Microsoft: "Drug-Dealing Methods"

Interview with Sérgio Amadeu da Silveira, the Brazilian government member Microsoft wanted to sue.

In the Brazilian battle between open-source and proprietary software, Microsoft has threatened to go to the courts. And the company has come off badly. In the last two weeks, it has backed down, attempting to control the damage done to its image by the summons directed at the sociologist and professor Sérgio Amadeu da Silveira, head of the ITI (National Information Technology Institute), a government body charged with implementing open-source software here.

Through their lawyer, Mario Panseri Ferreira, Microsoft demanded that Silveira explain a statement he made in the March 30 issue of the weekly business-focused magazine, Carta Capital. In his statement, he accused Microsoft of using "drug-dealing methods" by offering Windows to state and city governments as part of social inclusion programs. On May 14 (45 days later), based on the Press Law--introduced by the military dictators who ran the country until the 1980s--the world's leading software company demanded a judicial explanation. Under Brazilian law, this marks the first step in suing Silveira for slander.

Support for Silveira was immediate and came from all sides--members of the federal and state governments, congressmen, senators and members of the Free Software community worldwide. Senator Sery Slherssarenko and Congressman Sérgio Miranda made public statements in Congress in his favor. The Brazil Free Software Project launched the "Brazil has the right to choose" campaign, backed by a digital petition which, by June 27, had received more than 8,000 signatures from around the globe. His supporters include Lawrence Lessig, Professor of Constitutional Law at Stanford University; and Richard Stallman, head of the Free Software Foundation (FSF); Hipatia, the Italian NGO; and others.

Freedom to Choose

On the other side, Microsoft had been keeping a low profile on the affair, avoiding the open confrontation heralded by its summons. In fact, the company issued a statement to the newspaper O Estado de S. Paulo through its Director of Legal Affairs, Rinaldo Zangirolami, denying that there would be a lawsuit and insisting the firm had no intention of intimidating anyone. Microsoft subsequently issued an official release that appeared to signal an end to the affair: "Microsoft is fully aware that Brazil has the right to choose the best technology for its needs. The company is confident of the competitive merits of its technology, which any objective analysis will show to be both innovatory and of great value to potential clients. São Paulo, June 18, 2004. Microsoft Brasil."

By June 21, the storm finally appeared to have abated. The following day, however, the Ministry of Science & Technology's Policy Secretary, Arthur Pereira Nunes, opened the country's main IT event, CONIP (Public Information Technology Congress) and used the occasion to voice his support for Silveira and attack Microsoft:

I am totally opposed to any attempt at intimidation. The debate on information technology in Brazil has been characterized by the democratic nature of the discussions, but the same cannot be said for some of the people involved in this sector. Microsoft must take a long, hard look at its behavior, which is simply not compatible with the building of a democratic society.

The speech received a lengthy ovation.

At the same event, Silveira and Microsoft took part in the debate over industrial property. The firm's representative, Nabuco Barcelos, Microsoft's national technology director, made no mention of the judicial summons and steered clear of any confrontation, merely clarifying Microsoft's position on the issue and playing down the economic importance of usage licenses: "These licenses account for only 4% of a given solution's total value."

No Explanations to Monopolies

At the beginning of the year, Sérgio Amadeu da Silveira spoke to me in an exclusive interview. Recently, he shared his outlook on the case and his thoughts about Microsoft with journalist Renato Cruz during an open interview for the Brazilian press, the content of which has not been published yet. Below are some excerpts from our conversation.

Question: What do you think of Microsoft?

Silveira: Microsoft is a technology company that uses a development model currently being replaced all over the world--proprietary software.

Question: Why did you decide not to reply to Microsoft's judicial summons?

Silveira: I consulted some lawyers and the government's Sub-Department of Legal Affairs and learned that any reply from me also would be a reply from the government. What Microsoft did was so absurd that it didn't deserve an answer. It tried to use the Press Law against an opinion whose context it should have confirmed first. They wanted to intimidate us by turning a technological policy issue into a legal one. Besides, we don't owe monopolies any kind of explanation whatsoever.

Question: Has this episode changed the government's opinion of Microsoft?

Silveira: I cannot answer on behalf of the entire administration. What I can say is that Microsoft made a huge mistake. The captive market they enjoyed within our government is a thing of the past, and I'm sure they are well aware of that. We live in a democracy where there is competition. They made a big mistake, they appear to have an attitude problem. What they did was unprecedented. We're working for a free-software implementation policy, not against this or that company.

Question: Can you explain the comparison you've made between Microsoft's license distribution policy and the Greeks' Trojan horse?

Silveira: Microsoft's strategy is to try and change the model it doesn't have because it sells licenses. The open-source companies don't. So Microsoft does that to maintain its product stranglehold, while at the same time emphasizing its license donations, which is akin to presenting us with the Trojan horse. They want us to utilize taxpayers' money to build a critical mass of school teachers, who will in turn teach their students how to use the software of a multinational monopoly. And then a chain reaction sets in: drugstores, bakeries and other small businesses in small country towns--where information technology is accessible only in schools--will have to use Microsoft´s proprietary software. By using free software, we can show all these regions that there is an alternative, that we do not have to depend on a single company, because several others are participating in this software-use development.

Question: What has been Microsoft do Brasil's attitude during this process?

Silveira: A few months ago we received a visit from Microsoft do Brasil's CEO, who said the company was interested in contributing to the development of Brazilian software. We believe there is a place for Microsoft, but the government has an option: using free platforms. But we have never drawn up decrees, laws and prohibitions. On the contrary, all we've done is to hold a series of meetings to show ministries that open-source software is superior to proprietary platforms. So what matters is that when they adhere to our point of view, they do so because they want to, not because they were told to.

Question: Among those private-sector firms using free software, we have the retail chain, Casas Bahia, and Petrobrás. Who is leading the way in the federal government?

Silveira: Serpro (Federal Data Processing Service), Dataprev (Social Security Data Processing Company) and the ITI itself. In addition, the Cities, Arts, Navy, Air Force, Communications and Mines & Energy Ministries are making the change. It also is worth remembering that 58 bodies voluntarily have joined the Free Software Implementation Committee and are developing other open-source applications. Income tax return procedures, for example, are now multiplatform.

Question: How are you managing to measure the expenditure and savings generated by the migration to free software? And how long will it take?

Silveira: Each body requires its own meticulous planning. In general, though, we have laid down some guidelines to facilitate the change. First, is to free the workstations. Develop new free-software systems; which means getting the developing firm to hand over the source code and the four basic software rights--use for any purpose, code totally open to study, capable of being modified at any time and freely distributable. We have drawn up a strategic plan involving 140 servers in 54 public bodies, and this year we shall be drawing up a balance, so we will have the numbers and a process progress report.

Question: How long do you think it will take to equip 300,000 government workstations?

Silveira: If the ministries implant free software in desktops and servers, we will have a chain reaction. Without any historical basis for comparison, it's difficult to be precise and state, for example, that in two or three years 50% or more of all federal-government desktops will be using open-source software. What we can affirm, however, is that chain reactions are a feature of information technology; that is, if something works well, its use mushrooms. And that's the idea.

Question: How does the government's free-software policy mesh with its software export policy? How can you make money exporting free software?

Silveira: Most of the world's IT firms are not living on license fees anymore. Brazil's biggest one makes less than 20% of its earnings from licensing; most comes from the provision of solution-development services. The more free software we have in Brazil, the more we will be sought out to help companies and banks in Europe effect the change-over. In fact, this is happening already.

Brazil's way forward is to take advantage of our knowledge of free software and its associated services to sell this expertise abroad as a competitive edge. Take the powerful games industry, is Brazil equipped to compete with the Americans? Well, we are, but there's no edge to be had with the proprietary software model. However, if we develop games based on open-source software, we can make money through the portal--users pay to access the portal and play the game for a determined period. In addition, they can download the game and access the source code. Those who are interested, in addition to playing the game, can join the game development community and contribute to new versions.

Question: How do you see the Brazilian government's adoption of Linux?

Silveira: We are initiating a process of cultural change. By adopting free software, we are in fact shifting to a new paradigm, so you have to change the culture as a whole, the very ideas on which development is based, of how to use the platforms. And this is by no means an easy task. Personally, I believe that by the end of this administration's mandate, several ministries will have made the change to the open-source platform, and I expect that to hold for schools and the government's social inclusion programs too. If, at the end of Lula's mandate, we have some ministries, plus government servers and schools all using free software, I believe we can set off a chain reaction, so that small firms here not using IT yet will adopt the free software model when they do so.

Question: The Brazilian software industry always is complaining that the government doesn't have a clear policy, a sufficiently strong concept to allow for exports.

Silveira: We intend to encourage the setting up of development centers that can outsource, that can attract code development here. And we intend to do this in an organized manner, so financing definitely will be forthcoming. We will build Brazil's reputation abroad by actively seeking out markets there. At the same time, we will be creating an enormous competitive differential at home by using free software. All in all, then, we aim to use the country's purchasing power to acquire open-source products and, at the same time, encourage exports.

Question: At the global summit on the information society, Brazil pleaded for a flexible and broad concept of intellectual property. What exactly is this concept?

Silveira: For example, to have legislation that fosters the sharing of knowledge and which does not attempt to transform software into something that can be patented, transform algorithms into something which becomes the property of a given economic group. Such a system is not equipped to create breakthroughs, to generate new developments. In fact, it blocks and freezes technological knowledge. We do not believe our intelligence should be hamstrung, that we should be prevented from participating in global software development, which it currently is easy to do. There are thousands of protective software patents filed away in US patent offices. As long as software can be patented, it means we cannot use a determined logical procedure for 20 years, which is plainly absurd.

Question: Does proprietary software transform the public sphere into a private one?

Silveira: Proprietary software is a feudal concept. In fact, the whole proprietary licensing model is distinctly odd. I mean, whose property? For example, let's say I buy package X, which has a license to use, but just take a look at this license. I buy the software, but I don't own it--the company owns it. I have a license to use it, but the money I've spent is like rent, it's a kind of digital unpaid labor--I pay for it, but it's not mine. Open-source software is in the public domain, it belongs to everybody, there is no private ownership. Most proprietary software users aren't aware of the problem. They say to themselves: "I bought this software". But did they? In fact, it's still the developer's property, the user doesn't own anything. He's only acquiring the right to use it, but he can't change it. In the real world, if I buy a house, it's mine. I can knock down walls, do whatever I like with it, as long as I remain within the law. After all, I'm the owner. But I can't do any of this with proprietary software.

Pedro Cadina ( is a journalist and director of the communications agency, Via News Comunicação



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Anyone else notice this?

Anonymous's picture


[Q] How do you see the Brazilian government's adoption of LINUX?

[A ... ] By adopting FREE SOFTWARE [...]

Unquote.. (Emphasis mine.)

Did he /once/ use the term Linux? Even when asked specifically about Linux, he recharacterized the question in the broader terms of "free software" (which one must in context read as software libre, oh, the vagaries of English).

This cannot /but/ be deliberate, and means a deliberate choice of inclusiveness, as opposed to limitation, in at least two aspects.

1) It's clear that he's targeting development both internally and for export, and just as a desktop front-end to Access where both are running on an MS platform wouldn't be part of "Windows", so for instance a desktop front-end to MySQL with both running on Linux wouldn't be part of "Linux". By deliberately choosing the more inclusive term, he's deliberately including software applications running on Linux that neither himself nor the application author would be presumptive enough to call part of Linux itself.

2) Perhaps more importantly, he's deliberately NOT limiting himself to Linux-platform-only solutions. In some situations, one of the BSDs, for instance, may be preferable, either tecnically, or due to license flexibility issues. (Yes, that's said as one that has personally deliberately chosen Linux and GPL over the BSDs and the ability for proprietary appropriation of my work. A BSD style license with its added flexibility does indeed have its place, as an implementation of something that one intends to be a standard for both proprietary and non-proprietary platforms, for instance,)

I'd consider this a VERY wise choice on his part, not only because it supports flexibility, but also because it supports his statements and those of others that this isn't pro or con any specific software company or implementation, but rather, addressing the ideals of the most benefit for ALL its citizens that a government is /supposed/ to strive for.

Duncan (who followed the link from LWN)

Re: Microsoft:

Anonymous's picture

Microsoft claims that software licenses are 4% of total cost are ridiculous and shows that company, even its national director, knows nothing about Brasil. US$ 1,00 is around R$ 3.00, and a professional earns here too much less than in the USA. A COMPLETE training on Conectiva linux, from basics to advanced administration is around US$ 500,00. Hum... the same price of a Windows XP + Office XP. A Unix expert can earn US$1200... Hum... 2.5 Office + windows. an Unix expert that can take care of 50 Linux Machines with Free Software.
Training? Support? i really want to see numbers in Brasil's economy.

Numbers are high.

Anonymous's picture

IT related costs are pointed out as the highest in our imports (I'm Brazilian). I heard some talking about 2 billion dollars (maybe not much to advanced economies, but Brazil is kinda of a teenager, economically speaking).

Licences are said to be almost 20% of that.

Even if they were not so costly, licences and support contracts play a major role in the purchase of hardware. They are an effective means to assure a less competitive arena. Big companies are known to make "bundles" of software and hardware, sometimes offering software for free, while keeping hardware prices bloated.

Free software is commoditized. This also means more competitors can afford to bring up offers, because the "market chain" (all things between producer and consumer) is simplified. Also, despite prices being reduced, margins get higher, because software costs are transferred to the "bazaar"-stiyle community.

This is totally reasonable, generally accepted and even desired by developers: no free software developer gets angry for not receiving royalties, that's part of the GPL game.

Private corporations, on the other hand, simply cannot afford to bear alone such costs. Either because this would risk the company survival, or due to management having to report to shareholders, who want a return on their investment.

Ironically, for a long time, proprietary software was inexpensive and there was little incentive for people to try non-charged alternatives -- but now, prices are climbing very steeply and some run from proprietary like from the plague. The superior quality of free software comes as an added bonus.

Just my opinions...

Wrong Wrong Wrong ARRRGG

Anonymous's picture

"Open-source software is in the public domain, it belongs to everybody, there is no private ownership."

The above comment is soooooo wrong. I really wish the people who strongly support Open Source would get it right - it makes them look silly when they don't . If I open source software that is NOT THE SAME as putting it into the Public Domain. In fact the code does NOT belong to everybody but to me and there IS private ownership - the code is mine. The Open Source license (depending on which license is used) gives you the right to distribute, copy, and modify the program. Your modifications are still your own. This is how copyright works and why the GPL in particular is so effective. If the GPL gets overturned that doesn't mean the software reverts to Public Domain but the governing law would be Copyright. Silveira: It's great what you are doing for your country and open source in general *BUT* be accurate - Open source is not public domain.

Re: Wrong Wrong Wrong ARRRGG

Anonymous's picture

In Brasil the term "public domain" is used to one thing that anyone can ACCESS, not own.
here this term is use like in a bus, the bus is in "public domain", anyone can use, but a few group of people own the bus.
Sergio Amadeu knows the diference between the terms, the translator of this paper no.

Re: Wrong Wrong Wrong ARRRGG

Anonymous's picture

Mod Up Parent

Ignorant, ignorant, ignorant, context moron

Anonymous's picture

I'm sensing you didn't take anything covering inter-societal linguistics. The term "public domain" was not meant as the legal term "public domain," and I'm pretty sure the head of the ITI knows the difference. Please don't waste other people's time with your reactionist responses.

E. A. Zen

Re: Ignorant, ignorant, ignorant, context moron

Anonymous's picture

I'm not saying that what Silveira is doing isn't great. But I am tired of those who don't know the terms of the very license they advocate.

You said:
The term "public domain" was not meant as the legal term "public domain.

I would have agreed until he said:

"Open-source software is in the public domain, it BELONGS TO EVERBODY, there is no private ownership"

Wrong, Wrong, Wrong! .. and this has nothing to do with "inter-societal" linguistics. Silveira could have just as easily said something along the lines: Open source software allows you to distribute, copy and modify the collected works of contributors everywhere. It's not being able to articulate what Open Source properly is that allows Microsoft to pass "Shared Source" as some kind of open source license. You then say:

" I'm pretty sure the head of the IT knows the difference"

Well Genius I DONT THINK HE DOES know the difference. He gives a REALLY BAD example as follows:

" In the real world, if I buy a house, it's mine. I can knock down walls, do whatever I like with it, as long as I remain within the law. After all, I'm the owner. But I can't do any of this with proprietary software."

His example is a VERY POOR one. It's like saying if I buy a book then I own the contents of that book. I can make copies, modify it, and pass it off as my own because I paid for it. Well we both know that you can't do that. Just because you buy the book you don't own the book contents - this is COPYRIGHT and is something that most people understand. So again I applaud Silveira BUT the head of Information Technology should really read the license agreement of the software he's using whether it's Open or Closed source. I'm sure it will help in his career as IT Manager.

Re: Ignorant, ignorant, ignorant, context moron

Anonymous's picture

U moron .. keep saying people doesnt know the very license they advocate .. u dont know too .. GPL is open-source ? when where how ?
u didnt ever read anything about it huh ?
GPL is about FREE SOFTWARE and copyleft license .. wich is different from open-source. take a look at
dont just blow your criticism over anyone u hav in front of u ..
try to have some psicological control and go find something else to do ... code nice open-source or free software would be a nice idea :)

It's the right context

Anonymous's picture

Actually, I believe he qualified it quite well.
He said: " long as I remain within the law."

Now what law governs software in general? - copyright law And specifically, licences like the GPL relies very much on this law.

Hence, I feel comfortable with his statements.


Re: It's the right context

Anonymous's picture

In Brasil the GPL not have legal embasement.
The Brasilian Free Software community used her lawyers to recreate the GPL to Brasil context.
How everyone knows, the Brasilian F.S. community is the first around world that has his version of GPL accepted by the FSF. [not that means a big thing, but undoubtly is a thing to think.]

Re: Microsoft:

Anonymous's picture


The infamous

Anonymous's picture

"Although about 3 million computers get sold every year in China, but people don't pay for the software," he said. "Someday they will, though. As long as they are going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade."

Bill Gates, Microsoft
as quoted on CNET in 1998