From what I've read, it only applies to orgs that use pirated MS software, so where did you draw the conclusion about "using open source in their supply chain"?
"So how might this apply to open source? Well, consider a US carrier offering an Android handset: under the new laws, they would effectively be required to prove that not only did they not use any pirated Microsoft software, but that none of their suppliers did either. And given that many of those suppliers are likely to be in China, where piracy is not completely unknown, the chances that at least one supplier is in fact using the odd dodgy copy of Windows or Office is probably somewhat close to 1.
But it goes much further than Android. One of the biggest growth areas for Linux is consumer electronics. Many of the most exciting low-cost digital consumer products are running stripped-down and customised versions of Linux at their heart – and not Microsoft's Windows CE. Again, retailers and importers of those Linux-based systems would need to be able to prove that not a single one of their suppliers had a single pirated copy of Microsoft products anywhere. If they couldn't, Microsoft could effectively block the import of those products into the US states that have passed this new legislation."
First of all, I agree that the legislation is absurd - just to get this out of the way.
Your quote seems like a reasonable line of thought, but it's not exactly targeting open source, it's targeting users of pirated software. It could lead to some open source collateral damage, but OTOH it could lead to suppliers switching to opensource software. Why are they running pirated Windows anyway?
You have to ask what Microsoft's original intent was in lobbying for this legislation in the first place.
I can guarantee that Microsoft isn't going to pursue this sort of legal action against companies that are building products on Windows & Windows Phone 7.
It is yet another attempt on their part to impose a tax on companies that aren't building on their platforms & the prime target is clearly companies building on open source platforms specifically Linux & Android.
