There are multiple definitions as to what constitutes a 'monopoly.' There's Microsoft's Windows. Apple's iPod ecosystem. Merriam-Webster's definition. And the legal definition. Has Apple created a monopoly?
Yes. What goes around, comes around. Apple’s iPod ecosystem, which includes the ubiquitous iPod, iTunes on Mac and Windows, and the iTunes Music Store, is truly a monopoly.
Or, nearly a monopoly. Or, could be proven to be a monopoly. Or not. That’s how law seems to work these days.
Thomas Slattery sued Apple Computer, claiming the iPod is configured so that it will only play music from iTunes Music Store and not music from other online stores.
In short, Apple is facing a number of federal and state antitrust claims, and a California judge has ruled that the plaintiff (Slattery) in this case has met the qualifications which assert a “tying” claim.
The case may now proceed as a monopolization claim under the federal Sherman Antitrust Act and other claims for violation of California’s antitrust and unfair-competition laws.
Microsoft chairman Bill Gates must be smiling. RealNetworks CEO (former Microsoft employee) Rob Glaser probably helped himself to another jelly doughnut.
The judge noted the basic facts: Apple has an 80-percent market share for online music sales, and more than 90-percent of the market for portable hard-drive music players.
According to Merrium-Webster (the only authority who would comment), there’s a non-legal definition for ’monopoly‘:
Function: noun
Inflected Form(s): plural -lies
Etymology: Latin monopolium, from Greek monopOlion, from mon- + pOlein to sell
1 : exclusive ownership through legal privilege, command of supply, or concerted action
2 : exclusive possession or control
3 : a commodity controlled by one party
4 : one that has a monopoly
If Windows is a monopoly at 90-percent of operating systems on PCs, then Apple can have a near-monopoly on portable music players and online music sales with the iPod’s ecosystem.
But a monopoly does not illegallity make.
The issue is how Apple wields that monopoly and both the plaintiff and the judge in the California case think Apple may need to loosen the iPod’s ecostrings.
It’s the whole ’closed system‘ perspective that seems to continue to haunt Steve Jobs and Apple. Granted, the iPod ecosystem works very well. No one else has bettered the mousetrap.
That’s the point. It’s a trap. Mostly. Once you buy an iPod, you’re pretty much obligated to use iTunes if you want to listen to music on said iPod.
Once you start with iTunes, you’re just a click away from the iTunes Music Store, and, if you’re an iPod owner, that’s pretty much the only store from which you can buy tunes that will play on the iPod.
Except Wal-Mart, or Tower Records, or Sam Goody, or Target, or… you get the idea. There are alternatives, but online it’s mostly iTMS or nothing if you’re an iPod owner.
For example, you can’t buy music on Microsoft’s Music Store and play them on your iPod or within iTunes (not easily, not legally). But that’s not Apple’s fault.
Then again, Microsoft is not the monopolist when it comes to music on PCs. It’s an also ran. A runner up to the crumbs left by Apple’s stampede.
The lawsuit, and others of similar ilk, have a case, though with many holes. While Microsoft abused their monopolistic position by forcing manufacturers to pay for Windows on every PC shipped, and to bundle software (illegally, it was determined), Apple doesn’t really ’force‘ iPod buyers to use iTMS.
That’s the difference, and it’s a big difference. The problem is that you can’t use other music from other online stores employing DRM (digital rights management) not compatible with iTunes.
Whose fault is that? Apple’s? Yes and no.
The remark about Microsoft deliberately modifying Windows to make Quicktime shaky is not completely true. The Quicktime plugin developers did not fully understand what they were doing, and were relying (unknowingly) on an undocumented side-effect. When that changed, they had problems. That was definitely Apples fault, not Microsofts.
The whole “why won’t Apple license Fairplay” issue needs to be considered from a real business perspective. Does anyone know for a fact that Apple haven’t said to anyone “Sure, you can use it, the one-time cost is $1,000,000,000”? (Long term, thats probably not an unrealistic figure)
The courts cannot mandate a price for a company to sell its IP. That would set a precedent that would bring down the US economy.
You might as well sue Microsoft for not “making Steve Jobs an offer he can’t refuse”. That’d probably be the responsible thing for Microsoft to do, where responsible == return the greatest profit to MSFT shareholders.
Hell, Apple are already being hauled over the coals for charging 3rd party manufacturers a fee per unit for using iPod-compatible connectors. No-ones suing over that price-gouging, because they can’t. Its not illegal to price your product exorbitantly - if you can’t afford to make iPod-compatible hardware, thats *your* problem, go make parts for some other mp3 player.
Market forces are supposed to sort this one out. Your new widget appears on the Dell player instead, its an instant hit, people drop the iPod in droves, you get to sleep “on piles of money with many beautiful girls”
The one counter to all of this, that I’m aware of, is the “inter-operability” argument. That Apple should be forced to open its IP up, so that its competitors can inter-operate with it, in the same way that the EU forced Microsoft to show the Samba guys its internals.
But this is not the same situation - the iPod can already play MP3. The only thing it won’t do is support “someone elses file format” and thats a function of the business deal between two third parties, the other vendor and the music industry.
If the courts rule that Apple has to change its ways so that Microsoft and Sony can broaden their markets whilst maintaining their current contracts, then they (the courts) have sunk to an amazingly corrupt new low.