Fwd: Mother Jones on Microsoft and BSA

[mj@creative.net]

Here's some more on Microsoft.

>Date: Mon, 22 Dec 1997 15:07:14 -0500 (EST)
>Reply-To: love@cptech.org
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>From: James Love <love@cptech.org>
>To: Multiple recipients of list <am-info@essential.org>
>Subject: Mother Jones on Microsoft and BSA
>MIME-Version: 1.0
>
>Date: Mon, 22 Dec 1997 09:07:37 -0800 (PST)
>    From: Richard Reynolds <reynolds@mojones.com>
> Subject: Mother Jones Microsoft story
>
>For Release:
>December 22, 1997
>Contacts:
>Richard Reynolds 415/665-6637 x240
>Kerry Lauerman 415/665-6637 x215
>
>Microsoft Blackmails Foreign Companies
>Switch To Microsoft, and Your Legal Problems Will Disappear
>
>Microsoft appears to be using the Business Software Alliance (BSA) to
>blackmail foreign companies into making exclusive deals with Microsoft,
>reports Mother Jones magazine in a story released last night on the MoJo
>Wire, Mother Jones' Web site:
>
>http://www.motherjones.com/mother_jones/JF98/burstein.html
>
>When the BSA tracks down companies using software pirated from its
>various members, reports Mother Jones investigative reporter Rachel
>Burstein, the offender is offered a simple out: Switch to Microsoft
>products and your legal problems will disappear.
>
>* In 1995 the BSA caught Antel, Uruguay's national telephone company,
>using unlicensed Microsoft, Novell, and Symantec software. Ricardo
>Tascenho, Antel's information technology manager, told Mother Jones the
>company settled the matter by signing a "special agreement" with
>Microsoft to replace all its software with Microsoft products. According
>to Eduardo DeFreitas, the BSA's lawyer in Uruguay, Microsoft's Uruguay
>manager, Tomas Blatt, instructed him to drop the suit so that Microsoft
>and Antel could "work out a deal for the future."
>
>* Felipe Yungman, Novell's manager of security for Argentina, says
>Novell's investigations also indicate that the BSA has set up sweetheart
>deals for Microsoft there. "Companies or government offices had to, as a
>condition [that the BSA] forgive them of piracy, replace Novell products
>with Microsoft products," he told Mother Jones.
>
>* In 1996, when the BSA sued the Australian shipping company Toll
>Holdings for piracy, the suit alleged that Toll illegally used copies of
>programs made by Lotus, Novell, Symantec, and Microsoft. According to
>Martin Dunne, Toll's chief information technology officer, other than
>keeping Symantec's anti-virus software, they only buy Microsoft now. A
>Novell official told Mother Jones that Toll "offered to legalize on all
>Microsoft products if [the BSA] dropped the suit." Both the BSA and Toll
>deny any impropriety.
>
>* In Slovenia, where 96 percent of all software is pirated, Microsoft's
>country manager, Aaron Marko, is also head of the BSA office. Marko says
>that because enforcement is difficult in the country's court system, he
>offers discounted
>
>Microsoft software to companies caught pirating by the BSA. Microsoft
>denies that the BSA acts solely on its behalf. But officials at
>Novell and Lotus told Mother Jones that they will stop actively
>participating in the BSA's programs in Asia and Latin America by the
>beginning of 1998.
>
>Greg Wrenn, senior corporate counsel for Adobe, says his company has
>stayed with the BSA, but he acknowledges Microsoft's upper hand: "If an
>attorney does Microsoft work and BSA work and never hears from another
>company besides Microsoft, he's going to do the work for the guy who's
>in his office every week."
>
>The BSA story is part of a five-part cover package on Microsoft featured
>in Mother Jones' January/February issue.
>#  #  #
>
>
>Full Article:
>
>Overseas Invasion
>by Rachel Burstein
>
>Like Coke, Nike, and the tobacco industry before it, Microsoft now has
>to
>hook new consumers abroad. But the company has discovered a way to bully
>foreign companies into buying Microsoft-and only Microsoft.
>
>In 1995 Antel, the national telephone company of Uruguay, was caught
>pirating $100,000 worth of unlicensed software programs from Microsoft,
>Novell, and Symantec. Antel was nabbed by the Business Software
>Alliance, a
>trade association that partly acts as a global bounty hunter for the
>software industry. The BSA's lawyers in Uruguay quickly filed suit.
>
>But instead of waiting for a ruling on the case, the BSA abruptly
>dropped
>the suit in the fall of 1997. The BSA receives funding from most of the
>top
>software companies but appears to be most heavily funded by Microsoft.
>And,
>according to Antel's information technology manager, Ricardo Tascenho,
>the
>company settled the matter by signing a "special agreement" with
>Microsoft
>to replace all of its software with Microsoft products.
>
>The BSA's lawyer in Uruguay, Eduardo DeFreitas, supports Tascenho's
>story:
>"Microsoft told me to stop working on the case because they would write
>an
>agreement with Antel." DeFreitas says Microsoft's Uruguay manager, Tomas
>Blatt, instructed him to drop the suit so that Microsoft could "work out
>a
>deal for the future." Blatt refused to answer questions about the
>settlement, claiming, "I don't have any information about the Antel
>case�.
>You should call
>BSA in Uruguay-Eduardo DeFreitas."
>
>Antel's situation suggests that when  the BSA cracks down on piracy
>overseas, it's Bill Gates who turns out to be the pirate.
>Representatives
>from rival firms complain that Microsoft is abusing its power within the
>BSA to speed its global dominance.
>
>Microsoft denies that the BSA acts solely on its behalf. "I am not aware
>of
>any instance where that has happened," says Microsoft attorney Brad
>Smith.
>And the BSA dismisses the charges; spokeswoman Diane Smiroldo calls them
>"hard to believe." But officials at Novell and Lotus confirm that by
>January, both companies will have stopped actively participating in the
>BSA's programs in Asia and Latin America. Novell says these allegations
>played a part in its decision; Lotus refuses to comment. Such concerns
>are also among the reasons Netscape is reluctant to join the BSA, says
>Netscape attorney Peter Harter.
>
>The accusations aren't just limited to Uruguay:
>
>* Felipe Yungman, Novell's manager of security for Argentina, says he
>and
>another staffer at Novell discovered, while pursuing their own
>investigation for the company, that the BSA was setting up sweetheart
>deals
>for Microsoft. "Companies or government offices had to, as a condition
>[that the BSA] forgive them of piracy, replace Novell products with
>Microsoft products," he says.
>
>were bullied by Microsoft, saying that he is trying to convince them to
>come forward. "Most of the companies don't want to get involved," he
>explains. "They think they need Microsoft. You cannot oblige them to
>testify."
>
>Mario Tucci, Novell's country manager for Latin America, supports
>Yungman's allegations. "If you call BSA, you will reach Microsoft," he
>says. "They shield Microsoft's actions with the BSA name. It's bad for
>us
>and [for] the software industry."
>
>* In 1996, when the BSA sued the Australian shipping company Toll
>Holdings
>for piracy, BSA lawyer Charles Gonsalves, of the Sydney-based firm of
>Mallesons Stephen Jaques, oversaw the case.
>
>"I generally handle cases for both Microsoft and the BSA," Gonsalves
>told
>Mother Jones.
>
>But while the suit alleged that Toll illegally used copies of programs
>made
>by Lotus, Novell, Symantec, and Microsoft, Martin Dunne, Toll's chief
>information technology officer, says the company settled by paying fines
>to
>only Symantec and Microsoft. And, Dunne says, other than keeping
>Symantec's
>anti-virus software, the company has made a significant change: Toll
>only
>buys Microsoft now.
>
>According to a Novell official, Toll "offered to legalize on all
>Microsoft
>products if [the BSA] dropped the suit." Both the BSA and Toll deny any
>impropriety. While a written agreement between Toll and Gonsalves does
>exist, neither party would reveal the terms of the settlement. When
>Gonsalves was asked if Microsoft ever paid for his handling of BSA
>cases,
>he chuckled and said, "That's a confidential matter."
>
>* In Slovenia, where 96 percent of all software is pirated, the head of
>the
>BSA office, Aaron Marko, is also Microsoft's country manager. Marko says
>that because enforcement is difficult in the country's court system, he
>offers discounted Microsoft software to companies caught pirating by the
>BSA. Does Marko see this as a conflict of interest, since he also
>supposedly represents other software firms? "BSA is trying to find the
>pirate. Then it is a question of marketing and product awareness to see
>who
>will get the legal market share," he says. When asked which BSA members
>have local subsidiaries that do local marketing, Marko says only
>Microsoft
>and Oracle, which is not a direct Microsoft competitor.
>
>These allegations "raise questions as to whether the BSA serves the
>interest of its members or whether it serves its dominant member," says
>James Love, director of Ralph Nader's Consumer Project on Technology.
>And
>for the foreign companies, he says, "these seem to be stories of
>blackmail."
>
>The BSA employs a team of more than 100 lawyers and investigators to
>find
>cases of software piracy-a crime it says costs the industry $11 billion
>a
>year. The BSA says it catches "thousands of cases a year," many through
>its
>55 piracy hotlines, the most famous of which urges employees to "Nail
>Your
>Boss" by calling.
>
>While the BSA won't release its funding details, it does say that money
>comes from membership dues, which are based on each company's software
>revenues. This is one way in which Microsoft dominates the BSA:
>Microsoft's
>annual revenues, for example, are eight times that of Novell, its
>largest
>rival.
>
>In the future, Novell and Lotus say they will use their own in-house
>resources for anti-piracy efforts in Asia and Latin America.
>
>But other BSA members, while concerned about Microsoft's role in the
>organization, aren't quite willing to go their own way. Greg Wrenn,
>senior
>corporate counsel for Adobe, says his company has stayed with the BSA
>despite having had some uneasy experiences with Microsoft. For example,
>Wrenn says, the Microsoft attorneys who worked for the BSA refrained
>from
>going after big Microsoft clients caught pirating Adobe products-until
>Adobe prodded them.
>
>Wrenn says Adobe will stay in the BSA, pressuring the organization to
>play
>fair. But he acknowledges Microsoft's upper hand. "If an attorney does
>Microsoft work and BSA work and never hears from another company besides
>Microsoft, he's going to do the work for the guy who's in his office
>every
>week," Wrenn says.
>
>
>
>________________________________________
>Richard Reynolds/Communications Director
>Mother Jones magazine
>415/665-6637 x240
>731 Market Street, 6th Floor
>San Francisco, CA  94103
>