Communications of the ACM
Software Liability Law Could Divide Open Source
The European Commission has proposed that software companies should be held liable for the security and efficiency of their products. Ovum's David Mitchell says the proposal will likely force software vendors to require support and maintenance agreements for each purchase to help fulfill warranty obligations. This requirement already matches the established business models of open source vendors, which sell support services, but the "garage open source model" of independent developers, who do not have the resources to guarantee their products at that level, would suffer, he says.
Keystone Law Corporation director Bryan Tan says the proposed law will likely inflate prices for consumers outside of the European Union due to the vendors' need to provide insurance, and the "death" of some smaller vendors will lead to increased prices due to a lack of competition.
Mitchell says liability will be hard to pinpoint because of the inter-dependency between hardware and software, with a software failure potentially being blamed on hardware or the installation of another piece of software. However, Allen & Gledhill partner Stanley Lai says that consumers will benefit from the proposed law. While prices are likely to go up, Lai says consumers may see that price increase as a worthwhile investment in return for quality assurance.
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