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More arrests, computers seized in FBI piracy bust

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The Justice Department seized hundreds of computers and arrested four people in an international crackdown on Internet pirates illegally distributing copyrighted video games, software and first-run movies, such as the latest episode of "Star Wars."

Agents executed 90 search warrants in the United States and 10 other countries as part of Operation Site Down. The raids, which began Wednesday, shut down at least eight major online distributors and seized pirated works worth more than $50 million, authorities said.

At a news conference Thursday, Attorney General Alberto Gonzales credited the busts with "striking at the top of the copyright piracy supply chain." Gonzales said the piracy rings are responsible for providing ``the vast majority of the illegal digital content now available online.''

Online piracy rings are known as "warez," pronounced ``wares.'' They function as underground cyberspace co-ops, in which members swap the latest copyrighted material. Warez groups are notoriously difficult to penetrate. Many are based overseas and users are tech-savvy, communicating in encrypted messages and requiring codes and passwords.

FBI agents infiltrated the secretive community by setting up servers and offering large amounts of computer space for members to store stolen material, according to court papers filed in U.S. District Court in the Northern District of California.

Pirated material soon poured onto the FBI server, including "Batman Begins," "Bewitched" and "Star Wars Episode III: Revenge of the Sith," which arrived just hours after it opened in movie theaters across the country.

The federal operation targeted "first-providers," or those who provide the copyrighted work to the groups.

Arrested were: William Venya, 34, of Chatsworth; Chirayu Patel, 23, of Fremont; Nate Lovell, 22, of Boulder, Colo.; and David Fish, 24, of Watertown, Conn. Criminal complaints charged each with copyright infringement and conspiracy to commit criminal copyright infringement.

The four have been ordered to appear July 14 before U.S. Magistrate Judge Howard R. Lloyd in San Jose.

By Shannon McCaffrey
Knight Ridder

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A victory for free software over the "Microsoft tax"

This is a guest post by Marco Ciurcina, a lawyer who worked on this case.

The Italian Supreme Court (Corte di Cassazione) issued a judgment1 that bans the "Microsoft tax," a commercial practice that discourages users from converting their PCs to GNU/Linux or other free operating systems by forcing them to pay for a Windows license with their PCs. PC producers in Italy now cannot refuse to refund the price of the license to purchasers that will not run Windows.

The ruling definitively concludes the case filed in 2005 against a hardware producer by Marco Pieraccioli,2 with the support of the Consumer Association ADUC,3 and affirms Marco Pieraccioli's right to a refund for the price of the Microsoft Windows license for the computer he purchased.

The primary reason to insist on using free software4 is because nonfree software deprives the user of freedom, including the freedom to participate in its development. The "Microsoft tax" has no effect on that issue.

The "free" in "free software" refers to freedom. It does not mean "gratis," and copies of free software do not have to be distributed without charge. Selling a copy of one free program or many of them is legitimate.5

However, most GNU/Linux distributions are offered to the public gratis, while Windows is not. Therefore, switching to GNU/Linux offers an opportunity for the secondary benefit of saving money -- a benefit that many Italians would value. The "Microsoft tax" has the effect of abolishing that secondary benefit. Now the secondary benefit must be available.

The ruling applies to more than just Windows. The Court states a general principle that applies to any device with software preinstalled: "...who buys a computer on which a given operational software (operating system) was preinstalled by the manufacturer has the right, if he does not agree to the conditions of the license of the software made available to him at first start of the computer, to retain the computer returning only the software covered by the license he did not accept, with refund of the part of the price that specifically relates to it."6

According to the Supreme Court, any commercial practice that prevents the user from getting a refund "..would clash in different ways with the rules that protect the freedom of choice of the consumer, and the freedom of competition among firms..."7

On the one hand, therefore, the judgment follows the path of the French Courts' case law, that on several occasions stated that the joint sale of hardware and software, without providing for the buyer the possibility to obtain refund of preinstalled software, violates the right of the consumer.8

On the other hand, the Italian Supreme Court states that the act of hindering the refund violates the freedom of competition among firms. This statement of principle is interesting considering that, to date, the antitrust authorities have done little against business practices that "force" the joint sale of hardware and proprietary software. Now they may consider taking stronger action.

The focus of the Court's reasoning is that the sale of a PC with software preinstalled is not like the sale of a car with its components (the 4 wheels, the engine, etc.) that therefore are sold jointly. Buying a computer with preinstalled software, the user is required to conclude two different contracts: the first, when he buys the computer; the second, when he turns on the computer for the first time and he is required to accept or not the license terms of the preinstalled software.9 Therefore, if the user does not accept the software license, he has the right to keep the computer and install free software without having to pay the "Microsoft tax."

Notes:

1 Judgement n. 19161/2014 published 11/9/2014
http://www.italgiure.giustizia.it/xway/application/nif/clean/hc.dll?verbo=attach&db=snciv&id=./20140912/snciv@s30@a2014@n19161@tS.clean.pdf.
2 I had the honor to assist before the Supreme Court Marco Pieraccioli who already had favorable decisions both at first instance (judgment no. 5384/2007 of the Giudice di Pace di Firenze) and in second degree (judgment no. 2526/2010 of the Tribunale di Firenze).
3 See http://aduc.it/.
4 See https://www.gnu.org/philosophy/free-sw.
5 See https://gnu.org/philosophy/selling.
6 See p. 22 of the judgment.
7 See p. 21 of the judgment.
8 See http://non.aux.racketiciels.info/.
9 The judgment at p. 21 states: "Having been assessed that there are not technological obstacles, the 'packaging' at the source of hardware and operating system Microsoft Windows (as it would for any other operating system for a fee) would actually respond, in substance, to a trade policy aimed at the forceful spread of the latter in the hardware retail (at least in that, a large majority, headed by the most established OEM brands); among other things, with cascade effects in order to the imposition on the market of additional software applications whose dissemination among final customers finds strong stimulus and influence - if not genuine compulsion - in more or less intense constraints of compatibility and interoperability (that this time we could define 'technological with commercial effect') with that operating system, that has at least tendency to be monopolistic".

© Marco Ciurcina, 2014 – Some rights reserved This work is licensed under a Creative Commons Attribution 4.0 International License or any later version. Read more


This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 license (or later version)

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