News & Insights

COALITION INSIGHT: New Legislation Will Identify Restrictive Licensing Practices Across Federal Agencies

By Ryan Triplette, Executive Director, Coalition for Fair Software Licensing

Momentum for the Principles of Fair Software Licensing has been building throughout the European Union and, in recent months, reached the U.S. Capitol. In September, Sen. Gary Peters (D-Mich.) and Sen. Bill Cassidy (R-La.) introduced legislation to improve federal IT management and identify the existing barriers—including restrictive software licensing practices—to bringing best-of-breed products and services to federal agencies. In the House, Rep. Matt Cartwright (D-Penn.) is currently securing co-sponsors for companion legislation, which is expected to be introduced in the weeks to come.

Curbing waste, fraud, and abuse throughout the federal government has long been a bipartisan priority in Congress. For this reason, it was not surprising to see the Peters/Cassidy bill pass through a congressional committee with unanimous support and no objection.  Historically, Congressional oversight on these “good government” issues – whether eliminating budget waste, employing best practices in procurement, or improving strategic human capital management – begets prudent solutions to protect taxpayer dollars and improve government efficiency. Given the primary role of technology in the daily operations of the U.S. government, it is imperative that policymakers understand the impacts that restrictive licensing practices have on government efficiency and agency coordination.

 Restrictive software licensing practices – including inflexible licensing agreements, limiting interoperability, and tying of core products to adjacent services – can prevent customers from utilizing the most productive, cost-effective, or secure software and cloud services available. For government customers, transparency is critical to determine if – and how – software vendors may be utilizing these and other tactics to boost their bottom lines at the expense of productivity, cybersecurity, and hard-earned taxpayer dollars.

To identify these issues across the federal government, the Peters/Cassidy bill, S. 4908, the Strengthening Agency Management and Oversight of Software Assets Act, requires the head of every federal agency to produce a report assessing their respective agency’s software entitlements – including identifying redundancies, the extent to which software is interoperable, and total / related costs of enterprise software agreements. 

The significance of this assessment cannot be overstated. These reports will provide critical insight into how the government is currently spending its federal IT budget – and do so in a transparent and actionable way. The legislation seeks to identify the cost – both to the budget and efficiency – of restrictive licensing practices to the U.S. government to improve federal procurement, enhance cyber security practices, and limit taxpayer waste in the future. For context, the last bill passed by Congress addressing accountability in IT – the MEGABYTE Act of 2016 – reduced unnecessary agency software costs by more than $450,000,000.

Unfortunately, restrictive software licensing is not unique to contracting with the U.S. government. These tactics impede the ability of customers in both the commercial and public sector to utilize the software and cloud services that best fit their needs. However, given the pervasive monoculture of productivity software, the challenges that these limitations present to the federal government are pronounced.  Across the federal government – which has a civilian workforce of nearly 2.1 million people – it is critical that technology works in harmony across agencies’ products and services, and that employees can mix and match the technology that best serves their roles.

The Strengthening Agency Management and Oversight of Software Assets Act demonstrates the growing momentum in the U.S. to hold legacy software providers accountable and help their customers reap the benefits of the cloud. It also underscores the importance of the Principles of Fair Software Licensing, and the work ahead of us to put them into practice across all sectors.

As a healthcare software provider, our ability to utilize the cloud provider of our choice impacts more than just our business – it affects the health and well-being of patients everywhere. Restrictive software licensing imposes real-world threats like pricing increases that directly influence how we are able to assist healthcare providers and the patients they serve. We support the Principles of Fair Software Licensing to protect both cloud customers and the communities they serve.

Healthcare Technology Company

Cloud computing has brought low-cost, on-demand IT services to every corner of the economy, raising productivity and innovation levels at enterprises of all sizes. And intense competition and innovation among cloud providers continues to drive costs down while adding new customer capabilities.

But some incumbent IT vendors are imposing restrictive software licenses to limit how customers can take advantage of competing cloud offerings.

NetChoice supports the Principles of Fair Software Licensing as a roadmap to drive innovation, serve customers, and promote competition in IT services.


Frustration, use limitations, threatened audits, and significant additional expenses. That has been our experience with unfair software licensing. Organizations need transparency from their software providers.

We support the work of the Coalition for Fair Software Licensing to protect customers and ensure IT spend is effective and free from surprises.

Global Building Materials Supplier

Unfair software licensing practices in the cloud are a global issue, and CISPE is pleased that the Coalition for Fair Software Licensing is taking the Principles to North America.

Originally launched and jointly conceived by customers and cloud providers in Europe, we encourage customers around the world confronted with unfair software licensing practices to consider the Principles as a powerful framework for positive change.


As start-ups, it is essential that we retain flexibility to use the cloud infrastructures that fit best our aspirations and those of our customers. The Principles of Fair Software Licensing help the next generation of software and service providers to avoid lock in and ensure a fair playing field for all. Seeing their adoption in North America adds weight to this important movement for innovators in Spain and worldwide.

Carlos Mateo Enseñat

President, Asociación Española de Startups (AES), and Promoter of the NUBES Initiative in Spain

Developed in Europe by CIOs and cloud providers, the Principles of Fair Software Licensing are supported by digital organizations in Italy such as Assintel. Assintel welcomes the Coalition for Fair Software Licensing’s embrace of the Principles in North America. Fair licensing of software in the cloud is a global issue for businesses of all sizes. In Italy, our government recognises this challenge and just updated its antitrust bill to put an end to unfair software licensing practices.

Businesses in North America can benefit just as well as those in Italy from a best practice framework for software licensing.

Paola Generali

President, Assintel

As a longtime advocate for open systems and open networks, CCIA supports the competitive ideals reflected in the Principles of Fair Software Licensing for Cloud Customers as the Coalition embarks upon its efforts in North America.

Matt Schruers

President, CCIA

Some legacy software providers are attempting to extend their current on-premise market dominance into the cloud market through aggressive and restrictive contracts, licensing terms, and software audits.

While many promote ‘cloud freedom,’ in actuality they are employing tactics designed to lock out competition and innovation while increasing profits for themselves at the expense of their customers. No longer can legacy software providers be allowed to disguise their predatory practices.

I am proud to align myself with the Coalition for Fair Software Licensing in shining a light on these issues and putting forth actionable solutions.

Craig Guarente

Founder and CEO, Palisade Compliance

Despite the current spotlight on antitrust issues in Washington, behemoth software providers continue to misuse their legacy status and market power to target business customers with predatory audits and trap those customers in restrictive licensing agreements.

Through our practice — dedicated to representing software licensees against these very tactics — we have seen first-hand the real world effects of such licensing practices. Both growing and established companies are routinely kneecapped by unexpected costs, forced to waste immeasurable resources in spurious audit defense, and stymied in their efforts to make the technology changes they believe are necessary for their business.

We support the Principles of Fair Software Licensing and believe they represent an excellent and necessary step towards much needed business consumer relief and will help open the market to smaller providers in the cloud ecosystem.

Arthur S. Beeman & Joel T. Muchmore

Founding Partners, Beeman & Muchmore, LLP

Consumers benefit from a competitive, dynamic information technology marketplace. Competition drives innovation and ensures that customers get the benefit of fair pricing.

Overly restrictive, abusive licensing agreements from IT companies with market power, on the other hand, impose costs on government and corporate customers of reduced innovation and long-term price increases. We support the Principles of Fair Software Licensing and policies that encourage innovation, competition, and licensing practices that give customers the freedom to mix and match solutions from a wide variety of vendors.

This is particularly critical in the market for cyber security solutions since hackers are innovating every day, leveraging new strategies, new tactics, and new technologies to support their illegal campaigns. The only way to defeat nation states and trans-national criminal organizations is for the government to ensure that the IT market for cyber security is as competitive as possible and customers have the freedom to choose.

Cybersecurity Provider

The Alliance for Digital Innovation supports the Coalition for Fair Software Licensing’s efforts to protect customer choice and advocate for access to modern, secure commercial solutions.

As advocates for public sector customers, we think that government mission owners and enterprise information technology and cybersecurity leaders should have access to as many modern commercial solutions as possible.

These solutions are critical components to driving digital innovation and security in the public sector, and ADI supports removing barriers that slow adoption of those solutions, including restrictive licensing practices.

Alliance for Digital Innovation

As an attorney, I have represented enterprise software customers for years and have routinely seen enterprise software companies deploy predatory business practices, including falsely inflating alleged non-compliance gaps, to increase profits and limit customers’ ability to go elsewhere.

These practices produce causal effects throughout the economy including increased prices, as businesses across various sectors are forced to spend resources dealing with these unforeseen issues. I support the work of the Coalition for Fair Software Licensing to help my clients and enhance an economy that provides opportunities to all.

Pam Fulmer

Founder and Partner, Tactical Law Group LLP

We believe licensees should be able to deploy licensed software in a way that best suits their business, including their choice of cloud provider at no additional cost. Having experienced licensing practices inconsistent with the Principles of Fair Software Licensing, we support the Principles and urge others to support both them and the Coalition for Fair Software Licensing.

Insurance Industry Business

Startups, often operating with limited resources, need the freedom to assemble the technology infrastructure that best suits their needs.

Cloud computing infrastructure is central to startup growth, and the Principles of Fair Software Licensing will help maintain accountability, mitigate unnecessary costs, and promote innovation in this environment.

Industry-wide adherence to these principles will level the playing field for startups.


Get Involved

Learn more about joining the Coalition or expressing support for its Principles