The Penguin and the Cartel: Rethinking Antitrust and Innovation Policy for the Age of Commercial Open Source

The nice thing about the open source (“OS”) phenomenon is that it changes faster than academics can study it. Ten years ago, most OS collaborations were organized around noncommercial, “fun” motives like altruism, hobbyist interest, and the like.1 By contrast, today’s OS projects are mostly commercial.2 Even if our theories and policy prescriptions were right ten years ago, the ground has shifted. This Article asks how judges and policymakers should manage the new commercial OS. In the process it uncovers a paradox.

On the one hand, OS lets companies share costs. This potentially gives them the power to create far more software than ever before. But sharing also has a dark side. Since all OS companies offer consumers exactly the same shared codebase, no company can offer better shared software than its rivals.

The result is a de facto cartel that suppresses competition and incentives to invest. Strangely, then, OS is self-limiting: Companies do share, but write far less shared code than they ought to.