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Old 2nd January 2007, 23:25   #1
Omega X
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Antitrust: Apple Sued for Digital Music Monopoly and defective iBooks

http://www.dailytech.com/article.aspx?newsid=5525
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Shortly following news of Apple’s stock options backdating scandal, the Associated Press is reporting that the company is now facing several lawsuits, including one alleging that Apple is monopolizing the digital music market.

The lawsuit is over Apple’s proprietary iPod and iTunes software, which is generally incompatible with non-Apple products. Media purchased on iTunes is supposed to be playable only on iPod hardware, and songs purchased on other DRM systems are not easily playable on iPods.

Apple motioned for the courts to dismiss the case, originally filed July 21, but the courts denied the motion on Dec. 20. The plaintiff seeks unspecified compensation.

Apple is also facing a lawsuit, filed on Nov. 7, over the supposed high failure rate of the logic board in the iBook G4. Another lawsuit filed by PhatRat Technology accuses Apple of patent infringement for its iPod-**** product.

While the iPod reigns supreme in the music player market, Apple’s success has not come without a price. Last year, Creative Labs sued Apple over patent infringement of the iPod interface, which eventually lead to a countersuit. The companies eventually settled on having Apple pay Creative $100 million for use of the patented technology.

The popularity of the iPod has drawn attention from hackers discontent with the proprietary nature of the device. Jon Lech Johansen, who cracked DVD encryption, has undone Apple’s protection scheme and plans to license his work to companies interested in opening up interoperability between iPod/iTunes and non-Apple devices.
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Wow, it seems that Apple 2007 is going to be dark for sure.
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Old 2nd January 2007, 23:30   #2
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I've never understood when people try to persecute companies when they become too successful and are apprently 'monopolizing the market'.

Surely if a company is doing extremely well, then the other companies aren't doing something as good? I can understand the need for competition, but penalizing large companies doesn't seem to be a good way to create that competition, does it?
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Old 2nd January 2007, 23:52   #3
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IT doesn't matter whether or not they are popular. The law forbids Monopolies.

Obviously they got to Apple before any of the heavy abuse begun. Which is why they bust up Monopolies in the first place.
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Old 2nd January 2007, 23:55   #4
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The law actually forbids abusing monopolies, not monopolies themselves, if I remember correctly. In Apple's case they're using a monopoly on audio players to take over the market on online music sales.

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Old 3rd January 2007, 00:03   #5
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IT doesn't matter. Monopolies and abuse tend to go hand in hand.
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Old 3rd January 2007, 02:16   #6
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What exactly is apple monopolizing?
Certainly not music distribution.
Certainly not portable mp3 hardware sales.
Certainly not software audio programs.
This is stupid.


Suing apple because the 5Gen iPods don't have the battery life advertised:
Suing Apple for a successful business model:

I have an iPod, run Rockbox and buy most of my music in CD form off of Amazon. I put the music on my iPod with Windows Explorer.
Hell, running rockbox or iPodlinux isn't even a TOS violation.
I don't get this suit crap.


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Old 3rd January 2007, 08:31   #7
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shakey_snake:
They're using their ubiquity in one market to establish an artificial dominance over another, I think that that's pretty much what anti-trust legislation works against. Near-monopolies are not necessarily bad, they can often indicate just-plain-good business practices or products. But it is the abuse of a strong market position in one market to gain advantage in another which is legislated against.

Note how most lawsuits against Microsoft have been in a similar vein; Microsoft shipping some product with Windows and thereby making it the "standard" app for that purpose. Which is why there's versions of XP (and, I think, Vista) in the EU which do not include Windows Media Player; it was seen as an unfair segue into another market.

The fact that you can work around it (for Apple's: don't use DRM; for Microsoft's: install third-party apps) isn't really the point, since most people won't.

I'm not sure I agree with the legislation at all, but I'm not convinced this is anything but a valid use of it. The only real difference I can see between this and various high-profile Microsoft cases in the past is that Apple simply haven't had enough market share in the past to make their policy of vertical integration technically qualify as something illegal.

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Old 3rd January 2007, 09:26   #8
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Quote:
Originally posted by zootm
in the past is that Apple simply haven't had enough market share
They still don't.

However, the owners of the patents on the new legally mandated DRM schemes will soon.

Apple is the wrong target or perhaps part of the right target. One thing about ipod DRM is that it's not mandatory. I think the TV protection schemes (since they are mandated) would be in violation of Sherman Anti-Trust legislation.

Of course, M has been in violation of anti-trust laws for years, but with the worst lawsuit only costing them 750 million (Real Networks), this is like a traffic ticket for rape.
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Old 3rd January 2007, 09:32   #9
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Quote:
Originally posted by rockouthippie
However, the owners of the patents on the new legally mandated DRM schemes will soon.
DRM isn't legally mandated, it's legally protected. Which is still really, really dumb; it allows people to effectively set their own limits on law.

Quote:
Originally posted by rockouthippie
Apple is the wrong target.
I agree, content providers are the target if DRM is what you're wanting to attack, yeah. I don't think there's many legal avenues for that, though. The point here, though, is that Apple have repeatedly refused to allow other companies to use their DRM scheme (and have prosecuted and worked around those who have backwards-engineered it to allow people to buy DRMed media for iPods from other providers), so an argument can be easily made for them attempting to use their technology to limit the market for music purchases to users of their product.

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Old 3rd January 2007, 14:39   #10
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Quote:
Originally posted by zootm
Note how most lawsuits against Microsoft have been in a similar vein; Microsoft shipping some product with Windows and thereby making it the "standard" app for that purpose. Which is why there's versions of XP (and, I think, Vista) in the EU which do not include Windows Media Player; it was seen as an unfair segue into another market.

The fact that you can work around it (for Apple's: don't use DRM; for Microsoft's: install third-party apps) isn't really the point, since most people won't.
I don't consider that an abuse. An abuse would be for windows to not allow you to install competing media player software.

Also all of the decent media player software is free so it doesn't make sense to me in that aspect as well.
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Old 3rd January 2007, 15:04   #11
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Quote:
Originally posted by Mattress
I don't consider that an abuse. An abuse would be for windows to not allow you to install competing media player software.
Yes, well, exactly. There's a thin line between using your ubiquitous software to ensure that your other software is what everyone, or almost everyone, uses, and just wanting to provide more functionality as standard. A more-ridiculous one has been that part of the complaint of security companies with Vista is that the system comes with more security capabilities as standard, making a lot of what they provide far less useful. The initial refusal of Microsoft to give them enough information to write very low-level security stuff was more serious, though.

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Old 3rd January 2007, 16:52   #12
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Quote:
Originally posted by zootm
shakey_snake:
Note how most lawsuits against Microsoft have been in a similar vein; Microsoft shipping some product with Windows and thereby making it the "standard" app for that purpose. Which is why there's versions of XP (and, I think, Vista) in the EU which do not include Windows Media Player; it was seen as an unfair segue into another market.

The fact that you can work around it (for Apple's: don't use DRM; for Microsoft's: install third-party apps) isn't really the point, since most people won't.
I think most of Microsoft's problems have been that you couldn't uninstall or even get out of your face some of their programs (WMP and IE6). XP SP1 fixed some of those sorts of issues.
This however, is nothing like that.
(EU suits can be disregarded considering these suits are US based)


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Old 3rd January 2007, 17:15   #13
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Well, more specifically, US antitrust law is supposed to guard against vendor lock-in, and iPod's are clearly locked in to a single DRM music provider. The fact that DRM is junk that nobody should use is completely immaterial.

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Old 3rd January 2007, 18:19   #14
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Quote:
Originally posted by zootm
Well, more specifically, US antitrust law is supposed to guard against vendor lock-in, and iPod's are clearly locked in to a single DRM music provider. The fact that DRM is junk that nobody should use is completely immaterial.
Living in the US, I can honestly tell you that everything over here is specifically designed for Vendor lock-in. Mobile Networks, printer cartridges, bicycle parts (or pretty much any machine parts for that matter), Batteries for anything and everything, Cable packages, high-speed internet connection packages, credit cards, gas reward cards, gift cards, I could go on and on and on.
The point being, I don't understand why this specifically is any sort of issue at all.


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Old 3rd January 2007, 19:24   #15
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Very high-market share, I expect. Along with the fact that all the examples you cite the "lock-in" aspect is for consumables, whereas music is a bit different.

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Old 3rd January 2007, 19:44   #16
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heh, not with most of the music being released lately.
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Old 3rd January 2007, 20:08   #17
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Haha, touché!

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