For Immediate Release                Daytime contact: Alexa Moutevelis 202-467-5318
November 3, 2006                       After hours contact: Tom Finnigan 202-253-3852

CAGW Commends Microsoft-Novell Deal

Washington, D.C. - Citizens Against Government Waste (CAGW) today pointed to the collaboration between Microsoft and Novell as another reason to shun government intervention in the technology sector.  The companies struck a deal to improve interoperability between Microsoft Windows and Novell’s Linux operating system.

Microsoft and Novell are rivals in the corporate server software business.  Windows is proprietary and Novell’s SuSE Linux is open source, meaning its code can freely be modified and distributed by developers.

“The deal illustrates how the free market works to meet the demands of consumers,” CAGW President Tom Schatz said.  “This is further evidence that governments should stay out of the software design business, and that competition protects consumers and taxpayers.”

Microsoft said the move was a response to corporate customers that desired an easier mix of Microsoft and Linux technologies.  The deal ensures that SuSE Linux can operate together with Windows in corporate data centers, defends Novell from patent infringement suits from Microsoft, and protects both companies’ intellectual property.

“The agreement to share intellectual property stands in stark contrast to the effort by the European Commission to force Microsoft to share some of its trade secrets with competitors,” Schatz continued.  “The marketplace is the best venue for these issues to be resolved.  Regulation by litigation hurts taxpayers, stifles innovation, and threatens intellectual property rights.”

In July 2006 the European Commission (EC) hit Microsoft with an unprecedented fine of 280.5 million euros ($357 million), or 1.5 million euros per day, retroactive to December 15, 2005.  The fine was based on allegations that Microsoft was not disclosing and documenting Windows Server technology to rival companies.  An earlier EC directive forced Microsoft to create two versions of the Windows operating, one with its music and video program, Media Player, and one without.  There was virtually no demand for the unbundled version.  The EC is also examining Microsoft’s new Windows Vista operating system.

“As the software market evolves to meet the needs of consumers, the EC continues its baseless crusade against Microsoft.  The Bush Administration must reiterate to the EC that its actions hamper international trade and raise the cost of doing business everywhere,” Schatz concluded.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

###