Techdirt. Stories about "microsoft"

Chinese Hacks Of Google Database Of Surveillance Targets Highlight How Dumb Technology Backdoors Are

Mike Masnick — Wed, 22 May 2013 14:24:41 PDT

We've argued for quite some time that law enforcement's desire to require backdoors for wiretapping in all electronic communications is really dumb, because it won't just be law enforcement using it (and, when they use it, it won't just be for legitimate purposes). As soon as you have that backdoor in place, you've pretty much guaranteed that it becomes something of a target. And the news that broke earlier this week about how Chinese hackers who broke into Google servers a few years ago were targeting their database of which accounts had been flagged for national security surveillance makes this point that much clearer. The people doing this kind of hacking aren't dumb: they know that there are weaknesses where they can probe. A few weeks back, a Microsoft exec had actually revealed that their own analysis of similar attacks on Microsoft's servers from China showed the same basic target and discussed the serious implications.

"What we found was the attackers were actually looking for the accounts that we had lawful wiretap orders on," Aucsmith says. "So if you think about this, this is brilliant counter-intelligence. You have two choices: If you want to find out if your agents, if you will, have been discovered, you can try to break into the FBI to find out that way. Presumably that's difficult. Or you can break into the people that the courts have served paper on and see if you can find it that way. That's essentially what we think they were trolling for, at least in our case."

The more openings and the more data that is shared, the more openings and opportunities there are for people who you don't want to see that data to have access to it. That should be a major concern. Just before all of this was revealed, we had written about a new report how such backdoors basically destroy any competent attempt at cybersecurity. Julian Sanchez highlights how those who think this isn't a problem are almost certainly confused about how computer security works.

Defenders of the FBI proposal tend to pooh-pooh security concerns raised about requirisng such backdoors: Our brilliant American programmers, they assert, will find ways to enable wiretapping without creating new vulnerabilities. But if a company like Google, with its massive financial resources and a stable of some of the smartest coders anywhere, can be victimized in this way, how realistic is it to expect thousands of Internet startups to achieve better security?

Creating more access to information that should be secret might help law enforcement, at the expense of our civil liberties, but it's also going to help those with nefarious intent quite a bit. And that should be a serious concern.

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Google's Attempt To Bully Microsoft Back With Patents Not Going Too Well

Mike Masnick — Mon, 29 Apr 2013 07:09:00 PDT

Ever since Google decided to stick with Motorola Mobility's existing patent fights with various companies, I've been wondering why they did so. Here was a chance for Google to take the high road and actually live up to what it had been claiming concerning the problems of patents. But, instead, it's basically continued to try to use patents as a weapon. The fight against Microsoft has been particularly silly. While Microsoft did initiate things, Motorola's decision to fight back had seemed dubious from the start. Being a patent bully is no way to run a long-term business, and that's doubly true when you're a company telling people how broken the patent system really is.

And yet, Motorola Mobility pushed on against Microsoft... and it's not going well. On Friday, a judge knocked the damages down to next to nothing, basically siding with Microsoft. Microsoft had argued that if there were any infringement, the amount owed should be about $1.2 million. Motorola Mobility had argued for... $4 billion. The judge came down at just $1.8 million.

I recognize, of course, that the whole reason that Google bought Motorola Mobility was to get access to these patents. And, on top of that, Microsoft did strike first here. However, Motorola Mobility had hit back quite strongly, and even once Google was in control, it seemed to have little interest in pulling back. The whole thing makes Google look a bit hypocritical, and it certainly hasn't helped the company win any of these legal battles.

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Documentary On The History Of Apple And Microsoft Show It Was All About Copying, Not Patents

Mike Masnick — Fri, 12 Apr 2013 19:39:00 PDT

We recently posted about an absolutely ridiculous NY Times op-ed piece in which Pat Choate argued both that patent laws have been getting weaker, and that if we had today's patent laws in the 1970s that Apple and Microsoft wouldn't have survived since bigger companies would just copy what they were doing and put them out of business. We noted that this was completely laughable to anyone who knew the actual history. A day or so ago, someone (and forgive me, because I can no longer find the tweet) pointed me on Twitter to a 45 minute excerpt from a documentary about the early days of Microsoft and Apple and it's worth watching just to show how laughably wrong Choate obviously is. There are two key themes that stand out incredibly strongly in this: both Microsoft and Apple did an awful lot of what they did by shamelessly copying the work of others, and the big companies floating around the space (mainly IBM and Xerox) clearly had no clue at all about what was going on. The few times they discovered interesting things, they didn't know what to do with them, and let Microsoft and Apple walk all over them to build something better that people wanted. And when they tried to jump into these markets by copying the work of Apple and Microsoft, they tended to do a really bad job of it. On the copying front, while most people are familiar with Apple copying the GUI from Xerox, less well known is the story of Tim Patterson at Seattle Computer Products reverse engineering CP/M based on understanding CP/M's APIs to create the early versions of DOS that Microsoft licensed to IBM.

Also noteworthy: no discussion of patents at all. At the very end of the clip there's a bit of a discussion from former Apple CEO John Sculley concerning Apple's legal fight with Microsoft over the look and feel of the GUI. He mentions there was nothing patentable, but that they felt it was a copyright violation. However, he also notes that Apple's strong belief that they could stop Microsoft via copyright also led to complacency within Apple, and less focus on competing by innovation.

In other words, the claims Choate makes are laughable. There was little to no reliance on patents during the early days, and a very strong culture of copying anything and everything, while competing by trying to out-innovate each other. Furthermore, big companies couldn't figure out what was going on, even if they wanted to copy these successful upstarts. At one point, Larry Ellison jokes about how IBM stupidly ceded the chip market to Intel and the OS/application market to Microsoft when it could have owned it all.

One point about the video. The YouTube link says this is from the "documentary" Pirates of Silicon Valley. That's incorrect. If I remember correctly, Pirates of Silicon Valley was actually a "TV movie" based on the same subject material, with Noah Wylie playing Steve Jobs and Anthony Michael Hall playing Bill Gates. Instead, I'm pretty sure that the clips are actually from the documentary Triumph of the Nerds, put together and narrated by Mark Stephens, who is better known as Robert X. Cringely (there's another interesting historical story about the legal fight over the Cringely name, but that's a totally different tangent). This documentary actually came out in 1996, so it's interesting to see how it mostly predates the internet (though there is some discussion of the internet), Jobs' return to Apple and a variety of other things that happened over the past 15 years. Either way, it should put to rest Choate's silly claims.

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Google Competitors File Ridiculous EU Complaint Arguing That 'Free' Android Is Anti-Competitive

Mike Masnick — Tue, 9 Apr 2013 09:22:50 PDT

FairSearch, the increasingly silly and shrill looking "coalition" of tech companies which have nothing in common other than a visceral hatred for Google (it's led by Microsoft) has so far failed miserably in convincing regulators that Google was an antitrust problem. Now it's filed a new attack on Google in the EU, arguing that its Android mobile strategy is anti-competitive because it gives Android away for free.

“Google is using its Android mobile operating system as a ‘Trojan Horse’ to deceive partners, monopolize the mobile marketplace, and control consumer data,” said Thomas Vinje, Brussels-based counsel to the FairSearch coalition. “We are asking the Commission to move quickly and decisively to protect competition and innovation in this critical market. Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google’s Android operating system.”

[....] Google achieved its dominance in the smartphone operating system market by giving Android to device-makers for ‘free.’

What's especially ridiculous here is that Microsoft, who is the major source behind FairSearch, dealt with this exact issue itself back during its antitrust fights, when people ridiculously accused it of the same thing for daring to give out Internet Explorer for "free." The idea that giving away some software for free is somehow anti-competitive is just laughable. That this is now being pushed by a bunch of companies who themselves use the exact same benefits of giving away free software to promote other parts of their business is just the height of cynical exploitation of the political process to try to hamstring a competitor in red tape, rather than competing in the marketplace.

Law Professor James Grimmelman, who is hardly a big Google supporter (he was among those who fought the hardest against the Google Books settlement) properly called this new filing by FairSearch "disgusting." It's a blatantly cynical attempt by Microsoft, Nokia, Expedia, TripAdvisor and Oracle to use a totally bogus legal complaint to just waste a competitor's time. All of those companies rely on free software in some form or another. No one in their right mind argues that offering free software is somehow anti-competitive. It seems that FairSearch has now reached hysterical desperation as it attempts to justify itself.

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Microsoft Creative Director Defends Always-Online, Insults Customers, Murders Logic...All In One Day!

Timothy Geigner — Fri, 5 Apr 2013 13:45:00 PDT

Remember that whole SimCity thing, where the always online requirement of the game turned into launch failures, massive backlash, and caused EA/Maxis to lie like it was their job? Yeah, good times. It was almost as if the whole debacle was some kind of how-not-to-do-video-games piece of performance art. Well, the good news is that everyone in the video game industry has learned their lesson, realizing that they need to treat their customers with respect and understand that their demands fuel sales, which means not including requirements they don't want. Yup, they all get it now. We won.

Hint: If all of you aren't laughing like this by now, your sarcasm detector needs tuning
Image source: CC BY-SA 2.0

Just kidding! You see, amid heavy speculation that the next Xbox from Microsoft will require some form of always-online component, Microsoft's Creative Director Adam Orth decided now was the time to head to Twitter for what appears to be an "insulting customers and forgetting logic" incantation that I can only imagine is intended to Bloody Mary his career. Let me first stress two things: the rumors about the Xbox are not confirmed, and Orth does not make mention of the Xbox specifically. Instead, Orth tweeted:

"Sorry, I don't get the drama around having an "always on" console. Every device is "always on". That's the world we live in. #dealwithit"

Except that isn't true, of course. My iPad isn't always online. Neither is my phone. Or, hell, my damned computer. In fact, come to think of it, this side of a couple of poorly thought-out pieces of gaming software, I don't know that I own a single device that is required to always be online. And what about potential customers that might not have access to reliable internet connections? Or might not have connections at all? Well, according to Orth:

"Those people should definitely get with the times and get the internet. It's awesome."

It's hard to imagine a more out of touch dismissal of a reasonable question. There are people who, for a variety of reasons, don't have reliable connections. Broadband penetration in the United States is pretty wide, but in terms of speed and reliability we're well behind the rest of the industrialized world, 15th out of 30 in penetration and 26th globally in terms of speed. And that doesn't even take into account less common circumstances, such as those serving abroad that might not have access to the internet for a host of reasons. You're simply telling them to "get with the times?"

But if you thought that was bad, Orth then goes completely off the logic rails in what he thinks is a rebuttal to shoddy internet connections.

"Sometimes the electricity goes out. I will not purchase a vacuum cleaner. The mobile reception in the area I live in is spotty and unreliable. I will not buy a mobile phone."

This is where I get really, really pissed off. If you want an always online system and if you want to dismiss part of a potential customer base in the process, go ahead. I don't think it's smart, but it's your business, do what you want. But when you start filling my eyes with bullshit like the above, you've gone too far. See, the thing is that a vacuum cleaner isn't a device that could run without electricity but was designed to not work unless it had it. Always electrified isn't a choice for vacuum cleaners. And with spotty mobile coverage, guess what, sir? If I couldn't use the damned phone due to crappy coverage, you're damned right I wouldn't spend the money on the phone. Who would? But even so, the very nature of the phone requires coverage. It isn't a manufacturer choice, it's the nature of the device. Game consoles, most software, and a host of other technology products, on the other hand, opt in to always-online. Pretending those analogies are the same is a further insult to your consumers, who you must think are too stupid to know better.

So, to recap simply, we don't know if the new Xbox will have an always-online requirement, but we do know that Microsoft has a real problem at the head of one of its departments. Perhaps someone should explain to Adam Orth that insulting customers isn't the best way to do business. Personally, I'd like to see that explanation written on the back of his termination papers.

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Author Claims That If Apple And Microsoft Started Today They'd Fail Without Stronger Patent Protection

Mike Masnick — Wed, 3 Apr 2013 10:00:31 PDT

The NY Times has a slightly odd op-ed piece, written by Eamonn Fingleton, author of a book about how China is going to dominate the US economically. That may absolutely be true, but this oped tries to bend over backwards to prove that China will be more innovative than the US... and uses patents as a proxy:

Meanwhile the evidence of international patent filings is looking increasingly ominous. According to data compiled by the World Intellectual Property Organization, the world’s single most prolific filer of international patents as of 2011 was ZTE, a Chinese telecommunications corporation. Its filings were up an astounding fivefold from 2009. Another Chinese corporation, Huawei, moved up to third in the 2011 league table. The only United States corporation to make the Top 10 was Qualcomm.

First of all, the number of patents filed is meaningless. You can file a ton of patents and it means absolutely nothing concerning innovation. First off, applications are different from granted patents. Second, and more importantly, patents show no relation to innovation. Third, when it comes to Chinese patents, the Chinese realized long ago that patents are merely a tool for protectionist tariff-like policies that can be enacted with less scrutiny or trade war issues and have acted accordingly. Basically, nothing in the paragraph above actually supports Fingleton's argument.

But, then it gets much, much worse. He claims that the US somehow has a weaker patent system today than in the past (it doesn't) and then quotes another author claiming that Apple and Microsoft relied on strong patents to survive when they started out:

All this is the more troubling because United States patent law has now been drastically weakened. Congress has made it much harder for small American inventors to protect their intellectual property from infringement and theft.

Pat Choate, the author of “Hot Property,” a book on the theft of intellectual property, maintains that if the new patent regimen had existed when corporations like Apple and Microsoft first got going, they might never have made it out of the little leagues. Their patents would have been quickly infringed by predatory larger corporations, and rather than engage in unequal litigation battles against deep-pocketed and ruthless opponents, they could have felt forced to share their technology on concessionary terms.

Almost nothing in what's said above has any resemblance in the truth. The patent system hasn't been "drastically weakened" at all. Congress made some slight modifications to the patent system, which do nothing to make it harder for "small inventors to protect their intellectual property from infringement and theft."

As for the claims made by Pat Choate, I'm just left shaking my head. First of all, both of Apple and Microsoft's key success stories came from copying the works of other, larger companies when those companies failed to recognize what they had on their hands, and more or less let the upstarts take those ideas and run with them. Also, in both cases, other, larger companies did come in and try to copy them, and weren't that successful. Also, more importantly, neither company aggressively relied on patents to protect its works. Bill Gates famousely said the following about patents:

If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today. I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique. If we assume this company has no need of any of our patents then the have a 17-year right to take as much of our profits as they want.

Not exactly an example of Microsoft using patents to protect itself, but rather quite the opposite. Apple, in the meantime, relied heavily on ideas from Xerox and SRI in making its early computers -- some of which it licensed, and some of which it did not. However, much of the work was not heavily patented and while Apple received some early patents, it did little to enforce those patents to stop copycats (its most famous lawsuit, against Microsoft for copying the Windows interface, focused on copyright... and it failed, anyway).

You could easily argue that if Microsoft and Apple were started today they would absolutely be harmed by today's patent system, but not in the way that Choate or Fingleton suggest. Rather, they would be sued by trolls over and over and over again, meaning they'd be wasting money fighting lawsuits, and possibly wouldn't be able to survive that. What they needed to survive was an era in which patent enforcement was not common and especially one where patents were considered inapplicable to software.

Microsoft and Apple became massive success stories in part because of the weakness of the patent system in their era, because patents don't help innovation, they put a tollbooth on it. This article certainly puts a huge question mark over the quality of both Choate and Fingleton's work, as it shows little actual knowledge of the subject they're discussing.

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Microsoft Releases Details Of Law Enforcement Requests

Mike Masnick — Fri, 22 Mar 2013 16:24:34 PDT

Kudos to Microsoft for joining companies like Google and Twitter in releasing transparency reports about government/law enforcement requests for information. On Thursday, Microsoft released data on law enforcement requests from 2012. The report covers requests for pretty much all of Microsoft's key online services, including Hotmail/Outlook, SkyDrive, XBox Live, Office 365 and even Skype. Microsoft has actually gone a step further than others in some areas, such as separating out which law enforcement requests involved sharing "customer content" data (such as images or email subject lines) vs. those that shared "non-content" data (such as identifying information).

Because of this distinction, Microsoft points out how rarely it ends up giving law enforcement customer content, noting it happened in only 2.1% of cases (1,558 requests). Nearly all of those requests came from the US government. The only non-US requests that resulted in the sharing of customer content were 14 disclosures given to Brazil, Ireland, Canada and New Zealand.

As for non-content information (i.e., identifying info), Microsoft disclosed that information 56,388 times (excluding Skype, which reported its data separately due to differences in the way they recorded data -- something that is being standardized). The top countries getting such info were the US, UK, Turkey, Germany and France. Turkey seems a bit surprising there. As for Skype, the top requests were from the UK, US, Germany, France and Taiwan. Microsoft also delivered no information at all 18% of the time, either because the company rejected the request or because no info was found, though they apparently don't break down the difference there.

Like Google, Microsoft also revealed how many National Security Letters it received, using a format nearly identical to the way Google released its data not too long ago: It's good to see Microsoft following in the footsteps of Google and Twitter in providing this kind of transparency. Hopefully we'll see even more companies follow as well.

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Facebook Backs Away Quietly From Its CISPA Support

Mike Masnick — Thu, 14 Mar 2013 15:08:57 PDT

Many in the internet community were disappointed a year ago when Facebook came out in favor of CISPA. Facebook made its case publicly, agreeing that there were some privacy and civil liberties concerns with the bill, but that on the whole the bill was good. Of course, more cynical people might point out that since the general immunity provisions of CISPA would protect Facebook from liability in sharing info with the government, that of course they'd like it. However, it appears that Facebook is reconsidering that position, perhaps aware of how much public opposition there is to CISPA. Facebook is no longer listed as a CISPA supporter, though it also has not come out directly against the bill. Instead, it issued a statement that says basically nothing:

We are encouraged by the continued attention of Congress to this important issue and we look forward to working with both the House and the Senate to find a legislative balance that promotes government sharing of cyberthreat information with the private sector while also ensuring the privacy of our users.

Still, it's encouraging that a company, like Facebook, which really does rely on the support of their userbase, appears to at least recognize that something like CISPA might not be good for its users. In fact, this seems similar to when Microsoft backed away from its CISPA support last year as well. The article linked above notes that Microsoft still feels the same way, citing the concerns about user privacy with the current draft of CISPA.

So, who is supporting CISPA? The telcos are still there, not surprisingly, as well as mostly infrastructure providers, rather than any company that has a bunch of its own internet users. So, you see IBM, Intel and Juniper Networks. But there is not a single real "internet" company in the bunch any more. Perhaps that should be a loud hint for CISPA's sponsors that the bill is not a good thing for the internet world.

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Innovators Break Stuff, Including The Rules: How Gates, Jobs & Zuckerberg Could Have Been Targeted Like Aaron Swartz

Mike Masnick — Tue, 12 Mar 2013 09:50:28 PDT

In a conversation with some folks in the tech industry recently, someone pointed out that nearly every super famous entrepreneur likely could have, at some point, been legitimately accused of violating the Computer Fraud and Abuse Act (CFAA), which is the law that prosecutors used against Aaron Swartz, and is in desperate need of an overhaul. Over at the EFF, Trevor Timm has a great post exploring how Steve Jobs, Bill Gates and Mark Zuckerberg all might have faced charges under the CFAA. You should read the whole thing, but here are a few snippets:

On Zuckerberg:

In 2006, while a sophomore at Harvard, Zuckerberg created a website called “Facemash” which compared photographs of Harvard’s entire population, asking users to compare two photos and vote on who looked better. Zuckerberg allegedly got access to these photos by “hacking” into each of Harvard’s nine House websites and then collecting them all on one site. It’s not clear what this “hacking” was, but since the charges against him included “breaching security,” it may have fun afoul of the law.

On Jobs:

Columbia Law Professor Tim Wu notes in the New Yorker that Apple co-founders Steve Jobs and Steve Wozniak, did acts that were “more economically damaging than, Swartz’s.” The two college roommates made what were called “blue boxes,” cheap devices that mimicked a certain frequency that allowed them to trick AT&T’s telephone system into making free long-distance calls. They also sold blue boxes before moving onto bigger and better ideas.

On Gates:

In his autobiography, Allen told the story of when the two future billionaires “got hold of” an administrator password at the company they worked at before starting Microsoft. The company had timeshared computers and Allen and Gates were getting charged for using them for their personal work.

The two men used the password to access the company's accounts and set about trying to find a free runtime account so that they could carry on programming without having to pay for the time. They also copied the account database for later perusal. However, management got wise to the plan.
"We hoped we'd get let off with a slap on the wrist, considering we hadn't done anything yet. But then the stern man said it could be 'criminal' to manipulate a commercial account. Bill and I were almost quivering."

Of course, defenders of the existing law will argue that these episodes are entirely unrelated to the later greatness that all three of these folks were eventually involved in. But that's not actually supported by the facts. Facesmash almost certainly directly led Zuckerberg to Facebook. And, in the case of Steve Jobs, he specifically told an interviewer:

“Experiences like that taught us the power of ideas…And if we hadn’t have made blue boxes, there would’ve been no Apple.”

Innovators innovate because they hack away at stuff. They push boundaries and they try new things to explore uncharted worlds. Do we really want to be punishing people like that with threats of 35 years in jail? (And, yes, the government absolutely did threaten him with 35 years.)

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If Microsoft Shuts Down Google Maps In Germany, How Does That Benefit The Public?

Glyn Moody — Tue, 12 Mar 2013 08:47:28 PDT

Most sane human beings have stopped trying to keep up with the interwined legal actions arising out of the smartphone patent wars between Apple, Google, Motorola, Nokia, Microsoft and all the rest. The cases, though, are still grinding through the courts, which periodically throw out their verdicts. According to Florian Mueller, one such decision in Germany is imminent:

Judge Dr. Matthias Zigann of the Munich I Regional Court just told Google and its Motorola Mobility subsidiary in no uncertain terms that his court is at this point (prior to counsel's argument on claim construction, infringement and validity) inclined to hold Google Inc., its subsidiary Motorola Mobility LLC and MMI's German subsidiary liable for infringement of a key Microsoft patent, EP0845124 on a "computer system for identifying local resources and method therefor", which is the European equivalent of U.S. Patent No. 6,240,360.

Here's that EPO patent: A map of the area of a client computer (10) is requested from a map server (11). Information relating to a place of interest is requested from an information server (12) by the client computer (10). The information is superimposed or overlaid on a map image at a position on the map image corresponding to the location of the place of interest on the map. The information (or "overlay") server (12) may contain details of, for example, hotels, restaurants, shops or the like, associated with the geographical coordinates of each location. The map server (11) contains map data, including coordinate data representing the spatial coordinates of at least one point on the area represented by the map.
As the claims make clear, it's exactly what any half-way competent engineer would come up with given the task of providing certain kinds of information local to a geographical location. Moreover, it is of course implemented in software; given that Article 52 of the European Patent Convention explicitly excludes "programs for computers" from patentability, the fact that the EPO granted a patent here is an early example of how it circumvented that exclusion because a computer was used to run that software (well, doh.)

There's another problem with the patent, as Mueller's post makes clear:

Microsoft is seeking, and now very likely to obtain, a German patent injunction against the Google Maps service, the Google Maps Android client app, and web browsers providing access to Google Maps. In order to comply with the injunction that looms large, Google would have to disable access to Google Maps from computers using a German IP address, discontinue shipping the Google Maps Android app in the German market, and distribute web browsers in Germany only if they block access to Google Maps in a way comparable to Internet filters used for the purpose of parental controls.

If that turns out to be the case, and Google isn't able to code around the problem, that means that the patent was ridiculously over-broad -- essentially, it's a patent on all implementations of the basic idea. That's unlike traditional patents, where alternative, non-infringing inventions can be devised to solve a given problem.

Moreover, Microsoft can't fall back on its usual justification that it spent years of research and huge amounts of money developing this "breakthrough" idea, and therefore deserves its sweeping monopoly. According to both the European and US filings, the original patent was granted to Sean Phelan, based in London. Here's the background:

Sean started Multimap.com as a bootstrap start-up in his spare bedroom in 1995 and built it into one of the 10 most popular British web services, with revenues of £12M and profits of £1M

Sean formed Multimap.com to bring together his lifelong love of sailing and navigation with his experience with the internet and web-based technology. Through Multimap, Sean realised his vision of services based on the integration of navigation, wireless communications and the web. He is one of Europe's original internet entrepreneurs, with a unique combination of business and technical skills. In December 2007 the company was acquired by Microsoft for £30 million, cementing its position in the ranks of Britain's internet success stories.

And good for him. But buying his patent doesn't give Microsoft -- or anyone -- the right to lock out competitors from the entire online map space. If Mueller is right, and a broad injunction is granted against Google Maps, the net result will be millions of Germans unable to use this popular service in a Web browser or on their smartphones. In what way does that benefit society or promote innovation?

Follow me @glynmoody on Twitter or identi.ca, and on Google+

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Microsoft: Just Kidding, You Can Transfer Licenses For Your Retail Versions Of Office

Timothy Geigner — Thu, 7 Mar 2013 08:43:42 PST

A few weeks back, I wrote a piece about how Microsoft was changing the licensing terms for the retail versions of its Office product so that it would be a single install license. As I mentioned in that piece, this seemed like a pretty clear attempt to get retail customers to move to MIcrosoft's Office 365 line, requiring an ongoing subscription. Otherwise, retail customers would be beholden to their PCs, left to buy a new copy of Office should that machine no longer function (especially so if that machine wasn't under warranty). Customers, to put it mildly, were not impressed.

And it was that customer feedback that has apparently prompted Microsoft to revert the Office 2013 retail products back to the traditional, transferable licensing arrangement.

Based on customer feedback we have changed the Office 2013 retail license agreement to allow customers to transfer the software from one computer to another. This means customers can transfer Office 2013 to a different computer if their device fails or they get a new one. Previously, customers could only transfer their Office 2013 software to a new device if their PC failed under warranty.

While it's nice that Microsoft ended up listening to their customers, some folks are noting that these sneaky kinds of licensing attempts are nothing new for the company.

By the way, if all this seems familiar, it’s not your imagination. Microsoft tried a similar tactic with Windows Vista in October 2006. The original license agreement imposed a new limit of one transfer on retail copies of Windows. At the time, I called it “a sneaky change in Windows licensing terms.” After a similar outcry from Microsoft customers (a Microsoft executive acknowledged having received "lots of e-mail and other feedback" on this issue), Microsoft rolled back the changes and restored the original license terms less than a month later.

This trend should be a lesson to Microsoft, as well as other technology companies. If you want to get customers to adopt a certain product line you have, do it by making that product more valuable, rather than by reducing the value of a competing product.

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Microsoft Makes Retail Versions Of Office Single Install

Timothy Geigner — Thu, 14 Feb 2013 13:53:55 PST

Microsoft, long-standing hater of piracy, appears to have decided to step up their targeting system to place their own customers directly in their crosshairs. Your immediate reaction may be to blast the previous sentence as hyperbole, but you would be wrong to do so. Nothing else can explain what they are doing with their Microsoft Office 2013 retail software, which is to make it a single install license that is forever tied to one machine.

With the launch of Office 2013 Microsoft has seen fit to upgrade the terms of the license agreement, and it's not in favor of the end user. It seems installing a copy of the latest version of Microsoft's Office suite of apps ties it to a single machine. For life.

What does that mean in real terms? It means if your machine dies or you upgrade to a new computer you cannot take a copy of Office 2013 with you to new hardware. You will need to purchase another copy, which again will be tied to the machine it is installed upon forever.

For those of you who might not know, this is a completely new way of handling retail versions of Microsoft Office. Previous iterations still limited installs to a single user, but you had the ability to put the software on multiple machines. The reason that's necessary should be obvious, in how common it is for users within homes and offices to switch to new computers over a 3 or 4 year timespan. Most companies have a rotation process that could be murdered by this, assuming all of their users don't need the same version of Office (there are 3 different flavors), not to mention what happens when the PC you've had for two years does the system board dance of death, forcing you to replace it. In either scenario, retail buyers get to buy a whole new boxed product of Office, which costs anywhere between $100 and $400, again depending on the version. All of this, by the way, has been confirmed by Adam Turner of The Age.

Now, I realize not everyone works for a reseller like I do, so let me explain why this will universally piss everyone off and drive customers away from Microsoft Office entirely. We already mentioned the problems for the user above. In addition, while most sizeable companies traditionally have gone the Open Licensing route (which doesn't have install restrictions), small businesses often don't. Those small businesses number in the too-many-to-accurately-assess-ions, which means that instead of moving towards licensing or Office 365 (the likely goal of Microsoft) many customers may begin to explore alternatives, such as Google Docs, Open Office, and Libre Office. Not only would that cut into Microsoft's market share, but it could open a lot of eyes to those alternatives universally, which may then represent a threat to Microsoft's enterprise customers. I wouldn't suggest that most or even many larger companies would switch to one of the other suites, but market share certainly matters.

So, way to go Microsoft. You've made one of your most popular products more expensive and less useful at the same time, all because you want to push customers to Office 365. Which, were it compelling on its own merits, customers would be doing anyway.

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Some Dell Shareholders Don't Know Much About This Leveraged Buyout, But They Know They Don't Like It

Dealbreaker — Thu, 7 Feb 2013 19:05:00 PST

Cross-posted from

The Dell deal documents are out and they are short of juicy details; we'll have to wait for the proxy for details on things like just how much of a discount Michael Dell is taking on his shares or what exactly the terms of Microsoft's loan are. There is, though, the information that that loan will take the form of $2 billion of subordinated debt, and that the total cash equity investments from Silver Lake, Michael Dell and MSD will total $2.25bn. This seems pretty sensible; Microsoft is effectively writing half of the equity check, though for a fixed-but-subordinated return, plus emotional benefits or what have you. And if you're worried about how easily debt markets will swallow some $3.25bn of bonds, $5.5bn of Term B/C, and billions of assorted other secured financing,¹ which with $4bn of existing bonds brings Dell to around 4x total leverage, making $2 billion – almost half a turn – of the debt subordinated, long-term, and emotionally committed can’t hurt.

But for most of the fun stuff we’ll have to look forward to the proxy. And that isn't good enough for some people. Reuters reports that the first shareholder lawsuit over the deal has already been filed, one day after announcement, which I assume means it was in the works before the deal was announced. This sort of amazed me:

Some shareholders said they were angered by the lack of specifics about the deal, making it hard for them to determine if the price was fair. The company, which declined to comment on the lawsuit, had said the board had conducted an extensive review of its strategic options before agreeing to the buyout.

I would characterize myself as mildly saddened by the lack of specifics, but that's why I will wait until the proxy is out and then read the specifics. You know there's a whole section of the proxy explaining why the bankers thought the deal was fair, right?²

There’s nothing new here – as Reuters notes, "Almost every merger worth more $100 million prompts a shareholder lawsuit" -- but the speed continues to amaze. And it's becoming ever more a fact of life:

That’s from this depressing report, which also has a sad-comical list of 16 deals each with 15 or more lawsuits filed. (The tech industry averages 4.9 suits, so, y'know, look out for 3.9 more.)

You can sympathize a little. Management buyouts are of course all about bottom-ticking the stock price; management would be pretty dumb if they took the company private at its all-time high. Dell's various stakeholder communications -- all to the tune of "this will is the start of a whole new chapter for Dell, in which everything will remain exactly the same" -- make that pretty clear: the deal has little to do with operational changes and much to do with the fact that Michael Dell thinks that (1) Dell and (2) debt are both cheap right now.

But that's kind of the market, and the fact of life is that if shareholders think that $13.65 is too cheap for their shares, they can always vote the deal down. By all accounts this deal was pretty fully negotiated, so it seems unlikely that the lawsuit will reveal that Dell and Silver Lake would have coughed up an extra $1 a share if the board had just asked more aggressively. And it's no secret that Michael Dell thinks that his company is worth more than $13.65. Even if that hasn't been specifically disclosed yet.

Dell 8-K, Merger Agreement, Voting Agreement [EDGAR]
Dell Buyout Broken Down: Silver Lake Puts in $1.4 Billion [Deal Journal]
Dell Aims for Double-B Rating, Leverage Less Than 4x Ebitda [Deal Journal]
Dell investor sues to block founder’s leveraged buyout [Reuters]
Reasons to Be Suspicious of Buyouts Led by Management [DealBook]
Dell’s Talks Said to Break Up a Few Times Over Pricing [Bloomberg]

1. From the 8-K:

Each of Bank of America, N.A., Barclays Bank PLC, Credit Suisse AG and Royal Bank of Canada and, in some cases, certain of their affiliates (collectively, the “Lenders”) have committed to provide debt financing for the transaction, consisting of a $4 billion senior secured term loan B facility, a $1.5 billion senior secured term loan C facility, a $2 billion ABL facility, senior secured interim loan facilities consisting of a $2 billion first lien bridge loan facility and a $1.25 billion second lien bridge loan facility (or, alternatively, senior secured first lien and second lien fixed rate notes that would be issued in a high-yield offering pursuant to Rule 144A under the Securities Act of 1933), a $1.9 billion term commercial receivables financing facility and a $1.1 billion revolving consumer receivables financing facility, each on the terms and subject to the conditions set forth in a commitment letter dated as of February 5, 2013 (the "Debt Commitment Letter").

2. The answer is always along the lines of "because you paid us to think that," but still.

Other posts from Dealbreaker:

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Microsoft Sued Because It Overloaded Surface Tablet With Pre-Installed Apps

Mike Masnick — Thu, 15 Nov 2012 07:23:24 PST

Recently, people noticed that -- in classic Microsoft fashion -- its new 32GB Microsoft Surface tablet only had 16GB of free storage when you took it out of the box. Why? Because this is Microsoft and it loaded the damn thing down with pre-installed software that took up a ton of storage (including, of course, its own bloated tablet operating system, Windows RT). Competing tablets, including the iPad and various Android tablets, come with significantly more free space, even on models advertised as having the same storage. Microsoft has tried to play up the value of the pre-installed software, the fact that you can expand storage via a microSDXC card slot and that it offers 7GB of free "cloud" storage with the device. And, oh yes, you can also manually delete stuff and get back some space.

None of this was enough for one guy, however, as Andrew Sokolowski is now suing Microsoft claiming that Microsoft is misrepresenting the device. While he's seeking class action status, unlike many class action lawsuits that are all about money, it's actually nice to see that he's not seeking any money -- just asking Microsoft to stop misrepresenting the product.

I can't find the actual lawsuit on PACER yet, though I imagine it'll be up soon. On the whole, while I find it incredible (and so typically Microsoft) that Microsoft is selling the tablet loaded down with so much software, does that really require a legal response? The story is getting out in the press, and people must know that at least some of the tablets they buy have pre-installed apps on them. It seems like a situation where an informed consumer is likely to know that this is one of the downsides of buying the Surface, and it's not clear that Microsoft needs to be legally compelled to explain how much free space is on the device out of the box.

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Copyright Maximalism: Turning Satirical Works Into Ridiculous Reality

Tim Cushing — Tue, 13 Nov 2012 16:39:43 PST

Last week, we discussed Microsoft's patent filing on a content distribution system that counted heads and charged license fees accordingly. Utilizing the Kinect or some other unnamed technology, Microsoft had the beginnings of the copyright industries' wildest dreams: an opportunity to treat the public's living rooms like theaters and collect "admission" from every viewer.

Rick Falkvinge has amusingly pointed out that "prior art" exists for this "Content Distribution Regulator" -- in the form of a satirical piece published at BBspot (and covered here years ago, noting that it "hit too close to home") five years before Microsoft's filing.

Six years ago, a satire site wrote a story about how the copyright industry wanted more money if you invited friends to watch a movie in your living room. This notion has now been patented in new technology: automated headcounts coming to a living room near you, to enable new forms of restrictions. Apparently, the copyright industry takes six years to catch up with the very worst satire of it.

The satirical piece Falkvinge quotes deals with the MPAA trying to push through a bill that would allow it to take control of people's living rooms and treat them like theaters.

The MPAA is lobbying congress to push through a new bill that would make unauthorized home theaters illegal. The group feels that all theaters should be sanctioned, whether they be commercial settings or at home.

This paragraph in particular is eerily prescient:

The bill would require that any hardware manufactured in the future contain technology that tells the MPAA directly of what is being shown and specific details on the audience. The data would be gathered using various motion sensors and biometric technology.

Sounds exactly like Microsoft's idea, doesn't it? In fact, it sounds close enough that you could argue that it should invalidate the patent in question. Either way, there's no way the MPAA isn't hoping this comes to fruition. Sure, money can be made by producing new movies but it's so much simpler to charge people over and over for the same item. Various format changes over the years have resulted in some double- and triple-dipping. Digital distribution, combined with Microsoft's consumer-unfriendly device, takes rentals into "real money" territory and very possibly will take digital purchases in that direction as well. Here's a quote from the satire that may as well be real:

"Just because you buy a DVD to watch at home doesn't give you the right to invite friends over to watch it too. That's a violation of copyright and denies us the revenue that would be generated from DVD sales to your friends," said Glickman. "Ideally we expect each viewer to have their own copy of the DVD, but we realize that isn't always feasible. The registration fee is a fair compromise."

We've heard wording like this before, where industry heads claim some irrationally high license fee is a "fair compromise." It's viewed as fair by licensing agencies because if they were able, they would have charged much, much more.

Falkvinge points out that those satirizing these industries may just be unwitting futurists:

So be careful when you write satire about the madness and delusions of the copyright industry (and that certainly isn't hard – more often than not, ordinary journalism will do fine). Either tread very carefully, or start a little stopwatch the next time you publish satire about what that parasitic, shameless industry will think of next.

This is a fact. The content industries' love of licenses (and the ability to charge multiple times for the same content) has made it into an easy punchline. Beyond the satire Falkvinge quoted are other examples demonstrating that your average citizen already recognizes the colossal overreach of these industries and the absurdity of the licenses connected to each form of artistic expression they cover.

Earlier this year, sportswriter Mike Tanier used public performance licensing (namely, the violation of these licenses) as the lynchpin for his plan to rid the NFL of replacement referees.

If the crowd at an NFL game sings "Hey Jude," television networks will be stuck broadcasting "Hey Jude" without the rights-holders permission. The sound editors are pretty good at obscuring the B.S. chant, but that only takes a little bit of white noise. Try editing away one of the most recognizable melodies in the world on live television. The broadcast will sound like it is coming from Venus. But if the NFL doesn't drown out the singing, someone big and powerful is going to show up at league headquarters in a suing mood.

When you've got sportswriters using aggressive licensing issues as a punchline, you know the it's reached critical mass. Not only is a sportswriter skewering performance rights organizations, the NFL's copyright paranoia, the Beatles' fierce grasp on its catalog and the overreaction of all these entities to "unlicensed" use, he also laying it out there confidently, expecting his audience to recognize the ridiculousness of it all without needing to resort to pages of footnotes and links to relevant legal information. It's obvious to everybody but the licensing agencies how utterly preposterous this all is.

Need another example of this common knowledge? Just recently, a piece at famous humor site McSweeney's recasted Gil Scott-Heron's famous phrase, explaining exactly why "the revolution will not be televised." Here's a few choice quotes from a much longer piece (all of it worth reading):

The revolution will not be televised due to our blackout policy. Because the revolution is taking place in your market, you will be unable to watch the revolution. Instead of the revolution, the classic Billy Bob Thornton/John Cusack film, Pushing Tin, will be televised.

The revolution will not be televised, but it will be available for streaming on Hulu.com seven days after the revolution takes place.

The revolution will not be televised because of a dispute between the revolution and DIRECTV. If you'd like to see the revolution, please call DIRECTV and demand that they put the revolution back on the air.

The revolution will not be televised, but if you have a cable subscription, you can log in to WatchRevolutions.com and use their authenticator to watch the revolution. Just provide your username and password, and you will have access to the revolution live, plus alternate angles, commentary, and the ability to share your login with up two more IP addresses.

With digital distribution, each iteration is subject to its own limitations and restrictions, just the way the content industries prefer it. As the shift continues in this direction, I would expect the major players to continue their march into brave new licensing schemes far surpassing satirists' most fevered dreams. They control the licenses they've "sold" their customers and have shown they have absolutely no qualms about abusing consumers in order to squeeze a few more dollars out of the content. Microsoft's filing turns what was originally a series of punchlines into a very plausible glimpse of the future.

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Microsoft Patents TV That Watches Back, Counts Heads, Charges Admission

Tim Cushing — Fri, 9 Nov 2012 11:45:55 PST

Here's a scenario for you: at some point in the the near future, you sit down in front of your Xbox 720/960/1080 and queue up a little video-on-demand from the Live Arcade selection of movies. You select a film from the menu and, before you can press the "Play" button, you are greeted with another menu giving you several price points, depending on how many people will be watching.

It sounds ridiculous, but Microsoft has applied for a patent covering a method that could make this a reality. Geekwire (via Slashdot) has the details on a patent application utilizing the Kinect (or its successor) to count noses for content providers.

The patent application, filed under the heading “Content Distribution Regulation by Viewing User,” proposes to use cameras and sensors like those in the Xbox 360 Kinect controller to monitor, count and in some cases identify the people in a room watching television, movies and other content. The filing refers to the technology as a “consumer detector.”

In one scenario, the system would then charge for the television show or movie based on the number of viewers in the room. Or, if the number of viewers exceeds the limits laid out by a particular content license, the system would halt playback unless additional viewing rights were purchased.

While it's a little early in the process to decide whether this is actually a pursuit Microsoft deems worthy of implementing or just some brainstorming put on paper, there's no denying that media companies and content providers would certainly not mind at all if an enterprising group could create something that would allow them to monetize every eyeball in the house.

While Kinect hackers have managed to crank out some very interesting uses of the body-tracking technology, it looks as though the in-house team has something a bit more devious up its collective sleeve. With this in place, PPV events could move to the Xbox to get the most bang for their buck during prize fights and MMA bouts. Movies rented through XBLA (Xbox Live Arcade) could rake in even more money by charging for each additional set of eyeballs, leading to Xbox owners treating their own living rooms like drive-ins and sneaking in additional viewers through piles of coats lying strategically on the floor.

Every use may not be as mercenary as the above scenario, however. The Kinect "Consumer Detector" could also prevent younger (or at least, shorter) eyeballs from being sullied by R-rated movies or, god forbid, porn.

The system could also take into account the age of viewers, limiting playback of mature content to adults, for example. This patent application doesn’t explain how that would work, but a separate Microsoft patent application last year described a system for using sensors to estimate age based on the proportions of their body.

Unfortunately, this will prevent pornstar midgets from viewing porn, but please, let's think of the children, each of whom represents a potential income stream.

The intro paragraph of the application lends itself to use for many different royalty collecting entities. In addition to the mentioned Pay Per View/Video-on-Demand possibilities, there's also performance rights organizations to be considered, because once you start talking licenses, they're never far behind.

A method of distributing content to a user, comprising: providing a selection of content available to the user; for each content, presenting a licensing option comprising associating a performance of the content with an individual user's consumption of the content at a display device; receiving a selection of one of the content and a license display option for said content; presenting the content to the display device if a number of user performances allowed for the content is equal to or less than the license option for which the selection is received; and monitoring the presentation of the content at the device to determine the number of users consuming the content during the performance.

This description, along with the methods listed below it in the filing, seem to indicate that your fully-paid and relatively peaceful viewing of a movie or prize fight could come to an instant halt and ask you to feed the meter any time someone new walks into the room. Or better yet, the new system could push already-strained friendships to the limit. "Oh, hey. I'd invite you in but I'm only got enough money for five people. Sorry, man. Maybe next time." AWKWARD.

But beyond the fact that this patent, if granted and implemented, will create a whole new level of rent-seeking across a wide swath of the "creative industries," there's also privacy issues that need to be addressed. Does any company, whether it's Microsoft or any of the upstream content providers, have the right to basically scan your living room for signs of life simply because they're the one licensing the content? For that matter, is it any of their business how many people you have watching a movie or listening to music in your private residence? It certainly never has been before, but with the advent of digital distribution (and its accompanying "licenses"), the attempts to wring every last dollar out of every bit of content will continue.

Will "buying for five but watching for ten" become the new "piracy?" Pursuing this angle isn't going to make Microsoft any friends, at least not in terms of customers. Consumers' first reaction would probably be to toss the "Consumer Detector," in which case it's not difficult to imagine it becoming a mandatory piece of equipment for certain applications. After that, for consumers concerned about this, their only option would be to toss the Xbox. I don't think Microsoft has enough confidence in the future of its console line to take that chance.

Or maybe it's got nothing to do with the console. Maybe it's some groundwork for the new "Cloud TV" service Microsoft inadvertently announced via a job posting.

Microsoft is known for revealing additional product details in job postings, but a new round of listings has unveiled a brand new TV service. Described as a "Cloud-based TV platform," Microsoft is looking to hire engineers to build client applications for the service. LiveSide spotted several job postings related to Cloud TV recently that tempt job candidates to "get in on the ground floor of an ambitious new project."

Combining this with the above patent opens up the possibility that Microsoft could be crafting the content delivery system that watches you back, delivering headcounts to media companies and cutting off customers who violate the license terms by exceeding the limits declared by the copyright holder. At this point, the whole setup is full of easily exploitable holes. The odds of this coming to market are extremely low, if for no other reason than the potential backlash against any company involved. But it's not impossible, either. There are many rent-seekers in the content market and many of them have never shied away from a new source of income just because it might be unpopular. (At least, not at first. Many have walked back ideas due to public outcry, but they rarely seem to discard bad ideas before trying to implement them first.) Microsoft doesn't seem to share the same enthusiasm for angering the public to make incremental gains, but its design team has crafted a handy backdoor for a whole new level of IP enforcement—one that will only widen the gap between what consumers feel are acceptable limitations and what the content industries believe they should be.

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Skype Accused Of Handing Out Private Info To Private Company

Mike Masnick — Tue, 6 Nov 2012 15:51:04 PST

Over the last year or so, there's been concern about Skype's commitment to privacy following its acquisition by Microsoft. Now a situation in the Netherlands is serving to renew those fears. As highlighted by Slashdot, it appears that Skype handed over information on a 16-year-old user to a private information technology firm that was investigating some denial of service attacks against PayPal.

The security firm, iSIGHT, was hired by PayPal to investigate the attacks, and an employee of the company reached out to Skype seeking information about one user who he thought might be involved. And Skype coughed up the info -- including username, real name, email address and home address -- no questions asked. As the article notes, there was no court order or anything like that. Just a guy from a private company asking and Skype said, "sure, here's all the info."

There are questions about whether this move violated some European privacy directives. At the very least it seems clear that it violated Skype's own policies, which include not providing customer data unless required by law, or if official law enforcement is involved. In this case, neither thing is true. One hopes that this is just a one-off mistake by Skype, but it's worrying nonetheless.

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Windows 8's Arbitrary App Certification Rules Could Block Skyrim And Other Huge Games

Zachary Knight — Fri, 19 Oct 2012 11:37:00 PDT

We have already mentioned that some game developers were having a hard time accepting Windows 8 as a viable gaming platform. The primary concern is with Microsoft's insistence on walling off its Metro UI and accompanying Windows Store. When a distribution system is walled off, new restrictions come along that limit the type of content that can be made available. As application and game developers learn more about the restrictions Microsoft plans to implement, their concern is growing.

Take for instance the recent discovery that Microsoft plans to limit the games made available through its Windows Store and Metro UI. In a broader piece on what a closed Windows 8 platform means for developers, Casey Muratori highlights one of the strict and ultimately contradictory restrictions on game content. Using the 2011 Game of the Year, Skyrim, as a hypothetical Windows 8 candidate, Casey asks the question, would it be allowed on the Windows store and Metro UI.

Because no software can ship on this future platform without it going through the Windows Store, the team that built Skyrim would have to send it to Microsoft for certification. Then Microsoft would tell them if they could ship it.

Do you know what Microsoft's answer would be?

I do. It would be "no".

This is not speculative; it is certain. Skyrim is a game for adults. It has a PEGI rating of 18. If you read the Windows 8 app certification requirements you will find, in section 5.1:

"Your app must not contain adult content, and metadata must be appropriate for everyone. Apps with a rating over PEGI 16, ESRB MATURE, or that contain content that would warrant such a rating, are not allowed."

And that's the end of it. No Skyrim for the Windows Store, unless of course the developers go back and remove all the PEGI 18-rated content.

Unfortunately, Casey does not highlight the contradictory nature of this arbitrary rule -- what if a game has both an M rating by the ESRB and an 18 rating by PEGI, as Skyrim does. What will Microsoft do? Will it block the game entirely, region-restrict it to only ESRB regions or make an exception to its own rule and allow it for all the world? These are the kinds of questions that frustrate developers. Apple has had its fair share of arbitrary enforcement of content restrictions and you would think that Microsoft would at least attempt to learn from that example.

To further highlight the problem with this restriction, Casey lists four games that are in competition to be 2012's Game of the Year. Of those four games, none would be allowed on Windows 8 for the same reason, they got an ESRB M rating and a PEGI 18 rating. Microsoft has set itself up to exclude some of the best selling games of the future. Hardly a way to attract the support of developers.

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Xbox DRM Punishes More Paying Customers And Actually Restricts Purchasing Options

Tim Cushing — Wed, 10 Oct 2012 05:00:05 PDT

Publishers are still hanging on to DRM despite example after example of how it does little more than annoy or harm paying customers. Why would you purposely annoy those throwing money your direction? To fight off a few pirates? Is it worth it? Most DRM is cracked and discarded within hours of a game's debut and yet, companies hold onto the crippling code, assuming that a small dent in piracy is worth the fallout from hundreds of pissed off customers venting their rage all over the internet.

Some of the most pernicious forms of DRM take the form of "online services" which require a unique login and account before anything can be done gamewise. Under the auspices of "convenience," software companies have managed to lock down access to purchased games, reserving the right to do whatever they want with the software, thanks to broadly written Terms of Service and, for console manufacturers, binding arbitration "agreements."

Over at Medium Difficulty, another gamer is dealing with DRM, as implemented by Xbox Live.

The particular set up for us to play three player horde mode, with system link, in the same house led to our first transgressive living room. Two TVs was wrong, but it felt so right. Gears of War 3 came out and we continued to enjoy our set up, especially since friends could also join over Xbox Live. For our non-nuclear unit, it was the golden age of multiplayer. Then the Mass Effect demo dropped with included MP. While I know we might be in the minority, we found it, and still do, a pretty enjoyable experience. But we hit a hiccup: we couldn’t split screen the multiplayer. There is no couch multiplayer for Mass Effect 3.

So we did what any reasonable modern family with disposable income would do: we bought a second Xbox. And honestly? There’s no going back. Couch co-op is not a guarantee anymore. Xbox Live has done wonders for online console gaming, but it has made a local co-op a second priority in some instances. There are enough games that do not support local co-op, and even more that do not support both local and online at the same time.

So far, the outlay for Microsoft products, at the very minimum, includes two Xboxes. Then there's the fact that two avid gamers share the same living space, meaning that the outlay for software is much larger than your typical "complaining basement dweller." (The preceding is the sort of dismissive wording often deployed by DRM defenders in an effort to make a very real problem sound like some loser's overwrought drama. No one falls for it anymore, but it still makes frequent appearances in comment threads and forums.)

First, the co-op problem. Not really a DRM issue, but the next one definitely is:

Our second Xbox came with Fable 3, which is yay! but it also introduced us to the problems of owning two Xboxes. DRM is a real pain in the ass... We would go to play our Fable 3 campaign on one machine and be told that we couldn’t use the DLC, even though, you know, the code was in the box sitting on top of the machine. Without that DLC, you cannot load a saved game.

Because DLC (downloadable content -- ranging from small add-ons to standalone games) gets assigned to the Xbox it was purchased on and the player's Gamertag (which makes sense), but is a problem when attempting to make sure your DLC shows up on both consoles. Microsoft's rationale is simple: prevent users from going from Xbox to Xbox with their Gamertag and downloading DLC (and standalone games) onto the drives of non-paying gamers.

But this rationale doesn't do much for households with multiple consoles who most likely aren't going to buy a unique copy of DLC (much less full games) for each Xbox in the house. Since the games can't be played at the same time (with one disc and say, two or more Xboxes), it would make sense (from the consumer's perspective) to be able to transfer the DLC (especially if you can't even load a saved game without it) from console to console.

Also bear in mind that purchasing full games via XBLA (Xbox Live Arcade) ties that game to that particular Xbox if the "wrong" Gamertag is used.

For example: I purchased TellTale’s Walking Dead Episode 1. I enjoyed it a great deal. When episode 2 came out, Meg thought she would be a kind and thoughtful spouse and purchase it for me. This was apparently not the Microsoft-endorsed thing to do. Months later, I still haven’t been able to actually play the second episode. I have to either buy it again, or play it on another system. Which is dumb.

Thinking that these limitations could be worked around by using a Family Account (you know, to make sure all of your family members can access the same DLC/games), the author set one up only to find that Microsoft's definition of "family" is rather bizarre.

We set the account up under Meg, then gave me all the permissions that any adult would want on his game console, and went about our gaming business. That was until one day when I went to purchase something from Live and realized that, from Xbox LIVE’s perspective, I was not an adult at all. I could not add points to my account. This wasn’t a setting in our family account. Nope, only one member of the family can add points to their account. If I want points to buy something, Meg has to give me an allowance. I’m not joking, that is the word in the interface. An allowance.

Nice. A system that treats grownups like children and everyone like thieves and at no time approaches the reality of today's gaming market. Instead, it sets up a series of intricate hoops that must be navigated before DLC can move from machine to machine.

Context: Meg’s Xbox is the new version, so black, and mine is the old white one.

Prerequisite: Have both gamertags saved on a USB stick. This allows you to log in to any Xbox without transferring your gamertag or recovering it from Live.

1. Log in to black Xbox with Meg’s gamertag.
2. Go into Family Settings.
3. SELECT GRANT ALLOWANCE.
4. Instead of using the default payment options, because I don’t want to charge her credit card, I select my credit card from the list of her payment methods.
5. Purchase a number of points.

Info: You can add 500 points or in 1000 point increments.

Let's just break in here for a moment and roll our eyes at the "point" system which handily turns actual money into useless Xbox Fun Buxx. Further eye rolling will ensue after step 6.

6. After the points have been added to Meg’s account, I grant them to my account.

Additional info: You can only grant points in increments of 400. Thanks for the convenience.
Remember: Most DLC on Xbox Live is in neither 500 or 400 point increments. I know what’s happening here, Microsoft.

Fun stuff. This sort of plan always leaves a gamer's "wallet" either short a few hundred points or with no way to bring the account down to 0. Microsoft loves this, just like many companies love gift cards. More often than not, the card is discarded with some spare change on it. Not enough for one person to keep, but thousands of leftover virtual coins soon adds up to real money. It's not completely Machiavellian but it still works out pretty well for the companies issuing the cards.

7. I then sign in to my account on the black Xbox, purchase what I wanted and download it.
Result: Now, the DLC is available on Meg’s Xbox so that she can play it if she wants.

8. Turn off the black Xbox, and then log in to the white Xbox with my account and download/transfer whatever I bought.
Result: I can play the DLC on my Xbox, and Meg can play it on her Xbox.

Please note: She cannot play the DLC on my Xbox.

That's a whole lot of steps for a paying customer to jump through just to make sure someone doesn't run off with some free DLC. If you and your family members are taking turns playing something that requires DLC in order to load a save, it would make more sense (in Microsoft's eyes) to skip buying a console(s) from it and just schedule some time in front of the only Xbox. That scenario is whole lot likelier than hoping its DRM scheme will be obtuse enough to force multiple gamers with multiple consoles under one roof to purchase individual copies for every Xbox. Microsoft may consider that to be the "right" or "moral" choice, but I can guarantee you the consumer doesn't.

Last word to "CPG," the author of this piece:

I shouldn’t have to set up charts to figure out what DLC is on what machine, especially when we are on a family account that actually restricts my ability to purchase DLC.

We’re a modern family, geared towards gaming. We’re publishers’ target market – and if we’re not, we will be soon. They need to start thinking ahead.

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Microsoft Sends Google A DMCA Notice... To Block Microsoft's Bing Search Engine

Mike Masnick — Mon, 8 Oct 2012 10:49:07 PDT

Ah, bogus DMCA notices that you just can't make up. TorrentFreak has a good article highlighting a completely bogus DMCA notice from Microsoft (sent by one of its partners on its behalf) that tries to take a bunch of legitimate news sites out of Google's index, on the mistaken claim that they violated Windows 8 copyrights. But, even more ridiculous is an aside mentioned in the article, that some other DMCA notices appear to target Bing, Microsoft's own search engine. Indeed, they're not that hard to find. If you look up DMCA notices asking Google to remove links to Bing, Microsoft shows up quite a bit: If you dig down, you can find out the specifics, such as this DMCA notice sent on May 23 of this year, sent by Marketly on behalf of Microsoft, supposedly to stop the infringement of Office 2010. It lists out 997 URLs that it wants Google to take out of its search results, including a link to a Bing search. Given that Microsoft owns Bing... you'd think it would remove that search first. What's even more amusing is that if you go to the link in question on Bing... it's still there.

Yes, this is yet another silly move by an automated system, but it once again highlights some of the ridiculousness involved in DMCA takedowns for search results.

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Two Years Later, Lobbying By Microsoft & IBM Creates Loophole In New Zealand To Allow Software Patents

Mike Masnick — Thu, 30 Aug 2012 03:14:21 PDT

You may remember a few years ago there was some controversy down in New Zealand over software patents. There was a plan to explicitly outlaw software patents, but then someone accidentally leaked the fact that big tech companies (mainly US ones, like Microsoft and IBM) had lobbied hard against outlawing software patents, leading to a change in plans. After that leak resulted in more public outcry it was claimed that the proposal would go back to outlawing most, but not all software patents. Well, it seems that the supporters of the big US software firms were just biding their time. As various reports are noting, more than two years after all of this, proposed amendments have finally been made to the bill, and they appear to create a massive loophole for software patents, which certainly seems to reflect the desires of Microsoft and IBM's lobbying efforts in the country. One hopes that further public outcry will finally make Kiwi politicians realize that they don't have to do what American companies demand...

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The Pending Kodak Patent Auction May Create Weapons Of Business Destruction

Daniel O'Connor — Mon, 6 Aug 2012 15:37:00 PDT

At the moment, the patent system is seriously malfunctioning. The high volume of low quality, poorly defined patents, particularly in the software and IT industries, is catalyzing the explosion in patent litigation. And lately, the problem has been getting much worse. In fact, the amount of litigation involving software patents has tripled since 1999 and a software patent is more than twice as likely [PDF] to be involved in litigation as its non-software counterparts.

Our broken system affirmatively penalizes innovation. Empirical research has shown that the more money a company invests in R&D, the more likely it is to be punished with infringement litigation. This weakens our economy and harms our nation’s global competitiveness. Just ask America’s most prolific legal scholar, Judge Richard Posner. Furthermore, last year’s patent “reform” legislation, the America Invents Act (AIA), did little to solve the fundamental problems at the heart of the current explosion in litigation. As Richard Waters of Financial Times wrote last year, the AIA did little to fix the broken system:

Yet, while there was general agreement that an overhaul was badly needed, the law that was eventually passed did little to fix what is widely seen as the current system’s chief weakness: that it leads to the issuing of too many patents that lack real innovation and that clog up the legal system once their holders seek to enforce them against alleged infringers.

As a result, we have arrived at another inflection point as patents, and the problems surrounding them, are again in the headlines. Although the Samsung vs. Apple trial, and its fight over who owns the rights to a rectangle, is getting a majority of the recent headlines, another major patent battle is looming. This Monday opening bids were submitted ahead of an August 8 auction for some 1,100 patents belonging to the now bankrupt Eastman Kodak Corporation. Given the rampant patent litigation in the high-tech space, the thought of 1,100 more litigation weapons flooding the marketplace is troubling. The situation gets even more worrisome when one looks at the parties lining up to bid.

The Wall Street Journal reports that both Apple and Google are leading competing consortia in an effort acquire these patents, which largely pertain to digital photography – a key component in smartphones. The consequences of this will potentially open up another front in the smartphone patent wars. Although Google’s consortium appears defensive, as it is made up of its partners in the Android ecosystem, Samsung, LG and HTC, and defensive patent aggregation firm RPX (which pledges never to assert its patents offensively), Apple’s consortium is headlined by the notorious (and massive) patent assertion firm, Intellectual Ventures, and Microsoft.

The partnership between Apple, the main litigant in the global “thermonuclear war” against Android, and Intellectual Ventures, the king of the patent trolls, is particularly troubling for many reasons: two of which are explored here.

The Sketchy History of Recent Patent Auctions

As many observers of the patent world may remember, there have been two major recent patent auctions in the IT space, where failing companies’ patent portfolios have been put on the auction block. In the case of Novell, which was in the process of being acquired by Attachmate, 882 patents were sold to a consortium of bidders, including Apple, Microsoft, EMC and Oracle. In the case of Nortel, the former Canadian Telecom giant that fell on hard times and went bankrupt, its patent portfolio was eventually purchased by Rockstar Bidco, a consortium of companies that included Apple, Microsoft, Sony and EMC. In both cases competition concerns were raised, particularly from supporters and users of open-source software, that prior commitments made by patent holders and new commitments made by the purchasers, not to use patents against open-source software (or to abide by prior FRAND commitments) would be honored.

However, despite these concerns, the antitrust regulators world over – relying on pledges from the parties involved in the transaction – stated their belief that the prior commitments from Novell and Nortel regarding the use of their patents would be honored by the new owners.

As Michael Tiemann of the Open Source Initiative (OSI) commented on the Novell transaction:

When the OSI first learned of this proposed transaction, we were alarmed that four companies with dominant market positions and a mixed attitude towards open source software could redeploy what the open source community had considered to be a friendly asset–Novell’s patent portfolio–into a weapon against open source software. We are delighted that you have made clear that the [german antitrust regulator] cannot allow a transaction that would create or strengthen a dominant position on markets in which such investors are active, and we are happy to provide the additional information you have requested about the proposed restructuring of this transaction.

In the US, the DOJ approved both deals (plus Google’s Motorola acquisition) but said it would continue to monitor the wireless device space because it remained concerned as to whether or not prior pledges would be honored:

The division’s continued monitoring of how competitors are exercising their patent rights will ensure that competition and innovation are unfettered in this important industry.

All three of the transactions highlight the complex intersection of intellectual property rights and antitrust law and the need to determine the correct balance between the rightful exercise of patent rights and a patent holder’s incentive and ability to harm competition through the anticompetitive use of those rights.

However, soon thereafter, the President of the company behind the Apple and Microsoft backed bid – the Rockstar Consortium – publicly repudiated new commitments made by the companies that established it, saying: “We are separate. [Apple and Microsoft's pledges] don’t apply to us.”

This is made even more troubling by other comments that the head of the Rockstar Consortium, John Veschi, made in the same article, which included doozies like:

“Pretty much anybody out there is infringing… It would be hard for me to envision that there are high-tech companies out there that don’t use some of the patents in our portfolio.”

And this revealing comment that articulates Veschi’s justification for holding the rest of the industry hostage:

“A lot of people are still surprised to see the quality and the diversity of the IP that was in Nortel… And the fundamental question comes back: ‘How the hell did you guys go bankrupt? Why weren’t you Google? Why weren’t you Facebook? Why weren’t you all these things, because you guys actually had the ideas for these business models before they did?’ They were within a Bell Labs-y kind of environment, and maybe the wherewithal of turning them into businesses wasn’t necessarily there.”

So, to recap, the commitments that gave worldwide antitrust regulators the confidence to approve these controversial deals are being repudiated by the individual with the power to ignore them, and who thinks that:

Everyone in the IT industry infringes on his patents.
Because Nortel – his former employer where the Rockstar patents came from – had some ideas, but was less successful at implementing them, he has the right to hold the rest of the IT industry hostage.

Apparently, the purpose of the patent system is to allow unsuccessful companies the right to extract billions of dollars from companies that are more successful. (Again, how is this not a net drag on innovation?)

But the very fact that he claims EVERYONE in the IT industry infringes on his patents seems to be prima facie evidence that many, if not most, of these patents were not novel, and therefore invalid… unless he is contesting that every IT company stole Nortel’s ideas, which is laughable. But I digress…

What we do know now is that patent commitments made to competition authorities are suspect (and, of course, commitments are made to be broken), particularly when patents are controlled by NPEs outside of the direct control of the original purchasers.

Loose Nukes

To fully understand the problems posed by Intellectual Ventures’ involvement in this new consortium, one must also understand the tectonic shift in the underlying foundations of the patent system. Although the explosion of low-quality, poorly defined patents – particularly in the software space – has long been identified as a problem that greatly increases litigation risk and the overall deadweight loss to our economy, the problem has been largely isolated until recently. It was once thought that the threat of Mutually Assured Destruction (MAD to borrow the Cold War acronym), meant that the big companies with large patent portfolios would not sue their peers because they would be sued back and everyone would lose. However, the rapid growth of huge non-producing entities (NPEs) that exist solely to exert other people’s patents (usually acquired through bankruptcy) against successful companies greatly changed the precarious MAD equilibrium that once existed.

Some – admittedly clever – companies, such as Apple, recognized that they could acquire patents, take a perpetual license to them, and then sell them off to NPEs such as Intellectual Ventures (or as they have already done with Digitude), who are then incentivized to attack the original purchasers' competitors (because the purchasers have a license and its competitors don’t). This strategy allows the original purchaser to attack their competitors and make money off of the patent sale to the NPE (and often they take a cut of the litigation and settlement revenue as well) all the while insulating themselves from the threat of countersuit (the NPE is immune to the threat of counter-assertion because they don’t make products and therefore do not infringe on anyone’s patents).

To extend the nuclear war metaphor to encapsulate this new phenomenon, if the old paradigm was Mutually Assured Destruction where corporations, like nation states, refuse to attack each other because of the threat of personal annihilation, these new NPEs are akin to stateless terrorist entities with nuclear weapons, who are immune to direct threat of attack. Also, much like stateless terrorist organizations, these NPEs move in the shadows and cover their tracks. Intellectual Ventures, by one scholars account, has at least 1300 shell corporations – so its activities are difficult to track. So, we therefore see “states” discretely selling “nukes” to “terrorist cells” with the understanding that they will be used against their foes who cannot directly attack them back.

The bankruptcy portfolio auctions, however, are a variation on this theme, and are more similar to loose nukes from “failed states,” wherein weapons of business destruction flood the marketplace as one entity fails, and the remaining entities with the most to lose – enterprises that actually produce value – must scramble to keep these loose nukes out of the hands of less reputable actors.

DOJ Should Review Newest Auction with Recent Trends in Mind

These patent consortiums allow companies like Apple and Intellectual Ventures to work together to acquire more patents that will be used in the thermonuclear war against Android. As the case of the prior auctions make clear, the commitments that competition authorities have relied on in the past to ensure that these consortiums don’t use patents “anticompetitively” (which is semi-ironic, given that new patent thickets are valuable because they give you the right to harass your competition) are suspect at best, particularly because Intellectual Ventures will filter the patents through a network of “legally distinct” shell companies – companies that “companies” will likely claim prior commitments don’t apply to them – before they are used against Apple’s Android competitors, which they surely will be, given the incentives of those involved.

Given the Justice Department’s prior concerns and recent micro and macro trends in the patent ecosystem, it seems that it is completely appropriate for the DOJ (and competition authorities around the world) to review this upcoming transaction from a different lens than it did just 6 months ago. The world has changed.

Cross Posted from Project DisCo

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Clearing The Air On Skype: Most Of What You Read Was Not Accurate, But There Are Still Reasons To Worry

Mike Masnick — Fri, 27 Jul 2012 11:59:34 PDT

Over the last few days there's been something of a firestorm of people claiming that Skype was letting police listen in on your calls. We had been among those who noted that Skype was, at the very least, no longer willing to make clear statements about whether the service was able to be wire-tapped. Skype to Skype calls are a direct person-to-person connection (rather than through a central server), so most people thought that they were not particularly tappable. That's not quite true. And, of course, if you use Skype as part of a phone call to or from a regular phone line, those calls would be tappable via traditional phone wiretaps.

The "Skype may be letting law enforcement listen in on your calls" furor took off in the following few days. The Washington Post reported that Skype was making it easier for law enforcement to get text chat and user data. It's not actually clear that this is true either (but more on that later). It then kicked into high gear, when Eric Jackson at Forbes (whom we've written about before for his bizarrely uninformed take on the Yahoo/Facebook patent fight and those who reported on it) wrote a ridiculously ignorant post claiming that Microsoft can listen in on all his Skype calls, based off an incredible misreading of the original post about Skype's refusal to comment directly on the wiretapping abilities.

Jackson's more level-headed colleague, Kash Hill, pushed back on Jackson's claims, but also noted that the law (in the US) is pretty clear that there is no legal requirement for Microsoft to make Skype tappable... but there have been regular efforts made to change that. Hill spoke to legal expert Jennifer Granick who pointed out that just the uncertainty and threat that such legislation might come down the road at some point seemed to be leading companies to make development decisions that left open the possibility of surveillance:

The mere threat of regulation is driving innovation in the direction of backdoors and surveillance compliance. And US law doesn’t require that, yet.

But what's actually happening, since so much of this seems to be conjecture and speculation? Well, as the attention and questions grew, Skype itself weighed in to "clarify." It noted that it has been installing more in-house "supernodes" (in the more distant past, various Skype users would act as supernodes) to improve quality for the directory -- but that Skype to Skype calls (again, not calls that touch the public telephone network) were still encrypted person-to-person calls:

The move to in-house hosting of "supernodes" does not provide for monitoring or recording of calls. "Supernodes" help Skype clients to locate each other so that Skype calls can be made. Simply put, supernodes act as a distributed directory of Skype users. Skype to Skype calls do not flow through our data centres and the "supernodes" are not involved in passing media (audio or video) between Skype clients.

These calls continue to be established directly between participating Skype nodes (clients). In some cases, Skype has added servers to assist in the establishment, management or maintenance of calls; for example, a server is used to notify a client that a new call is being initiated to it and where the full Skype application is not running (e.g. the device is suspended, sleeping or requires notification of the incoming call), or in a group video call, where a server aggregates the media streams (video) from multiple clients and routes this to clients that might not otherwise have enough bandwidth to establish connections to all of the participants.

[....] Skype software autonomously applies encryption to Skype to Skype calls between computers, smartphones and other mobile devices with the capacity to carry a full version of Skype software as it always has done. This has not changed.

But... is there still reason to be somewhat (though not hysterically) concerned? Perhaps. Chris Soghoian has the best post by far on what's known and what's unknown, which explains how Skype's person-to-person encryption may not be as totally untappable as some people assume. He notes that while the Skype to Skype calls are encrypted, Skype has access to the encryption key (he has a full explanation for how/why this is) and then explains what this likely means:

Ok, so Skype has access to users' communications encryption keys (or can enable others to impersonate as Skype users). What does this mean for the confidentiality of Skype calls? Skype may in fact be telling the truth when it tells journalists that it does not provide CALEA-style wiretap capabilities to governments. It may not need to. If governments can intercept and record the encrypted communications of users (via assistance provided by Internet Service Providers), and have the encryption keys used by both ends of the conversation -- or can impersonate Skype users and perform man in the middle attacks on their conversations, then they can decrypt the voice communications without any further assistance from Skype.

So there's a risk there, and Soghoian notes that Skype's reticence to set the record straight on exactly how it handles encryption leaves open this possibility. That is it's entirely possible that there are ways that law enforcement can intercept Skype calls, while Skype can still talk about its encryption, leaving the false impression that the calls are immune from interception. Soghoian also notes that the talk about Skype handing over info (not call access) to law enforcement is not new and has been known for quite some time (and, honestly, doesn't appear all that different from lots of other similar setups).

So, to summarize:

Skype did make some infrastructure changes recently, which did increase the number of self-hosted supernodes, but those changes likely were to increase the quality of the product, and had little to do with law enforcement/surveillance.
Skype has always had a program to provide available information to law enforcement if legally required to do so, but appears not to have made any major change to that program in quite some time. That program does not appear to include the ability to listen to calls.
Skype to phone (or phone to Skype) calls have always been tappable, because they touch the public telephone network, where they can be intercepted.
Skype to Skype calls remain encrypted, making it more difficult to "tap" them. However, because of the way Skype likely handles encryption keys, this does not mean that governments can't intercept the calls (or impersonate certain parties via Skype).
In the end, then, it appears that much of this discussion is a whole lot of fuss about nothing particularly new -- but it is worth noting that your Skype calls probably were never quite as secure as you thought they were, even if they're somewhat more secure than some other offerings with little or no encryption and a central server. But if you're looking for 100% secure communications, Skype isn't it -- but that's not because of any change. It's likely always been that way.

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Microsoft Continues To Get Companies To Pay It For Non-Microsoft Software

Mike Masnick — Wed, 25 Jul 2012 12:22:00 PDT

We've discussed in the past just how ridiculous it is that Microsoft has a "licensing program" for Android -- someone else's technology. And, of course, for many years, Microsoft has been running around insisting that Linux infringes on hundreds of its patents, though it gets pretty shy when asked to identify them. Every so often, Microsoft convinces some company to cough up some protection money for being Linux users -- though usually it's for companies selling Linux-based hardware.

Now Microsoft has convinced Amdocs to fork over some cash for running a Linux-based service. While (of course!) details are sparse, Microsoft made sure in the press release that it was clear that the license was for "Amdocs' use of Linux-based servers in its data centers."

This really does seem somewhat offensive. Microsoft is getting other companies to pay it for software that it had absolutely nothing to do with (and which many people use, in part, because it keeps them away from having to pay Microsoft).

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Skype No Longer Willing To Claim That Its Calls Are Untappable By Law Enforcement

Mike Masnick — Tue, 24 Jul 2012 03:02:10 PDT

For years, we've noted that various governments have sought to be able to wiretap Skype -- and the company has always insisted that its peer-to-peer architecture made it impossible. Last year, however, some hackers suggested that there was now a backdoor in Skype. And now when a reporter for Slate, Ryan Gallagher, is pushing the company on this issue, it refuses to make a clear statement onto the ability to wiretap Skype calls. You can draw your own conclusions.

It is, of course, possible that this is just the tighter-lipped way of Microsoft, now that the software giant owns Skype, but it certainly is raising questions for those who believed that Skype was a safe way to hold conversations away from the ears of increasingly intrusive government surveillance. It seems like there's new incentive for others to work on truly secure voice communications.

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