Microsoft Has a History of Flouting Open-Source License Requirements

VII. FACTUAL ALLEGATIONS

I. Microsoft Has a History of Flouting Open-Source License Requirements

145. During the 1980s and 1990s, Microsoft was primarily a software company, focusing largely on operating systems and related applications. These included its DOS operating system and later, its Windows operating system. Windows generated billions of dollars in revenue from its sale and licensing as proprietary software for desktop computers and servers. Microsoft derived substantial income from sale of licensed products and devotes substantial resources to protecting and enforcing such licenses.

146. Windows is a graphical operating system. It allows users to view and store files, run software and games, play videos, and provides a way to connect to the internet.

147. Linux represented a competitive threat to Windows. It ran on the same hardware. It performed many of the same functions. It was free. Many programmers at the time considered Linux to be functionally superior to Windows.

148. Microsoft has engaged in a problematic practice known as “vaporware,” where products are announced but are in fact late, never manufactured, or canceled. Typically the company promising vaporware never has any intention of providing it. The term vaporware was coined by Microsoft in 1982 in reference to the development of its Xenix operating system.

149. Microsoft described its anti-Linux strategy as “FUD,” standing for fear, uncertainty, and doubt. Microsoft focused extra attention to Linux’s open-source aspects.

150. In 1998, a source at Microsoft leaked what became known as the “Halloween Documents”, revealing Microsoft’s thinking on how to counter the competitive threat from Linux. Among other things, the documents emphasized the importance of countering the “long term developer mindshare threat”, and concluded that to defeat open source, “[Microsoft] must target a process rather than a company.”[24]

151. In 2001, Microsoft CEO Steve Ballmer said “The way the [GPL] is written, if you use any open-source software, you must make the rest of your software open source. . . . Linux is a cancer that attaches itself in an intellectual property sense to everything it touches.”[25] Ballmer’s summary of GPL licensing was not accurate. In 2001, Linux was being used by corporations of every size. The growth of open source up to that point, and since, has been made possible by the open-source community’s respect for and compliance with applicable licenses.

152. In 2001, Microsoft was the defendant in a major software-related antitrust case, United States v. Microsoft Corporation. 26 In this case, the U.S. Department of Justice accused Microsoft of maintaining a software monopoly by illegally imposing technical restrictions on manufacturers of personal computers, including “tying” violations related to the Internet Explorer web browser. Judge Thomas Penfield Jackson, who presided over the antitrust trial, opined that Microsoft is “a company with an institutional disdain for both the truth and for rules of law that lesser entities must respect. It is also a company whose ‘senior management’ is not averse to offering specious testimony to support spurious defenses to claims of its wrongdoing.”[27]

153. In 2007, Microsoft admitted that it tried to influence the vote of an ISO openstandards committee by offering money to certain business partners in Sweden to vote for Microsoft’s preferred outcome.[28]

154. After observing the rapid growth of Amazon’s original cloud computing products, Microsoft has expanded its business into cloud computing, which it has branded Microsoft Azure or simply Azure. Microsoft announced Azure to developers in 2008. It was formally released in 2010. Azure uses large-scale virtualization at Microsoft data centers and offers many hundreds of services, including infrastructure as a service (“IaaS”), platform as a service (“PaaS”), compute services, Azure Active Directory, mobile services, storage services, communication services, data management, messaging, developer services, Azure AI, blockchain, and others.

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