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According to the Free Software Definition free software must fulfil 4 freedoms:
The freedom to run the program, for any purpose
The freedom to study how the program works, and adapt it to your needs. Access to the source code is a precondition for this.
The freedom to redistribute copies so you can help your neighbour
The freedom to improve the program, and release your improvements to the public, so that the whole community benefits . Access to the source code is a precondition for this.
The Open Source definition is similar, but some licences can qualify as open-source and not as free software. This is usually not an issue, because the majority of open source software out there is free as well. (And few people would like to create an open-source licence that’s not endorsed by the Free Software foundation.)
A software licence qualifies as a free software/open-source licence, if it allows those four freedoms. There’s still a lot of room to manoeuvre and to impose various restrictions, but otherwise these freedoms make them usable enough for the users and co-developers.