European Union Warranty and Liability Cost Issues: The End of Open Source?

The European Union is considering holding software vendors liable for damages caused by software defects.  This poses several interesting cost problems.

While SEER estimates the cost of software warranty (how much it will cost to repair defects) during the warranty period, it does not estimate what the potential legal ramifications could be (and hence what the incremental cost should be) for covering business disruption, lawyers, etc. to deal with this… or at least the cost of insurance to cover this.

And, as discussed in Infoworld, the issue of open source becomes even more problematic.  If you use open source (free) software, what is the business relationship between the vendor and the user? I think there is none.   So I don’t think the open source vendor could be held liable. But if he could, seems like the demise of the open source business model.

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