The diplomatic mating dance is well underway in the runup to Hu
Jintao's visit to the US. Of course, from the Chinese point of view
this mating dance may never be quite consummated, due to the
refusal
of the White House to throw a full state-banquet for Hu. That hasn't
stopped China from ponying up $16.2 billion of commercial deals during
Vice Premier Wu Yi's
recent warmup visit in an attempt to douse some of Washington's protectionist fervor.
It has not escaped Imagethief's notice that Microsoft Chairman Bill the Gates is
throwing the private equivalent
of a state banquet for Hu at his megamansion outside Seattle. This
seems like an amazing coup for Microsoft, a company that has had
something of a resurgence in China over the past year or so, after
several bleak years in the Chinese wilderness (and, perhaps not
coincidentally, under the management of current Microsoft China CEO Tim
Chen).
In what seems like a move pointed in Microsoft's direction, China has
announced that it will ban the sale of "naked PCs", which are PCs sold
without an operating system. With the somewhat over-optimistic
headline, "Government ensures computers will use genuine software", the
People's Daily reports:
All the computers produced and sold in China must install authentic
operating system software, spokesman for the National Copyright
Administration Wang Ziqiang said yesterday.
Governments are especially required to purchase computers with genuine operating system software.
"As the operating system is necessary to a new computer, the
requirement at this time is specifically focussed on this type of
software," Wang said.
No detailed list was given regarding the type of operating system required for installation.
According to a notice issued by three relevant central
government departments, computer manufacturers and retailers that
install pirate software will be punished.
The government document also noted that operating system
software producers should provide a favourable price to computer
companies.
Wang predicted that the price of computers will not go up after the new policy is adopted.
Computer manufacturers and operating system software producers are required to report their sales to the Ministry of Information Industry every year in February.
Those who refuse to do so, or those who provide fake figures, will be exposed to the public.
As for government, various levels of departments were required
by another notice to establish a special fund on purchasing further
software besides the operating system.
"This is a measure to ensure that all software used on government computers is authentic," Wang said.
Those computers with trademarks normally install authentic
software, while most computers that are assembled by individuals do
not, according to the spokesman.
Three issues come to mind. First is enforcement. Making sure Founder or
Lenovo toes-the-line is easy, and they have incentive to cooperate
(especially fast-internationalizing Lenovo). Making sure tens of
thousands of DIY shops packing the enormous computer malls that litter
China's big cities will be much harder.
Second, I haven't read the actual legislation (and somehow doubt that
it would provide much more clarity), but I am curious how a "PC" is
defined. Given that a DIY PC can be sold in various states of
disassembly, at what point does it cease to be PC and become
parts? It's pretty easy to take a hard drive out and sell a
non-functional PC without hard drive and an accompanying but completely
separate hard drive bursting with pirated software. They're not
integrated into a unit (although they could be in three minutes), so
what does that mean by law? If the law isn't written so that the crime
is selling software illegally duplicated onto any hard drive, you might
never have a crime.
Third, and most important, is that "installing legal software" does not
necessarily mean "installing commercial software". I note this sentence
in the news story:
No detailed list was given regarding the type of operating system required for installation.
The problem, generally speaking, is that people in China want to run
Microsoft Windows but don't want to pay for it. Fly-by-night computer
shops are generally happy to install an unlicensed (ie. pirate) version
of Windows, or to sell you a "naked" PC and allow you to intall your
own pirate copy, purchased from the back-alley of your choice.
Imagethief's old consultancy in Singapore used to do PR work for the
Intellectual Property Office of Singapore. Among other things that
became obvious as we were working for them is that natural response of
your shady PC dealer to this kind of law is to install a free operating
system, such as any of dozens of Linux distributions. Everyone knows
that almost all buyers will immediately install a pirate copy of
Windows over the Linux, but the letter of the law has been satisfied.
Linux is free, but it is validly licensed under the GPL. The PC is not
naked. Net reduction in piracy: 0.0%.
Singapore's answer to that situation was to introduce end-user
criminalization, which is a fancy of way of saying, "We don't care how
the computer was sold to you, if it has an illegal operating system,
you are
criminally liable". This was a substantial change, since software
piracy had previously been only a civil offense, with criminal charges
reserved for pirate distributors and salesmen (the "big fish"). That
meant that while an aggrieved software manufacturer could sue end-users
pirating software, the state would not pursue a criminal prosecution.
And no software manufacturer wants to be seen as the heavy (for a
test-case in how this can go wrong, look at the
bad PR the Recording Industry Association of America got when it started suing teenage music downloaders).
So, China has introduced a law that looks, at first glance, like
complete PR prior to Hu's US visit. Of course, the devil is in the
details and we'll see how such a law might be implemented and enforced.
But, assuming it is enforced at all, I'd suggest looking out for a
Linux-loaded PC coming to a computer mall near you, with a pirated
Windows installation disk in the box along with the warranty card.
Disclosure: Imagethief is not a lawyer, but he is a computer
geek. When confronted with this kind of situation, he thinks, "how
would I, as a geek", try to get around it? This is, of course, a purely
academic mental exercise. Anyway, I use a Mac, which can't be bought
without an operating system.
Related: Silicon Hutong on Lenovo's premature discarding of the "IBM" brand, from this New York Times story.