June 20, 2004

Microsoft sues Brazilian magazine, IT official for defamation

Author: Fergus Cassidy

Microsoft Brazil has initiated legal proceedings against a magazine and a
senior government official, claiming the company has been defamed.

In a 7 June filing to
the Criminal Court of Sao Paulo, Microsoft said that "Sergio Amadeu,
President of the National Institute of Information Technology (ITI), aiming
at disseminating free software among Ministries, State owned companies and
governmental bodies, made aggressive declarations lacking any kind of
technical foundation about the use of the software developed by

The filing continues: "In defending free software, Mr. Amadeu does not
abstain from criticizing Microsoft, accusing the company of a 'drug-dealer
practice' for offering the operational system Windows to some governments
and city administration for digital inclusion programs.

"To Amadeu, this will be a decisive year to win the 'strategy of fear,
uncertainty and doubt,' as he classifies the business model of

"These declarations made by Mr. President of the ITI, beyond being absurd
and criminal, extrapolate prohibitions and violate duties inherent to the
public office the Defendant exercises."

Asserting that Amadeu's remarks are infringing speech under Article 25 of
the Press Law, Microsoft has demanded that Amadeu answer a list of
questions, mostly centred on the use of the phrase "drug dealer

Microsoft wants to know whether Amadeu spoke "about free software to the
Carta Capital magazine in an article published on 17 March 2004." And "has the defendant referred to the
attitude of the Plaintiff Microsoft as 'drug dealer practice'."

Microsoft also asks: "What does the expression proferred by the Defendant
'strategy of fear, uncertainty and doubt' referred in the article mean?"

Open source in Brazil

As President of the National Institute of Information Technology, Sergio
Amadeu has been one of the Brazil's foremost proponents of open source
software. The government is committed to open source as a political

"We are not opting for a product, we are opting for a software-use
development model. This is a political decision, and I cannot emphasize this
enough, based on an economic reason -- a reduction in the remittance of
royalties. It also expands Brazil's technological autonomy and strengthens
our collective intelligence," Amadeu remarked recently.

This adoption of open source means that Brazil is the biggest public
sector user of Linux in South America. Government targets are committed to
exporting around $2 billion worth in software every year; to replacing Windows
with Linux in 300,000 federal computers; to transferring $1 billion from the
Telecommunications Fund to the free software-based Digital Communications
System and to network the country's 200,000 public schools using open

Six government ministries are in the process of switching over to open
source, and by the end of next year it is planned that 40 percent of ministries will
be using open source. Cost savings are estimated at $5.8 million over five

Last week, IBM announced it was targeting the Brazilian enterprise IT market with
new offerings based on Linux. In its most recent quarterly report, IBM
identified Brazil as its hottest growth market in the Americas.

Brazil's drive for open source has led to an on-going war of words
between Microsoft and the government, which will now spill out again into
the courts.

Last month Microsoft was found not guilty by Brazil's antitrust
regulator of stifling software competition following a six-year
investigation. The case resulted from claims by Brazilian software house,
Paiva Piovesan, that Microsoft had harmed the competitiveness of one of its
financial programs.

Microsoft critical of government policy

Microsoft has not held back on its criticism. The company's president in
Brazil, Emilio Umeoka, has attacked the government's ideology. He told
Reuters recently: "If the country closes itself off again -- as it did when
it protected its information technology, 10 years from now we will wake up
and be dominant in something insignificant."

He also said the policy of the country's president, Luiz Inacio Lula da
Silva, was leading the country in the wrong direction: "The sectors,
ministries, and governments with which we have had dialogue we have managed
to work well with. Where we have encountered an approach much more
ideological, not based on the technical area, we fail to discuss
effectively. I don't know if this is the best way to attract investment into
the country. I know this is not the best way to create a base of development
from which to export, because there's no revenue from something free."

In response to the defamation filing by Microsoft, Sergio Amadeu -- the
president of the National Institute of Technology cited by the company in
its defamation allegations -- released a press
last Thursday.

He said the "judicial provocation imposed against me is, by its own, so
unusual and improper that it does not deserve any answer. On the other hand,
I'd like to register that the purchase of software that preserves the values
of openness and freedom is, for the Brazilian government, a subject
unavoidably connected to the democratic principle." He ended his statement
with "The future is free."

A support campaign has been launched by Softwarelivre

Fergus Cassidy is a technology writer with the Sunday Tribune.


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