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In April, IBM began spray-painting Linux advertisements on the streets of San Francisco, New York, Boston and Chicago, hoping to raise interest in the open source operating system. However, the logos - a peace symbol, a heart shape and Tux, the Linux penguin mascot - annoyed city officials.
"It is the worst message that can be sent to have a corporation sanction vandalism on city streets," said Gavin Newsome, supervisor for San Francisco city and county. "It is contrary to what we are trying to do, which is to add to the beauty of San Francisco and make a clean place to live."
IBM has already pledged $1bn to help support the growth of Linux, but the company will have to add at least $120,000 to that as compensation for the marketing campaign. The vendor will pay $10,000 in clean-up costs, close to $10,000 in city attorney's fees and $100,000 to San Francisco's Clean Streets programme.
IBM has reached tentative deals with all the cities involved, with compensation varying widely in each case.
IBM had initially refused to tell city officials the names of the local advertising companies they hired to paint the logos, Newsome said. The city, however, refused to back down and even instituted new legislation to help it pursue this type of vandalism more aggressively, he said.
"We were sticking to our guns," Newsome said. "I had no interest in settling for anything less than $100,000."
The city counted up 308 locations where the graffiti was spotted. Each sighting would normally cost IBM a $500 fine and a misdemeanour charge, Newsome said. If the city had given IBM the same punishment it usually reserves for rambunctious adolescents, it would have cost IBM $154,000 alone in fines.
IBM declined to comment on the matter.