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Psystar to countersue Apple for antitrust violations
- Thread starter macenforcer
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That's not true. Most if not all commercial upgrade versions require some proof of ownership of a previous version... either locating the application or a registration file on the HD, or entering a previous version serial number (Quark or CS), or even inserting the previous version install disc (older Macromedia software).
Monopoly is a much-abused and little understood term. As a purely economic state, it rarely actually exists. That is why antitrust law addresses issues of market power, which don't require a monopoly to exist. Tying one product to another is not an antitrust violation unless the company doing the tying is found to have and be abusing market power. If one product is naturally related to the other, this is generally not considered to be illegal tying. Forcing a consumer to buy one product they don't want along with one they do want can be considered illegal tying. Note that this can only really work to the advantage of the seller if the consumer has little choice but to buy the product, i.e., the seller has market power. Proving a case of illegal tying is a very tall order. It requires mountains of evidence and years in court.
Source?
But only if the products have no relation? That seems like a strange clause.
Source? According to wikipedia: "For at least three decades, the Supreme Court defined the required "economic power" to include just about any departure from perfect competition, going so far as to hold that possession of a copyright or even the existence of a tie itself gave rise to a presumption of economic power."
What's your argument here? In order to use OS X, you must agree to only install it on an Apple labeled computer. That is tying. You can call it a platform prerequisite if you like, but it's still tying.
How can you prove that the retail price of OS X is depressed, and that it isn't the case that the retail price of Microsoft Windows is inflated?
Which has nothing to do with whether or not you can "start fresh" on your computer. Requiring prior ownership is not the same as requiring prior installation.
As a legal matter, they are two separate and distinct concepts, and both very much exist. Antitrust law addresses both market power and monopolization, along with a plethora of other practices constituting unfair competition.
It is simply not the case, as you stated, that Apple must have a monopoly.
As a broad oversimplification, yes.
Yes, it can be, granting a number of assumptions. But that is not to say that it must be. I fail to see what this has to do with what you're responding to.
It's not tying if you're not forced to make a second purchase. Again, this is a distinction of subtlety--if the product is only offered to a set of people (in this case, Macintosh owners), it's not really tying because your purchase of the product is not barred by an obligation to purchase something else. OS X is simply not offered to the greater market, but instead as an accessory and add-on to their own Macintosh products. You must own an iPod in order to make use of an accessory with a Dock connector--but it's not tying, it's a prerequisite. Even if we grant the tying status, doing so is not itself illegal, either putatively or in fact. It falls as far, and no further, than promotional tying, which is not against the law.
The price of Windows has nothing to do with it. The retail price of OS X is depressed because its sales account for less than 1% of Apple revenue, and yet OS X development constitutes a far greater expense. Investor reports and compliance filings easily show these figures for corporations. OS X cannot sustain itself based on copies sold, and thus it cannot be said to be using its market power in an anticompetitive way.
On the other hand, if it were to drop the Mac requirement, it would be engaging in unfair competition, viz. predatory pricing.
Well, unfortunately I only have one source, but according to wikipedia yet again, tying can still be claimed even though you are not forced to make a second purchase. Everyone can buy OS X, but in order to use it you must agree to install it on a computer from a specific company, and if you don't have one, you're forced to buy it. Whether you are barred from purchase or forced to agree to not use the product on non-Apple hardware after the purchase doesn't seem particularly relevant.
If the license to the iPod software stated that you were only allowed to use Apple-labeled accessories it would be tying. The fact that you can install OS X on non-Apple hardware clearly shows that the Apple label is not a prerequisite.
OK, I can't find any reference to promotional tying anywhere, so I have no way of responding to that.
It does seem to suggest, that US law has no protection against tying, as you can always change an unlawful tying arrangement to a lawful one by tweaking the pricing scheme, even if the consumer is not benefitted in any way by this tweaking.
No, it can't. If there are not two products, it's not tying. Tying can occur when you're not required to make a second purchase at that time, but only where the purchase is a condition of sale.
No. If you don't have one, you can't use OS X. Same thing with a PS3 controller, a bike rack for a Passat, or map updates for a TomTom GPS.
Yes, but you're inverting the scenario. What you're saying is equivalent to Macs requiring you to use OS X.
Promotional tying is a class of models including preferred- and repeat-customer discounts, freebie bundled products, razor-blade business models, buy-one/get-one, loss leaders (in some forms), and similar practices. Essentially, where you get a favorable price due to a prior or contemporaneous transaction.
That's because tying is not itself illegal in the US or anywhere else. You can always change an anticompetitive practice into a permissible one by tweaking something, because the individual acts in question are legal until they cross the threshold into abuse of power. That's what makes antitrust law so complex.
Psystar's highly unlikely success here would be a Pyrrhic victory for just this reason--Apple would simply adapt, which in turn closes the door to hobbyists, whom Apple currently ignores and Psystar is hoping to screw over in order to sell them poorly-built crap. Apple's OS X upgrades are a service provided to their customers at or below cost. Another company hoping to profit at Apple's expense are seeking an untenable argument and hoping for an ignorant judge or sloppy defense work to make it happen, not because they think Apple is abusing its power, but because they're too lazy to create a better product and want to ride on someone's coattails.
There are two products, and I think I've made it abundantly clear that OS X and Apple Hardware are, in fact, separate. If you don't think so, at this point we're going to have to agree to disagree.
But that is not true. I can use OS X without having an Apple label on my computer.
Actually, the PS3 controller works with a PC.
True, but that is not because the car is labeled "Passat".
True, but that is not because the GPS is labeled "TomTom".
If there is no benefit for the consumer you're abusing power either way.
You don't get anywhere with a legal argument if you quote extracts from court decisions. Every single court decision is based on a combination of many different factors and an evaluation how all these factors worth together. Yes, Wikipedia might have found a court case where possession of copyright "gave rise to a presumption of economic power". You'd have to show us the _complete_ court case to be able to compare it with the situation at hand here. I don't think having copyrights on an operating system with about 5 percent market share would be any indication of economic power. Think about it: I possess the copyright on this post of mine. Does that give me economic power?
I don't know if you read Psystar's 54 page answer to Apple's complaint, but one defence that Psystar is using is that Apple never refused to allow them to install MacOS X on Psystar computers until Psystar was sued (that is apparently bad, they think Apple should have told them not to install MacOS X before suing and given them time to change their behaviour).
That means that Psystar never contacted Apple to get a license to install MacOS X, and therefore never gave Apple an opportunity to allow this or to refuse permission. In the PC world, nobody sells computers with Windows Retail versions; everyone contacts Microsoft and gets an OEM license for Windows. It would have been the natural thing to contact Apple, not only to check that everything Psystar does is legal, but also to try to get a better deal than buying the MacOS X retail version. At the very least you would expect to be able to buy MacOS X at wholesaler prices, like Amazon which most likely pays less than $129 for each copy of MacOS X.
And if they never contacted Apple and Apple therefore never refused to give them a license, their claim that Apple's refusal is anti-competitive has nothing to do with this case.
You are using lots of strange and confusing arguments. This whole argument is about "anti-competitive behaviour". Anything that is between Apple and their customers cannot be anti-competitive behaviour. Apple would never complain if lets say Dell does something that is bad for Dell's customers; Apple would see that as a competitive advantage and hope that customers switch (the same would go the other way around, I took Dell just as an example). One company might gleefully point out such a behaviour of another company, but they wouldn't sue them for it.
Actually, I don't have to do anything. If you think the assertion of the Wikipedia is wrong, I invite you to do your own research and look at the cases referenced.
Er, what? I'm using strange arguments? Look, I'm saying that if promotional tying work the way matticus008 says it does, then there is no such thing as unlawful tying, because any unlawful tying case you can show me can become promotional tying by tweaking the pricing scheme; It's still tying and the consumer hasn't really gained anything by the pricing scheme being changed, but somehow it is now legal. Therefore, I question matticus008's assertion that OS X + Apple labeled hardware is, at most, promotional tying.
Consider this: A company sell product A, which is desirable and product Z, which is not. In order to buy a measure of product A, you must buy five times that measure of product Z. Furthermore, let's say that all the other conditions are in place to make this unlawful tying.
Now, let's say the company lowers the price of product A but raises the price of product Z accordingly. Nothing have changed for the customer (they still pay the same overall price), but suddenly it is said to be promotional tying, which is said to be legal.
It seems extremly unlikely that there would be such an enormous loophole in the US antitrust law.
then go make the argument. but saying that Apple is acting as a monopoly over the ipod should not have, and probably won't have, any bearing on the OS issue. why? because it is two different markets.
but before you do it, better make sure that there are no other mp3 or digital audio players out there with a similar set up. no sony player that only talks to windows media player or such. because if you are going to sue one company for restricting the software on one box, you really should sue all of them or you'll look like you are just going after Apple cause it is Apple.
as for the itunes issue. if itunes for Windows is faulty complain about that as its own issue. I'm sure that something could be done cause from what I have read, some 80% of iphone sales are to Windows users and the iphone, like ipods, uses itunes. you could probably go class action if you picked the right course of action.
the issue is, what is the court going to call it. an answer I"m sure we'll be getting in the months to come
and the counter question. did Apple tell them that they could.
which I suspect will result in the countersuit being tossed out. and then after Psystar is judged on their breaking of the rules they can file a fresh suit if they wish. just not one that is being used to try to get them out of their initial behavior.
Ignatius is right--you don't have to be a lawyer to see how ridiculous psystar's arguments are and realize what the pizza delivery boys really are up to (if psystar actually won, would be out of business in a month since their contribution is zip/zero/nada, and everyone else can build/sell the same--at least until aapl restructures and raises OS price). But it helps to be a lawyer, and to understand how legal arguments really are made (and it ain't like on TV kids). And macsmurf quoting wikipedia and arguing with matticus008, who does understand the issue and know what he's talking about, is truly laughable. And thanks to the others here who tried to introduce common sense into macenforcer's nuisance thread which, in all liklihood, was started for no purpose other than to cause trouble.
I find that part funny too, matticus008's profile says he's a lawyer, he's got more legal knowledge than I could ever have (without going to law school) and what does macsmurf bring to the fight? Wikipedia? Come on, macsmurf, at least find some better sources. I know Harvard Law has a lot of info online, try looking there instead of wikipedia. Anyone can change wikipedia, and I don't think many lawyers spend their time making sure the info there is accurate.
Read the article in its entirety. You will see that tying is illegal only when it can be shown that the tying is an exercise of market power and when the products are not naturally related. The four-part test is explained. Note also that the selling of a patented or copyrighted product is not evidence of market power.
So we come back to "Apple is at fault for using the honour system". As I said previously, what a commentary it is on modern society that people fault Apple for not treating their customers as thieves.
Yes, but I am referring to the often confused economic and legal definitions of monopoly. In economic terms to possess a monopoly is to have absolute and exclusive control over a market. On these terms, monopolies rarely if ever exist. During the Microsoft antitrust trial, I had debates too numerous to count with people who insisted that Microsoft could not possibly have a monopoly because a person could always buy a Mac. So long as the consumer had any choice at all, so they argued, there was no antitrust case against Microsoft. Obviously this is not how the law works. The law talks of monopolization but it does so in terms of abuses of market power, and having market power to abuse does not require a dictionary-definition monopoly. Not by a long shot. For instance, back in the '50s GM was accused of abuses of market power for having and exercising the ability obtain the steel for their cars at a lower cost than their competitors. I believe their share of the auto market was around 40% at the time, but that was enough.
So for purposes of this and most other discussions about antitrust, I think it's helpful to dismiss the term "monopoly" since it's such a loaded word with multiple and poorly understood definitions. What antitrust law is about fundamentally is abuses of market power.
Jonathan Swift, yes.
Although the reference in the book to this quote was meant to be ironic.
"Although the reference in the book to this quote was meant to be ironic."
True. But that certainly doesn't diminish the accuracy and/or applicability of the quote itself (like a bucket of crawfish--you never need to put a lid on it because if one tries to crawl out, the others will pull it back down).
True. But that certainly doesn't diminish the accuracy and/or applicability of the quote itself (like a bucket of crawfish--you never need to put a lid on it because if one tries to crawl out, the others will pull it back down).