to fund Eclipse and use NetBeans instead (or to kill the competition)?

Is it because IBM wants to buy their customers?

One important aspect is the following: if IBM really buys SUN Microsystems we can easily foresee the end of the competition in the open source world for at least those tools:

• NetBeans vs. Eclipse
• GlassFish vs. WebSphere
• MySQL vs. DB2
• Solaris vs. AIX
• etc.

It is clear that this buy happen

1. IBM will drastically increase the monopolistic position in many IT areas
2. The customers of SUN Microsystems will have to migrate to the IBM tools within the next 5 years
3. The open source world will loose its competitiveness against closed source applications

I just hope that the European Commission and Mrs Neelie Kroes will avoid such buy for the sake of the competition!

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I document, based on this article “EU: Green MEP: ‘EU procurement rules possibly exclude Microsoft’” [2], the rules that each EU Member State as well as the European Commission and the European Agencies must follow while procuring.

I end my post with open questions to those public actors as the execution of such constraints could change drastically our daily life.

Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities[1] says this:

“Article 93

1. Candidates or tenderers shall be excluded from participation in a procurement procedure if:…
(b) they have been convicted of an offence concerning their professional conduct by a judgement which has the force of res judicata;
(c) they have been guilty of grave professional misconduct proven by any means which the contracting authority can justify;….”

But, if we continue the reading of the regulation we see that the article 95 says “Each institution shall establish a central database containing details of candidates and tenderers who are in one of the situations described in Articles 93 and 94 [3]. The sole purpose of the database shall be to ensure, in compliance with Community rules on the processing of personal data, the correct application of Articles 93 and 94. Each institution shall have access to the databases of the other institutions.”

I have some open questions:

1. What is the content of the central databases containing details about companies? Where is it stored? Is it public or not?
2. Are we sure that the lawyers review correctly the procurement rules before contracting?
3. Are the European Commission, the EU governments and EU agencies negligent, careless or lax?
4. Should we exclude the convinced companies from any procurement? If yes, for how much time?

Here is a non exhaustive list of companies having infringed the rules:

Telefónica charged record fine for price rigging (4 July 2007): http://www.euractiv.com/en/infosociety/telefonica-charged-record-fine-price-rigging/article-165243

Visa to appeal Commission’s €10m anti-trust fine (3 Oct. 2007): http://www.euractiv.com/en/financial-services/visa-appeal-commission-10m-anti-trust-fine/article-167353

Court confirms abatement of Belgian beer cartel [Danone and Interbrew] (8 Feb. 2007) : http://www.euractiv.com/en/competition/big-fines-vitamins-cartel/article-115485

Heavy fines for German bank [5] cartel: http://www.euractiv.com/en/competition/heavy-fines-german-bank-cartel/article-113823

EU cracks down on electricity-gear [6] cartel : http://www.euractiv.com/en/energy/eu-cracks-electricity-gear-cartel/article-161169

Cartes Bancaires flagged for anticompetitive behaviour: http://www.euractiv.com/en/financial-services/cartes-bancaires-flagged-anticompetitive-behaviour/article-167716

Maximum fines requested in Erika [Total] oil-slick trial: http://www.euractiv.com/en/transport/maximum-fines-requested-erika-oil-slick-trial/article-164264

New EU fine brings Microsoft bill to 1.7 billion: http://www.euractiv.com/en/infosociety/new-eu-fine-brings-microsoft-bill-17/article-170596

[1] Regulation of the Financial rules : http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002Q1605:EN:HTML

[2] “EU: Green Member of Parliament says ‘EU procurement rules possibly exclude Microsoft’ : http://ec.europa.eu/idabc/en/document/7567

[3] Article 94 of the Regulation on Financial rules

Contracts may not be awarded to candidates or tenderers who, during the procurement procedure:
(a) are subject to a conflict of interest;
(b) are guilty of misrepresentation in supplying the information required by the contracting authority as a condition of participation in the contract procedure or fail to supply this information.

[4] Fines were imposed on the following eight vitamins companies as follows:

• F. Hoffmann-La Roche AG (Switzerland): € 462 million
• BASF AG (Germany): € 296.16 million
• Aventis SA (France): € 5.04 million
• Solvay Pharmaceuticals BV (Netherlands): € 9.10 million
• Merck KgaA (Germany):€ 9.24 million
• Daiichi Pharmaceutical Co Ltd (Japan): € 23.4 million
• Eisai Co Ltd (Japan): € 13.23 million
• Takeda Chemical Industries Ltd (Japan): € 37.05 million

[5] Following are the banks found guilty of infringing article 81 of the EC Treaty and the respective fines :

• Commerzbank AG : 28,0 million EUR
• Dresdner Bank AG : 28,0 million EUR
• Bayerische Hypo- und Vereinsbank AG : 28,0 million EUR
• Deutsche Verkehrsbank AG: 14,0 million EUR
• Vereins- und Westbank AG: 2,8 million EUR

[6] Fines imposed to electricity-gear cartel:

• ABB, Switzerland 215.156.250 EUR
• Alstom, France 65.025.000 EUR
• Areva, France 53.550.000 EUR
• Fuji Electric, Japan 3.750.000 EUR
• Hitachi, Japan 51.750.000 EUR
• Japan AE Power Systems, Japan 1.350 000 EUR
• Mitsubishi Electric Corporation, Japan 118.575.000 EUR
• Schneider, France 8.100.000 EUR
• Siemens, Germany 396 562.500 EUR
• Siemens, Austria 22.050.000 EUR
• Toshiba, Japan 90.900.000 EUR

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R4egov: The technical components

The architecture of the system is based on Open Source or Microsoft solutions. We selected the two competing architectures to address the needs of the partners and to ensure an interoperability of the most used multi-tier architectures on the market.

Open Source Stack:

• Intalio|BPMS
• Apache foundation components
• WSO2 Enterprise Service Bus
• Web Services Specifications

Microsoft Stack:

• Microsoft BizTalk 2006 R2
• Microsoft SharePoint 2007
• Microsoft .NET 2.0
• Microsoft .NET 3.0
• Windows Communication Foundation
• Windows Workflow Foundation

Further information about the project available on http://www.r4egov.eu

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This post is based on my understanding of legal discussions. As I’m not a lawyer I already ask you to forgive me for the mistakes. It is clear that this post will be updated depending on the input of the readers or my offline discussions with legal experts.

Some introduction

A few months ago I wrote this post: Will gpl die at european administration now that eupl is available? where I asked if the European Commission will introduce a real competitor to the GPL in Europe thanks to its Open Source Licence. A licence that will be transposed as laws in the 27 European Union Member States.

The translation process

I knew that the European Commission was dealing with the translation of the EUPL because my company dealt with the process.

After a first proposal from the translation service of the European Commission, we requested to more than 40 “Open Source Licence” experts all over Europe to review, comment and propose amendment (if needed) to the Licence based on their national law.

Adapting the Licence to a Member State means that the public or private organisations wanting to use the EUPL in its language have the advantage that the Licence will preserve their national rights (copyright, obligations of the licensee, Chain of authorship, Warranty, Liability, Termination of the licence…).
Except the French Cecill licence, no other Open Source licence adapts its content with any national law!

Important notice regarding the language

The translations of the EUPL are translated in 22 languages. We are 27 Member States. We know that several countries recognise the same languages: French is used in Belgium and France; German is used in Germany, Belgium and Austria; Dutch is used in the Netherlands and Belgium…

Today, for me it is still unclear how the French version of the EUPL reflects the Belgian and/or the French law ?!? I have the same question for the other “shared” languages.

I assume that the transposition of the directive in the different laws will definitely address my incertitude

The workshop with the legal experts and Open Source practitioners

25 January 2008, Interoperable Delivery of European eGovernment Services to public Administrations, Businesses and Citizens (IDABC) organised a workshop during which all legal experts and OSS practitioners from across Europe have met to discuss their experiences with the EUPL.

A presentation of

• the Business Plan of the Informatics’ Directorate General (DG DIGIT) regarding the use of Open Source Software,
• The reasons to develop the EUPL
• Legal context and milestones of the elaboration of the EUPL
• the process of translation and quality control
• the future of EUPL: the v1.1, current and possible
  compatibility /GPL V3

The future version of the EUPL

Last topic of the day was the preparation of the next version of the EUPL by discussing with the legal experts of the possible amendments to be made to the current version of the licence.

Main discussions topics were the following:

Do we need to add the Application Service Providers (ASP) (See section 1 definition)?

As most of the open source applications are “server based” it should be essential to include it

Finland expert explained how to apply the hierarchy between the distribution and the communication based on the finish law (see section 1 definition)

EUPL says the following: “Distribution and/or Communication: any act of selling, giving, lending, renting, distributing, communicating, transmitting, or otherwise making available, on-line or off-line, copies of the Work at the disposal of any other natural or legal person.”

the Finish law gives this priority for the verbs presented in bold:

1. Making available
   1. Distribution
   2. Display
   3. Public performance (Music, Television)
   4. Communication

This prioritisation is important but still vague for me. Apparently this is linked with, for example, the difference existing between “watching the television” and “using a User Interface of an application”. Physically speaking you do the same: you watch a screen; but legally speaking there is a difference. As soon as I get further information I will update this post.

Polish expert explained that there is a difference between the “Work” and the “Software”

The EUPL says this (section 1 definitions): “The Original Work or the Software: the software distributed and/or communicated by the Licensor under this Licence, available as Source Code and also as Executable Code as the case may be.

- Derivative Works: the works or software that could be created by the Licensee, based upon the Original Work or modifications thereof. This Licence does not define the extent of modification or dependence on the Original Work required in order to classify a work as a Derivative Work; this extent is determined by copyright law applicable in the country mentioned in Article 15.

- The Work: the Original Work and/or its Derivative Works.”

The expert explained us that there is a difference between the “environment” and the “software”.

The environment encloses everything that allows software to run: the software, the files associated (like XML Schemas, scripts…), the database software…

The Software is just the piece of code that could run on a specific environment.

The expert requested to add new definition describing the concept of the environment.

German expert asked what means the verb “use”?

EUPL says this:

• Section 2 Scope of the rights granted by the Licence:
  • “…Any use of the Work, other than as authorised under this Licence is prohibited…”
  • “…use the Work in any circumstance and for all usage…”
  • “…The Licensor grants to the Licensee royalty-free, non exclusive usage rights to any patents held by the Licensor, to the extent necessary to make use of the rights granted on the Work under this Licence…”
• Section 5 Obligations of the Licensee: “Legal Protection: This Licence does not grant permission to use the trade names, trademarks, service marks, or names of the Licensor, except as required for reasonable and customary use in describing the origin of the Work and reproducing the content of the copyright notice.”
• section 8 Disclaimer of Liability: “…Except in the cases of wilful misconduct or damages directly caused to natural persons, the Licensor will in no event be liable for any direct or indirect, material or moral, damages of any kind, arising out of the Licence or of the use of the Work…”
• Section 10 Acceptance of the Licence: “Similarly, you irrevocably accept this Licence and all of its terms and conditions by exercising any rights granted to You by Article 2 of this Licence, such as the use of the Work…”

The verb “to use” must be understood as “to run the program”.

Section 7 Disclaimer of Warranty

Apparently the 3rd paragraph poses problem: “This disclaimer of warranty is an essential part of the Licence and a condition for the grant of any rights to the Work.”

The question by the German expert was “what happens if there is a problem with the national law?”

Apparently a change in the wording will be needed (unfortunately I didn’t write it down to share it inside this post)

“Section 7 paragraph 3″ and Section 13 are contradictory

Section 7 paragraph 3 says: “This disclaimer of warranty is an essential part of the Licence and a condition for the grant of any rights to the Work.”

Section 13. Miscellaneous says: “Without prejudice of Article 9 [Additional agreements] above, the Licence represents the complete agreement between the Parties as to the Work licensed hereunder. If any provision of the Licence is invalid or unenforceable under applicable law, this will not affect the validity or enforceability of the Licence as a whole. Such provision will be construed and/or reformed so as necessary to make it valid and enforceable...”

Effectively, Section 7 says that the “disclaimer of warranty is an essential part of the Licence” where the Section 13 days that “[if some] provision of the Licence is invalid or unenforceable…this will not affect the validity … of the licence as a whole”.

In Italy, clauses limiting warranties must be “double signed”

Section 7 should be updated in Italian because the clauses limiting the warranties must be signed by the licensor and the licensee: Reading and clicking on a button demonstrating your acceptance of the licence is not sufficient!

Bugs inherent to the Open Source software?!?

A legal expert correctly mentioned that the section 7 Disclaimer of Warranty says this “The Work is a work in progress, which is continuously improved by numerous contributors. It is not a finished work and may therefore contain defects or “bugs” inherent to this type of software development.”

This sentence presumes that Open Source Software quality is such that bugs are inherent to this type of software. Meaning that other types of applications (read closed source applications) are not subject to bugs

This sentence will be removed in the future.

What means “reasonable” in the Section 13 Miscellaneous?

Section 13 says this: “The European Commission may put into force translations and/or binding new versions of this Licence, so far this is required and reasonable.”

Reasonable adjective is too vague. People could imagine that the European Commission can change the type of the Open Source classification of the EUPL to a closed source classification.

Off course, this is not the vision of the European Commission!
German expert proposed to change the adjective “reasonable” by something like “Open Source licence” or “Copyleft licence”.

Conclusion

This is not my first meeting with legal experts but it is maybe the first time that I could understand each word of an Open Source Licence thanks to the translations that was made available.

Off course, the GPL has been translated by people without any warranty of quality and completeness but here, we discussed with people wanting to translate an Open Source Licence that can be used in Europe and be used in its own language.
A lot of money has been used to translate this Licence but the advantage for the European Public or Private organisations that don’t need to translate it individually is such that our money has been perfectly used.

Today, people are working on the comments made by the experts in order to propose a new version of the Licence. It will take months before the version 1.1 will be released and everybody is free to make comments on this licence to make it the most used Open Source licence in Europe!

References

European Union Public Licence v1.0: http://ec.europa.eu/idabc/en/document/6523

Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs: http://europa.eu/scadplus/leg/en/lvb/l26027.htm

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When you use GMail and receive an email containing MS Word or an MS Excel document, GMail proposes you three options (Click on the screenshot below to see it full size):

1. View the document as HTML
2. Open [the document] as a Google document
3. Download the document

The problem with this approach is that GMail doesn’t allow you to open your document with his competitors like Zoho, Thinkfree or gOffice.

A much better/competitive solution should allow the GMail users to modify his settings. If the user subscribed to a competitor, he should be able to select the competitor.

In the future, the user should be able to load his attached documents with the Web2.0 application of his choice (Click on the screenshot below to see it full size)

Now, dear European commissioners, isn’t the time to put pressure on this new monopoly like you did with Microsoft in a recent past?

List of online Word processors :
http://itredux.com/office-20/database/?family=Word Processor

List of online Spreadsheet applications:
http://itredux.com/office-20/database/?family=Spreadsheet

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European Union Public Administrations can now release their software under a licence that “takes care of their national specific copyright terminology and their provisions related to information, warranty or liability exclusion respecting consumer’s rights”. This is also related to “applicable law and competent court, as the EUPL guiding principle is based on trust towards Member States’ parliaments and judges without restrictions or exceptions”.

Does mean a threat to the GPL? Off course not, the writers of the Open Source Licence demonstrated an openness of mind by authorising the re-distribution of derivate works under the compatible licence:

• GNU General Public Licence v2.0
• Cecill v2.0
• Open Software Licence (OSL) v2.1
• Open Software Licence (OSL) v3.0
• Common Public Licence v1.0
• Eclipse Public Licence v1.0

Should the licensee’s obligations under the compatible licence conflict with EUPL’s obligations, the obligations of the Compatible Licence shall prevail. If other similar licences could be inspired by this open mind, the « free licence wars» and resulting incompatibilities would rapidly end!

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1. an on-line collaboration server: Communication and Information Resource Centre Administrator (CIRCA), a forum like application used by the European Commission, the Member States and the European Commission’ contractors; public access is also available.
2. an on-line tool IPM that provides functionalities for “Interactive Policy Making”, a survey-like application

This is a great opportunity for Public Administrations to get an Open Source licence

1. transposed into their national law,
2. translated into their native language,
3. targeted for European public sector legal services with:
   1. Full « European » copyright coverage (communication / moral rights)
   2. EU compatible liability and warranty clauses
   3. EU compatible applicable law and jurisdiction clauses
4. Compatible with GPL

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The aim of this meeting was to try to find synergies between two European Commission projects:

• OSOR that will (i) setup an open source repository for the European Public Administrations, (ii) provide news, guidance, links, contacts concerning Free Libre Open Source Software, (iii) providing technical, organisational, and legal support to apply Open Source concepts inside the Public Administrations.

• QualiPSo is a unique alliance of European, Brazilian and Chinese ICT industry players, SMEs, governments and academics to help industries and governments fuel innovation and competitiveness with Open Source software. To meet that goal, the QualiPSo consortium intends to define and implement the technologies, processes and policies to facilitate the development and use of Open Source software components, with the same level of trust traditionally offered by proprietary software.QualiPSo is the ever largest Open Source initiative funded by the European Commission, and is funded under EU’s sixth framework program (FP6), as part of the Information Society Technologies (IST) initiative. QualiPSo is launched in synergy with Europe’s technology initiatives such as NESSI and Artemis.

In short, to setup a repository for Public Administrations we need (i) Quality Software factories reviewing the quality/reliability of the free softwares available on the forge, (ii) best practices concerning the development of Open Source Software are shared accross organisations, (iii) state of the art stacks reliable and usable by any organisation; many deliverables that will be delivered by QualiPSo team during the next 4 years.

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Studies and Drafts are also available.

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