Archive of UserLand's first discussion group, started October 5, 1998.

Re: The FSF is predatory and is not a charity

Author:Seth Gordon
Posted:8/29/2000; 7:06:25 AM
Topic:Next survey: Are you an open source developer?
Msg #:20458 (In response to 20402)
Prev/Next:20457 / 20459

Well, if you'd like to complain to the IRS about the FSF, go right ahead; I'd be interested in seeing the result.
...a 501(c)(3) may not compete directly with private enterprise except for the purpose of fund-raising, and the money raised in this way is considered "unrelated business income" and is taxed. If it amounts to more than 50% of the organization's income, it can't remain a 501(c)(3) non-profit. The FSF states on its Web page that "most" of its income comes from sales of CDs and T-shirts. Therefore, it is not a legitimate non-profit.
I find it hard to believe that the FSF's CD-sale revenue would count, in the IRS's eyes, as competing with private enterprise. On their Web site, under "How To Get GNU Software", they explicitly say that buying CD-ROMs "helps provide the funds for the GNU project", and they also point out that you can get copies by FTP or from a friend. (And if you don't have a friend who can make a copy for you, CheapBytes sells many different CDs of open-source software for $1.99 each plus shipping.)

Furthermore, one of the reasons that trustbusters worry about predatory pricing is that after the predation has driven all competitors from the market, the new monopoly can raise its prices and collect more profit from the monopoly than it could from a competitive market. (Remember, antitrust law isn't for the benefit of competitors; it's for the benefit of consumers.) The FSF can't possibly do that with its software.

Wide distribution of GPLed software helps the FSF's ideological goals, but it doesn't necessarily help the FSF as a business. Therefore, your "predation" argument falls flat.

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