I was pleased to see Braden’s excellent new paper on the use of self-serving lobbying tactics to limit competition and promote particular business models at the expense of others. As Braden and his co-author point out, some of the most important competition in the software industry has become less about products than about business models. Some software companies sell the software directly, while others give software away as a means of selling hardware, services, or advertising. And in many cases, public policy debates in the software industry are thinly-veiled attempts to give some business models unfair advantages over others.
Braden produced a chart that gives some helpful examples of policies that tilt the economic playing field toward one business model at the expense of the others:
As you can see, software patents promote proprietary software business models at the expense of business models based on giving software away for free (and, it should be said, at the expense of people who want to give software away for free on a non-commercial basis). Similarly, the DMCA promotes proprietary software business models. They neglected to put it on the chart, but the flip-side is obviously true: the DMCA harms free software, commercial and otherwise, by making unauthorized interoperability with DRMed software a crime.
Braden does a great job of explaining why we should be concerned about public policies that limit competition or tilt the playing field toward particular business models:
It rarely serves the public interest to erect barriers that favor specific business models. Yet companies will try to game the system to their advantage by lobbying policy-makers to create policies that favor their business model over those of their competitors…
We expect companies to embrace public interest values in marketing campaigns appealing to multiple stakeholders, including employees, investors, and consumers. However, when a company links its business model to the public interest in order to obtain regulatory advantages, then it’s caveat
legislator. Policymakers should be cautious when pursuing public goals through business regulation.
Indeed they should. On the other hand:
It’s unequivocally beneficial to lobby policymakers to remove legacy regulations that prevent competition from new business models… Businesses, consumers, and our economy all benefit from lobbying efforts to remove barriers to competition…
Quite so. The report isn’t really focused on the DMCA or software patents, so you have to read between the lines a little bit, but I think the implications of Braden’s argument are pretty clear. In many cases, public policy debates between companies are little more than thinly veiled rent-seeking. Each company figures out which policies would most benefit its own bottom line and then comes up with plausible-sounding public interest rhetoric to justify the policy that happens to be in its own interest.
In contrast, Red Hat lobbies for the repeal of software patents, it’s not merely advocating its own self interest, but a level playing field free of regulatory distortions. Red Hat isn’t seeking any special regulatory favors, it just wants to be free to innovate without having to consult patent lawyers at every turn. As Braden says, consumers, business, and the economy all benefit from efforts to dismantle legal barriers to competition. It’s a great report, and I hope ACT will follow up their inspiring words with bold actions.