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Technically they are correct. None of the Open Source licenses really regulate what happens on the server. When it’s not you running the binary, all the licenses are basically useless. AGPL is one of the few that address this a little bit, but even there you only get the source code itself, when the value in most online services is in the databases and backend stuff that you still don’t get to access with AGPL.

The Free Software world hasn’t figured out what to do with services running on computers you don’t own. GDPR is so far the only thing does something about the server side, but that’s EU law, not a license you can slap onto your software.

Actually, kind of not. FSF has a weird blindspot when it comes to backend stuff. They care about what runs on your computer, e.g. Javascript, but stuff running on a server that you don’t own they don’t really care about. The AGPL had to come from an outside third party, not the FSF themselves. The FSF has been pretty silent when it comes to making licenses to regulate the whole “cloud” space.

It’s one of the big reason why the FSF has been slowly driving away into irrelevancy. The modern computing world is all about servers and data flowing between them. And the FSF is continuing doing licensing like it’s the 1980s. They are so far behind that politics got there first with the GDPR. There is still no “GNU GDPR” that you can slap on your software to give people outside Europe similar rights.