Psystar to countersue Apple for antitrust violations

[MagnusVonMagnum]

Instead of playing your childish name calling games, Matticus, let me ask you what you would think of this scenario.

Let's say Microsoft releases an update to Vista. In that update, they present EULA agreement that essentially say that if you agree to this update (or install) of Windows Vista, you also agree to only use Internet Explorer as a browser. You are not allowed to install 3rd party browsers such as Opera or Firefox. If you disagree, click here to terminate the update (or install).

Do you think such a Eula agreement would be legal and would stand up in court if then challenged? It's Microsoft's operating system and they only license you to use it, so if they want to corner the word processor market, all they have to do is state that users are not allowed to install any word processors except those made by Microsoft. The same could go for browsers, games, you name it. The sky is the limit. Microsoft own and controls Vista, so according to the logic you've displayed thus far in this thread, Microsoft is free to dictate any and whatever terms they wish regarding their operating system and you, the user have zero say in any of it except to refuse to use their product and thus go somewhere else (say to Linux).

If you say yes, they're allowed to do that, I'm going to think you're crazy if you think the Justice Department would stand for such anti-competitive behavior.

If you say no, they're not allowed to do that, then I have to ask you why you think it's OK for Apple to say that they can dictate what machine you install a full retail copy of OS X that you might purchase at a reseller like Best Buy when that is in fact also anti-competitive behavior. Either way, one of the two would be abusing Eulas to corner a market, be it browsers for Windows or hardware for OS X.

Of course, my personal interest in all this is because Apple refuse to offer a machine with the specs and expandability that is easily obtained for any other operating system for a reasonable price. I do not like the iMacs or Mac Mini and the Mac Pro is a professional level workstation computer and is priced accordingly. There is no consumer grade tower type workstation from Apple and so that leaves me with an unacceptable predicament. I can either hack my own or I can buy hardware I don't really like or I can go crawling back to Windows and forget about ever running Logic Pro 8 or Final Cut Pro. The sad part is there shouldn't be an issue like this. I should be able to purchase OS X from Apple and put it on any hardware I'd like to use it with that it supports, which is not that hard to do. All the arguments on here boil down to whether someone thinks a consumer should have that right or if they think that should be Apple's right to dictate. ALL of them come down to that. The law is Grey on these matters. It hasn't been tested in this exact manner. Similar, but not identical cases have ruled in favor of the consumer in the past. You refuse to acknowledge that despite proof offered on these forums.

You clearly prefer Apple to do anything it wants in the market place. I'm sure you are also the type that thinks it's perfectly fine to allow companies to move overseas to places like China, put Americans out of jobs and then send back products made with slave-labor type wages to sell to Americans at cutthroat prices which are aimed to put their competition that is still in the country out of business. We used to put tariffs on foreign goods to protect U.S. jobs. Republicans (which I'd wager you to be) are all for letting the rich and the companies they control do whatever they want in order to make profits for themselves at the top, even if it means running the country into the ground whereas people like myself believe the country needs to be protected from those that would destroy it for pure monetary gain.

Here, I see citizens being manipulated and denied choices in the market place for purely monetary gains by the few. Like politics, you either stand for the people the country is meant to serve by way of the Constitution an the Republic or you stand for the companies and the rich which only serve themselves. Like I said before and which you refuse to deal with--I can choose a different supplier for natural gas because it has been ruled that consumers must be allowed to choose from free competition, but yet I cannot choose a different supplier for hardware for OS X. The only reason you see a difference between the two is you don't believe that OS X is a unique commodity. You seem to think Windows and Linux constitute alternative choices, but choosing Electricity instead of Gas is not the same as being able to choose different suppliers of gas. I want Gas (i.e. OS X) and I should have a choice in suppliers of hardware for that gas. I should not have to buy an Apple hot water tank to use gas instead of electricity. Gas is a different commodity from hot water tanks, even if they are related and even if they do make hot water tanks for electricity that are fundamentally similar in design. A gas supplier should not be able to force you to buy their hot water tank in order to buy gas from them yet that is EXACTLY what Apple is doing with OS X. If you want the commodity known as OS X, you have to buy your generic Intel hardware from Apple. For the people's sake, I can only pray that the judge that decides this case can tell gas from a hot water tank because it's pretty clear some of you on here cannot.

 

[MowingDevil]

This statement is pure hogwash. I am so sick of hearing this. Apple need not support anyone, they do however need to remove the lock on the OS which PREVENTS users from installing it on non apple hardware. If they did that people would make the drivers and there would be no issue. Apple maliciously cripples the install of the OS on any system that does not contain an apple ID.

They often won't even support their own computers if you install an upgrade card. When I upgraded an old beige tower to a Sonnet G3 500 it met all the system requirements for the original OSX...but needed a patch to trick the computer into thinking it was a native G3. Bought it from Sonnet and ran OSX for a couple of years on that machine w/o a hitch.

I also had a Sonnet firewire/USB card in a PCI slot (that is what they were for right?)...and lo & behold, my iPod Shuffle wouldn't work. I met all the requirements w/ RAM, iTunes & USB...but no matter what I did it just wouldn't work. It showed up on my desktop & iTUnes 2 or 3 times but just froze when I tried to load the songs. Nice.

Obviously both of these issues were intentional to force me toward buying a new computer. Seems to be the general way most things work in this industry.

 

[IJ Reilly]

About a week ago in this ongoing debate, I provided a link to Judge Jackson's Findings of Fact in U.S. v Microsoft. I thought it would be educational to see how a successful antitrust case is argued, how the legal and technical facts are organized, etc.. How many posters in this thread bothered to make that short journey? Judging from the response, I'd say it was zero. The first few sections of the findings tell the tale pretty clearly I think, and also illustrate how positively hopeless Psystar's case is against Apple.

So here it is again:

http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm

Read and try to understand it, if you want your views on this subject to be taken seriously.

 

[Lord Blackadder]

Here, I see citizens being manipulated and denied choices in the market place for purely monetary gains by the few. Like politics, you either stand for the people the country is meant to serve by way of the Constitution an the Republic or you stand for the companies and the rich which only serve themselves.

You heard it here first - Hackintosh is the patriotic choice.

Magnus, you're coming off as totally ridiculous here, and you're going to look even more ridiculous when Psystar loses their case. You and Matticus are arguing in a knowledge vaccuum - read all the legal links! Those are what matters, not some ill-concieved sense of entitlement or flowery appeals to the Constitution and references to percieved rights you do not have.

This is not a personal attack, but you need to read the facts of this legal situation or else you're just whistling Dixie - emotional arguments aren't going to cut it in court.

 

[MagnusVonMagnum]

I also had a Sonnet firewire/USB card in a PCI slot (that is what they were for right?)...and lo & behold, my iPod Shuffle wouldn't work. I met all the requirements w/ RAM, iTunes & USB...but no matter what I did it just wouldn't work. It showed up on my desktop & iTUnes 2 or 3 times but just froze when I tried to load the songs. Nice.

Obviously both of these issues were intentional to force me toward buying a new computer. Seems to be the general way most things work in this industry.

I've got a Sonnet USB card in my PowerMac. iPods won't sync correctly if you use a hub, powered or not. You have to plug the iPod directly into a port on the back of the card. From what I've read, this is a common problem and it appears to sometimes apply to Apple USB ports as well. The thing is if you have a tower, particularly and older tower that has the ports only on the back, you are far more likely to be using a hub since USB ports on the back of it, if it's under your desk, aren't easily accessed for things you might only want to plug in temporarily. So it could be that you don't hear about it often with iMacs and laptops since the ports are easily accessed and you are less likely to be using a hub. That may not have been your problem, but it was the problem here. As long as I use the direct card ports, I have zero issues syncing.

 

[CWallace]

You heard it here first - Hackintosh is the patriotic choice.

If Psystar can't sell Mac clones, the terrorists win!

 

[charlituna]

Let's see all the replies I just read boil down to "Apple can do whatever it wants and if you don't like it, too bad. Go somewhere else." I will go somewhere else. I'll go to Psystar or even Dell in the future when Apples loses in court.

when Apple loses in court is a time that might not come. but if it does, it does.

that's kind of the point of the replies. that Apple might just win. because it may be determined that there was no illegal tying etc.

But when Apple does win, hats off to you for calling it right.

At this point, who knows how it will turn out. so why don't we all just stop with the debates over legal terms etc and see what happens.

lord knows with the new ipods out and the rumors about new computers we have enough to talk about anyway

 

[charlituna]

Psytar has failed to make a case right out of the box.

independent of the anti-trust issues I hope that Psystar is slapped for breaking the rules. yes the rules might be stupid but they were the rules of the time and the company should have respected them or gripped first. not used this suit as a way to get out of their own punishment.

 

[charlituna]

Instead of playing your childish name calling games, Matticus, let me ask you what you would think of this scenario.

Let's say Microsoft releases an update to Vista. In that update, they present EULA agreement that essentially say that if you agree to this update (or install) of Windows Vista, you also agree to only use Internet Explorer as a browser. You are not allowed to install 3rd party browsers such as Opera or Firefox. If you disagree, click here to terminate the update (or install).

two different things.

your example is using an operating system to force non operating system software on someone.

THAT is illegal, which is why Microsoft lost that action. because it is two different markets.

You claim that hardware and the OS are two different things. but they aren't. by their nature they are tied. because without an OS, hardware is just a pile of metal, plastic and wires taking up space on a desk/table/shelf. you can't have one without the other.

and even without the whole Apple hardware issue, psystar didn't ask for a multiuser license to put the software on their computers. so they should get slapped for that if nothing else.

meanwhile, you keep saying that folks should shut up and wait to see what the courts decide. why don't you. instead of dragging out the same comments over and over. can it and see what happens in court.

 

[matticus008]

Instead of playing your childish name calling games

...you keep saying this, but you've yet to be called a name.

Let's say Microsoft releases an update to Vista. In that update, they present EULA agreement that essentially say that if you agree to this update (or install) of Windows Vista, you also agree to only use Internet Explorer as a browser. You are not allowed to install 3rd party browsers such as Opera or Firefox.

1. Microsoft can't make any such condition, having already been convicted of abusing monopoly power.
2. No parallel exists to the Apple situation, so your example means nothing. Microsoft is free, however, to state in the terms to IE that you may only use it on a Windows PC.

Microsoft is free to dictate any and whatever terms they wish regarding their operating system and you, the user have zero say in any of it except to refuse to use their product and thus go somewhere else (say to Linux).

Yes, that is true, right up until they abuse either market power or monopoly power.

If you say no, they're not allowed to do that, then I have to ask you why you think it's OK for Apple to say that they can dictate what machine you install a full retail copy of OS X that you might purchase at a reseller like Best Buy when that is in fact also anti-competitive behavior.

Because Apple has neither market power nor monopoly power to abuse, and even if they did, restricting one's own product to their own customers of a naturally related product is completely legal as long as there are competitors on the market.

Either way, one of the two would be abusing Eulas to corner a market, be it browsers for Windows or hardware for OS X.

No. There is no "hardware for OS X" market--there's an Intel PC hardware market, and Apple is not even close to cornering that, at about 8% US share.

All the arguments on here boil down to whether someone thinks a consumer should have that right or if they think that should be Apple's right to dictate.

No. What it comes down to is that the law doesn't work like that. Antitrust law isn't about what the consumer "should" be able to have, nor is it about filling in gaps in the market, whether they're arbitrary or not. It's about preventing companies from competing with your products. Neither OS makers nor hardware makers are prohibited from offering a more desirable competitor.

Similar, but not identical cases have ruled in favor of the consumer in the past.

Not operatively similar. That's the whole point. It has been thoroughly debunked.

Republicans (which I'd wager you to be) are all for letting the rich and the companies they control do whatever they want

You could not be further from the truth--I've introduced Gavin Newsom at events. This isn't political, it's economic, and it's a grave error to conflate the two, but I can't say I'm surprised. This is simple reality. We can pass laws about environmental protection, and we can pass laws about labor. You can't force a person to make, sell, or support something that you want using the law (except discrimination laws). It's an absurd notion.

You can use economic pressure. The law steps in when the economic pressure has no influence, and only there.

I want Gas (i.e. OS X) and I should have a choice in suppliers of hardware for that gas.

All desktop operating systems for Intel-based PCs are "gas"--you want a particular company's gas blend. There's no separate market for a single product where others work on the same platform--even your cherished and thoroughly flawed Data General tells you that much.

 

[MagnusVonMagnum]

...you keep saying this, but you've yet to be called a name.

You don't have to call someone a name directly to implicate it and you've more than gone there.

1. Microsoft can't make any such condition, having already been convicted of abusing monopoly power.

Oh? I thought that was reversed in an appeal, well, unless you count Europe. They don't much like Microsoft there.

No. There is no "hardware for OS X" market--there's an Intel PC hardware market, and Apple is not even close to cornering that, at about 8% US share.

So basically, everything you're saying comes down to your PERCEPTION that there is no "hardware for OS X" market. The thing is, if you want OS X, then that market suddenly becomes very real indeed. If you're going to say there is no market because there is only one player in that market, then you've proven my point yet again. If you want OS X, you have to buy not only it from Apple, but the Intel PC hardware as well, but ONLY because Apple says so in a Eula.

You're trying to tell me that there is only one Intel PC hardware market and that Apple is simply a player in that market. But everyone else in that market sells hardware. What OS is installed on that hardware is arbitrary. Dell will sell you a PC with Linux on it. Dell will sell you a PC with Windows on it. You can even ask Dell for a PC with NO operating system on it. Dell doesn't make operating systems. Microsoft doesn't make computers. They are separate markets.

Charlituna said that the Operating System and Hardware ARE one and the same market because the hardware is useless without the operating system. That's like saying a car is useless without fuel, but that doesn't mean you have to buy your fuel from the person that sold you the car. I can and did buy computer hardware WITHOUT an operating system. I bought my operating system of choice at Office Max and downloaded a secondary operating system off the Internet. They were not one and the same in any sense of the word. I could start writing my own operating system if I chose (there are projects out there doing just that). The hardware is made of material. Software is a bunch of ones and zeros. They are not the same in any sense of the word.

No. What it comes down to is that the law doesn't work like that. Antitrust law isn't about what the consumer "should" be able to have, nor is it about filling in gaps in the market, whether they're arbitrary or not. It's about preventing companies from competing with your products. Neither OS makers nor hardware makers are prohibited from offering a more desirable competitor.

And I've been trying to get it across to you that Apple IS preventing companies from competing with hardware for OS X. But you don't believe such a thing exists. I guess OS X is a cerebral implant or exists in the air currents or something since it apparently doesn't need hardware to run. Does Apple's hardware have something special about it that someone else can't duplicate like the Amiga had custom chips? No. It's all generic Intel hardware. The ONLY thing stopping someone from installing OS X on a PC from Dell is Apple's EULA, which is an entirely artificial construct that has one purpose and that is to prevent all competition for hardware sales for OS X since hardware is where Apple makes most of its profits. If Apple had to sell its computer hardware without OS X and compete directly with Dell and Lenovo for sales with Windows and Linux, Apple would not be selling many computers, IMO. All-in-ones aren't very popular in the Windows World. But you are telling me they ARE competing in that market, even though they do not offer Windows or Linux or a machine without an Operating System as everyone else does offer. The only sell OS X based machines and no one else is allowed to sell OS X based machines. So they don't have to compete for hardware sales from anyone that wants to run OS X. Even though that is a FACT, you want me to believe that market doesn't exist for some reason.

You can't force a person to make, sell, or support something that you want using the law (except discrimination laws). It's an absurd notion.

The thing is no one has made Apple sell OS X separately. They chose to sell it at Best Buy in full retail form. That allowed Psystar to purchase it and install it on their machines without any copying or cloning of proprietary software. If Apple required proof you own a Mac or limited to upgrades, etc., Apple would have a much easier time proving wrongdoing. The only thing Psystar is certain to have violated is the Eula that says it cannot be installed on someone else's hardware than Apple's.

All desktop operating systems for Intel-based PCs are "gas"--you want a particular company's gas blend. There's no separate market for a single product where others work on the same platform--even your cherished and thoroughly flawed Data General tells you that much.

You're just playing with comparison perception now. You think Windows is an acceptable substitute for OS X so the hardware is irrelevant. But I know whether I run Leopard on a PowerMac G4 or Quad G5 or an Intel Core Solo or Intel Core Duo, it's the SAME OPERATING SYSTEM. Only the speed of certain operations, storage capacity, etc. varies. Those are different computers. So this idea that OS X and the hardware it's running on are one and the same is simply preposterous.


As for waiting to see the outcome, that's fine by me. I'm sick of this argument. Neither your opinion or mine will matter in that regard. But trying to play this perception of "there is no market for OS X hardware" is just ludicrous to me. Apple is making a fortune in that non-existent market and they're getting 100% of the pie for that non-existent market (save those Psystar sales and the Hackintosh community out there). It's why they're so profitable right now when everyone else is seeing economic hard times. They don't have to compete for hardware sales, only software sales because no one else is ALLOWED to run their software.

The thing of it is, IF some of you are right and a Mac is the sum of the hardware + software experience, then Apple never had ANYTHING to fear from Psystar, because NO ONE would buy a computer from them since it's not really a Macintosh. But apparently Apple DOES feel threatened in their non-existent market or they wouldn't be suing in the first place. Psystar purchased the OS. Nothing was stolen. A Eula was broken. That's it. The question is whether that Eula is legitimate or not. If the part about it not being allowed to be installed on anyone's hardware but Apple's is seen as anti-competitive, that is, it prevents anyone else from competing with Apple's hardware sales, which only feature OS X, then Apple loses. If they see OS X as irrelevant and therefore a non-existent market, then Apple wins. But then if it's so irrelevant, why did they need to sue? It IS relevant and the market DOES exist and it's quite profitable for Apple when they don't have to compete on the hardware side, which again is the side where they make most of their profits.

 

[IJ Reilly]

Oh? I thought that was reversed in an appeal, well, unless you count Europe. They don't much like Microsoft there.

No, it was not reversed on appeal, it was upheld on appeal. Sadly the Bush administration decided to snatch defeat out of the jaws of victory and formulate an essentially useless consent decree, so for most intents and purposes, they skated on the federal charges. However the Findings of Fact in the case (still unread by everyone in this thread, apparently) provided the basis for numerous antitrust lawsuits against Microsoft, the settlement of which cost them billions.

 

[Rodimus Prime]

See people keep saying that about the OS but some thing people are going to rememeber is on another front apple is getting dangrouslly close to hitting monoply size for mp3 player market and how they linked iPod with iTunes and the iTMS store so I for see a battle coming there and that is where M$ losing its antitrust is going to be used against apple.

As for here I hope apple loses but that is because I hate apple current desktop line up and want to build my own. I just do not see apple losing.

 

[matticus008]

So basically, everything you're saying comes down to your PERCEPTION that there is no "hardware for OS X" market.

Correct. As you've said yourself, there is nothing special about Macs compared to machines from other vendors.

But everyone else in that market sells hardware. What OS is installed on that hardware is arbitrary.

Precisely the point. So long as you can acquire both competing hardware and competing software, you're in a functioning market.

And I've been trying to get it across to you that Apple IS preventing companies from competing with hardware for OS X.

No, they're not, and you admit it: "Does Apple's hardware have something special about it that someone else can't duplicate like the Amiga had custom chips? No. It's all generic Intel hardware."

The thing is no one has made Apple sell OS X separately. They chose to sell it at Best Buy in full retail form. That allowed Psystar to purchase it and install it on their machines without any copying or cloning of proprietary software.

These are the most reprehensible arguments of all: failure to use DRM schemes, invasive sales procedures, and forms of electronic surveillance are good things for the consumer. You are trying to make it such that a company must stop you from breaking the law. It's outrageous. You claim to favor consumer rights, yet are inviting the biggest expansion of DRM to date.

All of your ramblings stray from the essential point: there is a law allegedly broken. The requirements of that law, however, clearly point to a situation in which the allegation fails--because the relevant markets, even as defined in the most friendly case, still exclude the constructs offered by Psystar. In the markets as they exist, Apple has no market power. If you don't have market power, there is no possible way to be prosecuted for illegal tying. Even with market power, for tying to be unlawful it must prevent the fair competition of competing products--OS X is not sufficiently ubiquitous that hardware vendors are being squeezed out; indeed, 95% of customers lie at their feet. Limiting OS X to their own customers is a competitive move that prohibits them from attaining market power, keeping them out of the bulk of economic power-based antitrust law. You have continually misconstrued definitions and standards to the point of making a totally unrecognizable argument, and have done so in a tedious and uninformed fashion.

The absence of a perfect product for you is not the absence of a competitive market; it's the market saying it doesn't care enough about you to offer your perfect product. Windows could make itself more appealing to you; the open source community could look to meet your needs by making something even better than OS X. Apple, by controlling their own product, isn't preventing anyone from offering something that meets your needs, and that's the bottom line of this whole issue. You can no more call that anticompetitive at law than Audi declining to offer hybrids in the US. You can't always get what you want.

 

[MagnusVonMagnum]

Correct. As you've said yourself, there is nothing special about Macs compared to machines from other vendors.

Precisely the point. So long as you can acquire both competing hardware and competing software, you're in a functioning market.

You can acquire both SEPARATELY, but they won't work together and together is the whole point. If my generic Intel hardware cannot (or more to the point isn't allowed to) run OS X then what's the point of buying that hardware if that's the operating system I want to run and/or have software for or a need to run software with for whatever reason (e.g. work)? How can Dell's hardware "compete" with Apple's hardware if Dell's hardware cannot run the same software? You yourself said it's the SAME MARKET, but "the same" means it runs the same stuff. Sorry, but your argument doesn't hold water or make logical sense. If my needs or desires require me to to use OS X, then there is no competition between Dell and Apple hardware because the Dell machine won't fit my needs no matter how much better suited their hardware is. It won't run OSX so it's useless to me. So even though it's technically the same hardware, Apple's Eula makes it worthless. So like I said, there is NO COMPETITION between Apple and Dell, etc. because there is NO overlap between the operating systems they use. Apple gets your money every time if you need the Mac OS because Dell, Lenovo, etc. aren't allowed to compete with that hardware that can run Mac software. Apple, however, is free to sell Windows PCs so they can compete with THAT market, but Dell can't compete with the Mac market (and by Mac market, I mean those desiring to run OS X).

You disagree all you want, but when they can't run the same software, they're not the same hardware market. Lenovo competes with Dell because you can compare your needs by hardware alone. The OS is not part of the equation because it's available for both. But because Apple says you can't use OS X with a Dell, what good does it do to compare the hardware unless you don't care what OS you're running? The OS is kind of important, is it not? Isn't it the reason you choose to buy a Mac in the first place? Or is it because you like cutesy things like having a computer in the back of a monitor? I want OSX. I couldn't care less whether I get the computer hardware from Apple or someone else so long as it meets my needs and the problem with Apple the past few years is they are ignoring large segments of the market (lack of GPUs and/or expansion in the consumer level models). That's what created the market for Psystar in the first place.

Now I know you don't agree, but that's life. it doesn't change reality or give the consumer any more options or Dell a chance to compete directly with Apple's hardware. Beyond that, I'm done arguing about something you refuse to look at or admit. In fact, I couldn't care less what you believe.

 

[IJ Reilly]

In fact, I couldn't care less what you believe.

Perfect. I have noticed that you are completely immune from arguments that contradict your position, so the fact that you could not care less about what anyone else thinks has been obvious for some time.

 

[matticus008]

You can acquire both SEPARATELY, but they won't work together and together is the whole point.

Now you're just back to the "one market". Hardware is not software, and one has no bearing on the other. You are failing to understand the consequences of your own statements.

Because the hardware and the software are separate, they must be analyzed separately. What licensing agreements are available softwarewise is completely irrelevant.

You yourself said it's the SAME MARKET, but "the same" means it runs the same stuff.

And it does. The hardware is, as you know, Intel-compatible hardware.

So like I said, there is NO COMPETITION between Apple and Dell, etc. because there is NO overlap between the operating systems they use.

Patently false. Not only is there competition in the hardware market, but there is substantial OS overlap: Linux runs on all of them; Windows runs on most of them; OS X runs on some of them.

You disagree all you want, but when they can't run the same software, they're not the same hardware market.

You can hand-wave all you want, but hardware and software are two separate markets. You've admitted that much, and now you must live with the consequences: the software can't be considered in a hardware analysis. Whether a particular hardware manufacturer is licensed by a particular software maker has no relevance to the merits of the hardware.

Beyond that, I'm done arguing about something you refuse to look at or admit. In fact, I couldn't care less what you believe.

It's quite plain that I've not refused to look at what you're saying--you seem to be confusing yourself for me. I'm saying that your egregiously inaccurate descriptive analysis and your completely unacceptable and baseless "legal" argument does not unfair competition make.

There was not much of an argument to begin with, since the situation is relatively clear--it was just ninety rounds of foot-stamping about Apple not selling what you want and that anyone who points out the obvious, that Apple has no obligation to make your perfect product, is some combination of a fanboy, troll, refusing to "listen", or Republican.

 

[MagnusVonMagnum]

Now you're just back to the "one market". Hardware is not software, and one has no bearing on the other. You are failing to understand the consequences of your own statements.

That is quite possibly the most ridiculous single statement I've EVER heard anyone say anywhere and makes everything you've said up until this point suspect. They have NO BEARING on the other? The fact you have to buy hardware from Apple to get their software has a HUGE BEARING on the other. It's how they make their profits. This isn't an opinion. It's a well known fact.

But since as you admit they are separate markets, you've yet again reinforced that they should be treated separately, which means Apple should not be allowed to confine OS X to their own hardware since their hardware and software products are different markets and any ties between them are technically arbitrary and therefore only for Apple's gains by avoiding competition from other hardware makers. This proves Apple is actively trying to prevent open competition. Sorry, but either way your arguments fail. You've just made Psystar's case for them. Congratulations.

 

[matticus008]

They have NO BEARING on the other? The fact you have to buy hardware from Apple to get their software has a HUGE BEARING on the other. It's how they make their profits. This isn't an opinion. It's a well known fact.

And yet you keep coming back. Their product strategy is a well-known fact. Your inability to grasp the fundamental components of the law allegedly violated is also a well-known fact.

If you separate the economic markets, you must analyze the economic market. What is the hardware? It's a fully compatible, Intel-based personal computer. That's it.

You're talking about the product and the totality of its features. That's entirely outside the scope of the discussion. If you're talking about HP hardware, Windows is not a factor. If you're talking about the complete HP Pavilion package, that's something else.

You simply must stop randomly (and inconsistently!) conflating these concepts for the sake of a personal argument not based in fact, law, or reason.

But since as you admit they are separate markets, you've yet again reinforced that they should be treated separately

You're the one refusing to do so.

which means Apple should not be allowed to confine OS X to their own hardware since their hardware and software products are different markets and any ties between them are technically arbitrary

"Arbitrary" is not an actionable standard. Further, different markets do not require different products. Indeed, most products contain components from several different markets.

This proves Apple is actively trying to prevent open competition.

No, Apple is competing by presenting a different package. Other manufacturers are free to do the same, and Apple, having borne the costs of the entire venture, is not engaging in an illicit agreement to restrain others.

Sorry, but either way your arguments fail.

Only if you don't have even an inkling of an idea what antitrust law is. You can't even be consistent in your misinterpretations, and you're talking about failing arguments? I think not. Tying is not itself illegal; it rarely is even as a component of something else. When defining a market as separate, you cannot include the elements of other markets as you insist on doing. On one hand, you criticize a poster making a "one market" claim, but then you use the exact same logic in your screed here--OS X has nothing to do with an electronic hardware market.

You can continue to post your gibberish, but I assure you, I will continue to respond as long as you insist on making these fabricated claims.

 

[TiggsPanther]

Matticus, as you seem to have a good grasp of law I have a few questions you may be able to shed some light on.

What main points do both sides have going both for and against them? And if either side wins, what do you think would be the possible outcomes?

Also, even if Psystar do successfully countersue Apple for anticompetitive practices, is it really likely to get them off the hook or are they still at risk of being found guilty of breach of license or whatever it is they're up for?

It also seems to me like, whatever the outcome, this is likely to have repercussions for the forseeable future. Is that probable, or am I missing something?

 

[IJ Reilly]

That is quite possibly the most ridiculous single statement I've EVER heard anyone say anywhere and makes everything you've said up until this point suspect. They have NO BEARING on the other? The fact you have to buy hardware from Apple to get their software has a HUGE BEARING on the other. It's how they make their profits. This isn't an opinion. It's a well known fact.

But since as you admit they are separate markets, you've yet again reinforced that they should be treated separately, which means Apple should not be allowed to confine OS X to their own hardware since their hardware and software products are different markets and any ties between them are technically arbitrary and therefore only for Apple's gains by avoiding competition from other hardware makers. This proves Apple is actively trying to prevent open competition. Sorry, but either way your arguments fail. You've just made Psystar's case for them. Congratulations.

You are still on the completely wrong track. By your logic, just because it is technically possible to run OSX on generic PC hardware, Apple must allow it. Of course this is absolutely not the case. It would be technically feasible to clone a Honda Accord, even using many of the same parts Honda uses. So why is it not an antitrust violation for Honda to not allow it, and also to insist on selling you all of those parts bundled together in one car? I mean, isn't that just "technically arbitrary?"

The fundamental problem with your reasoning is with the question of defined markets. You don't seem to understand that for purposes of antitrust law, markets are not defined by one product. If this was the case, then every product sold would be a separate market. Obviously it doesn't work that way, or every proprietary product sold would be a violation of antitrust laws.

Read those Findings of Fact yet? Or do you really prefer to argue in a vacuum?

 

[matticus008]

What main points do both sides have going both for and against them? And if either side wins, what do you think would be the possible outcomes?

Well. Let's start at the beginning.

For tying to be illegal, you must find a number of conditions satisfied:
1. There must be substantial interstate commerce involved (this is never actually an issue, but because the Sherman Act is based on the Commerce Clause, there is no federal jurisdiction without it).
2. There must be two separate constituent products in the "tie".
3. There must be tying in fact. The purchase of one product must require the purchase of a non-naturally related product. This is where people tend to get confused.
4. The seller must have sufficient economic power (in the case of tying, market power), and be leveraging that power in order "appreciably restrain trade". A copyright or patent is not sufficient to establish market power in 2008. It was an unresolved question until the late 1980s.
4a. Market power must reside in the tying product (in this case OS X), and as an Intel-compatible, consumer-oriented, desktop-class operating system with a ~7% US market share, that's quite clearly not the case. In the PPC days, you'd have a better market power case, and you'd look a lot more like Data General (but even there, far from a slam dunk).
5. Vertical restraints not based on price (this situation is one of them) must be analyzed under the Rule of Reason and are not per se illegal. This means that the totality of the situation must be considered, and only if the tie unreasonably prevents competitors from selling their products in fair competition will the tying be found an antitrust violation.

This is a very high bar, quite intentionally, because as evidenced by uninformed arguments made here, a lower bar invites claims that features unique to one product are anticompetitive, when exactly the opposite is true. We want companies to innovate, to make distinctive products with unique desirability, because it encourages competition. Company A makes something prettier, so Company B makes theirs faster, which in turn makes Company C make theirs cheaper. OS X is clearly in constant competition and endless comparison with Windows and the flavors of Linux. Macs are endlessly compared against the features, appearance, and reliability of Dell and HP and Alienware.

Psystar's argument relies solely on the definition of the market being sufficiently constrained to give Apple market power. It also relies on a judge being asleep at the wheel when it comes to the second purchase part of the tie, because a platform prerequisite has not been held by the courts to be a second purchase, but rather a prior purchase that is fundamental to the market of accessories, add-ons, and upgrades.

Apple has on its side the general presumption: their business decision is not a violation of antitrust law until it is found to be not only a tie, but one with market power, an abuse of that market power, and the effect of preventing competitors from succeeding in the market. Apple also has its business justification: it offers OS X as a distinguishing feature and a competitive edge for its Macs, and the sale of Macintosh units is what funds OS X development; OS X, unlike RDOS, is not a self-sufficient product. This makes the two not only naturally related, but easily passing the rule of reason analysis.

Psystar would counter with Data General dicta that Apple could sell its OS at a price that covered the difference. However, that only becomes a valid discussion after a finding of actionable tying--and even then, both the facts and the understanding of the industry are quite different today, so there's at best a 50/50 chance of whether that rationale would hold.

But Apple does not have market power. They quite clearly do not dictate prices for anything but their own products. They do not price their products outside the market range. They prevent no one from making a computer or from developing an operating system.

Also, even if Psystar do successfully countersue Apple for anticompetitive practices, is it really likely to get them off the hook or are they still at risk of being found guilty of breach of license or whatever it is they're up for?

Unfair competition is not a defense to copyright infringement. In a vacuum, a victory would permit Psystar to license OS X in the future, but it would not absolve them of their existing liability. A court is not friendly to a company who made no overtures for licensing, who dared the copyright owner to sue them, and who made no efforts to find a legal resolution before acting in violation of copyright and contract law.

And since we're not in a vacuum, the end result is that Apple would adjust the availability of OS X such that it triggered no market action, which would involve it not being sold off the shelf as we see it.

Even if Psystar were to win, Apple would raise the price of OS X to a cost-recovery level, which has a harmful overall effect for consumers, since we'd all have to pay considerably more for each OS X upgrade.

Their conduct is clearly not one of consumer protection, but rather the exact form of competition the United States hates: a company waiting for someone else to do the work and lay out the cash, who then offers the same product at a better price--because they had none of the initial costs. It's parasitic profiteering and nothing more.

 

[gnasher729]

Even if Psystar were to win, Apple would raise the price of OS X to a cost-recovery level, which has a harmful overall effect for consumers, since we'd all have to pay considerably more for each OS X upgrade.

Microsoft sells identical versions of Windows at different prices with different licenses as "OEM" products and "retail" products, and nobody seems to challenge them about it and nobody seems to challenge the validity of the licenses. If - for arguments sake - Apple were forced to offer licenses for MacOS X to computer manufacturers, then I cannot see any reason why Apple wouldn't offer the same product for different prices with different licenses.

 

[matticus008]

Microsoft sells identical versions of Windows at different prices with different licenses as "OEM" products and "retail" products, and nobody seems to challenge them about it and nobody seems to challenge the validity of the licenses. If - for arguments sake - Apple were forced to offer licenses for MacOS X to computer manufacturers, then I cannot see any reason why Apple wouldn't offer the same product for different prices with different licenses.

This case is a direct challenge to that model--that the simple act of selling off the shelf precludes any restrictive eligibility requirements, according to Psystar. Psystar claims that Apple cannot restrict its product in that way, period. In order to find for Psystar, a court would have to find that Apple cannot sell OS X at retail to its own customers. All OS X licenses are OEM licenses (where "OEM" means requiring a particular hardware product to qualify)--a Psystar victory based on their cause of action would require Apple to drop the distinction entirely.

The implication would then be that OEM deals are anticompetitive because not all possible manufacturers are eligible for them. This is in part why a Psystar victory is practically unfathomable.

 

[MagnusVonMagnum]

Your conclusions are ridiculous, Matticus. All the court has to find is that Apple's Eula is in violation of anti-trust behavior by preventing all competition for Macintosh computer HARDWARE by not allowing competing hardware to function as a Macintosh, which is a software state, not a hardware state. This would invalidate that part of Apple's Eula and Apple would no longer be able to restrict installation of its operating system to Apple labeled products. If OS X is underpriced or undervalued, then let them raise the price. A $400 OS X + a $1200 mini-tower using parts of our choosing is still better to some of us than a $2400 cut-down MacPro that doesn't meet our needs.

That is not only logical, it's FAIR. If Apple's hardware designs are so ergonomically and every other way superior to the other hardware out there, let their hardware compete against the Dell and Lenovos of the world, not hide behind artificial walls of market protection. If an iMac is so great, let it compete with a Dell mini-tower. Right now, Apple's hardware isn't competing against Dell or anyone else except Psystar because no one else's hardware can function as a Macintosh--that is run Macintosh software. The Macintosh hardware market has no competition. You can argue their operating system, which is SOFTWARE (which you yourself said is a DIFFERENT market with supposedly "NO BEARING" on hardware) has competition in the form of Windows, Linux and other Unix varients, but the inability to function as a Macintosh effectively nullifies all other hardware vendors as competition to their computer offerings. If such vendors had no interest in selling Macintosh hardware, it would be irrelevant, but Dell has indicated an interest and Psystar showed an interest by selling them and by selling them, it proved OS X is just an operating system, not an all-in-one hardware/software solution or embedded operating system. ALL your other suppositions are simply wishful thinking that reality is based on a flat world where the Mac isn't a market because Apple says it's not. Frankly, though, it doesn't matter how you see it or even I see it, but how a judge sees it.