DoJ's probe into Apple expanding beyond music - Page 5

No, that's not what happened. The Findings of Fact were upheld on appeal (unanimous decision by the en banc Appeals Court), but the remedy written by Judge Jackson was thrown out and the case referred to another federal judge for the formulation of a new remedy. Jackson was removed because of some things he said to a journalist about the case which were supposed to be embargoed until after the case was done, but he released them prematurely. Then came the election of 2000. The new Bush DoJ snatched defeat out of the jaws of victory by recommending a weak Consent Decree, which the new judge in the case accepted. Pretty much the damage had already been done in the Findings of Fact, though. Microsoft tried to get them overturned on appeal to the Supreme Court, which did not take the case.

Get your history straight.

iPods could play more than Fairplay AAC files because iPods debuted over a year before the iTMS even existed, not because they would have been dead in the water otherwise. [iPod introduced in Oct 2001. iTMS opened in April 2003]

And how is Apple trying to "suffocate" Amazon, by complaining when Amazon gets a competitive advantage? Especially when Amazon was allowed to sell non-DRM'd files before Apple was... as a way to get Apple to agree to variable pricing of songs sold on iTMS.

"the mobile app retail market"???

What the heck is that?

Are apps for Windows phone, Symbian, Android, Blackberry, and iPhone all considered to be in the same "mobile app retail market"?

If so, then I guess it is good news for Apple that Android is becoming so popular - because it makes it even less likely that Apple can be perceived as having a monopoly-position in that market.

I'm surprised that there are this many comments on this topic. Nothing will happen to Apple. They were merely asking for equal treatment. The only "threat" that Apple made was to not make it a featured headline on iTunes.

The issue here isn't Apple. It really is everybody else. iTunes is successful because of the iPod and not the other way around. To the other hardware manufacturers, build things that people enjoy to use that are of high quality and easy to use. Apple isn't competing with you on price. They've begun to show with the iPod, iPhone & iPad that MS's true monopoly solely comes from Office and nothing else. Compatibility only goes so far because the PC (or whatever it's changing into now) is becoming a consumer market.

Apple may have other potential antitrust issues coming up but it doesn't have to anything to do with movies, Music, Flash and TV shows. The upcoming potential problem is the closed nature and the review process of the iPhone OS/App Store and if Apple limits the ability of mobile Safari in support of web-based applications due to App Store sales and iAds.

But the main reason why Apple had to tie their iTunes Store songs to their iPod was because the Music labels required that a DRM be in place before they allowed their music to be sold online. Apple came up with "FairPlay". And made it work on their iPods. This satisfied the Music labels. Apple was not about to license their "FairPlay" DRM to other MP3 players because the Music label also required Apple to maintain the DRM if it got hacked. So Apple wasn't about to offer support for "FairPlay" on other MP3 players. Thus the music purchased from the iTunes can only be played on an iPod. Unless you removed the DRM. Which wasn't that hard to do using the iTunes software.

Microsoft on the other hand came out with "Play for Sure" and licensed it to any MP3 player that requires a DRM to play downloaded music. And to any online sites that wanted to sell music. "Play for Sure" was so problematic and unreliable that even Microsoft didn't want to use it on their Zune. Thus they came out with "Zune DRM" for their Zune. Which they did not license and only played music bought from their "Zune MarketPlace" music store.

But all of this is ancient history. In technology years. Once the Music label stop requiring DRM on downloaded music, you can play any downloaded music on any device. And all DRM free music can easily be converted to any format that your MP3 player requires. But by this time, Apple iTunes Store was already beginning to dominate online music because of the popularity of the iPods.

Almost every company (especially tech companies) have that clause written into the contracts, whether they'd actually be able to enforce them is another matter altogether.

And how is an informal arrangement not to poach employees seen as "preventing valuable employees leaving". It will make the process a passive, rather than active hiring process, i.e. if somebody wants to go and work for Google from Apple, they still can. Google just weren't going to say to Apple employees "Do you want to come work for us for x, y and z benefits/bonuses".

I said this in another post. After WWII, we told Japan no more navy, etc and we would be their allies. In turn while we poorer billions into defense, they got busy making great cars and extremetech for the time. We also went from #3 in terms of global Internet speed just 10-15, maybe shorter years ago. We now stand at # 28. Shameful.
Most of these countries you can watch tv anywhere not like the monopoly here is and sine is regulated. It should be a required utility. Not the way it is now.

This is just silly and rather glib. Microsoft was almost the only PC operating system at the time. They had something like 80% - 90% of the market. What percent of the smartphone market do you imagine the iPhone has? They aren't even the leading vendor. Monopolies, per se, are not illegal. But using a monopoly in one market to extend a monopoly to another market is illegal and Microsoft's position was found to be officially a monopoly position. I hope the arguments presented in the DOJ are more rigorous than those presented here.

The big issue here is that Apple has received its clout not because of force like Microsoft but because people actually want to buy their products. No one really wants to buy cheap knock offs they have to because they can't afford the real thing or they were duped by unscrupulous individuals feeding on people's naivety.

Because people want Apple's products they are able to use purchasing power to leverage deals. There's no difference to what the supermarkets do or the department stores or whatever. More money means more buying power more buying power means better deals.

Manufacturers generally don't mind being pushed to the limits by Apple because they know Apple can sell their products which can only be good in the long term for them. Sure they whinge about the pressures to manufacture but it means good business for them.

No one wants a Zune or an XBox 360 and as a result Microsoft doesn't have as much buying power as Apple and manufacturers don't really want to do deals with a company that they know can't sell their products. As a result the Zune sells for more or roughly the same as an iPod but people would then look at the two and side with the iPod because they trust the brand.

The music industry is whinging because Apple has buying power over them and therefore able to push them around. This is not bad for the customer because it means that they get a better deal on their music. Meanwhile while they are whinging the music industry is raping the artists. Why isn't DOJ having a go at the music industry?

Apple's iTunes wasn't allowed to sell DRM free music or at least had to push damn hard to get it meanwhile Amazon waltzes in and steals Apple's thunder. Apple cried foul and threatened the music industry and now they have DRM free music across the board. Apple isn't a monopoly here because that music can be played on other players that support the format. They just can't use iTunes to get the music on those players. Why should Apple support players they don't make with their software? They're not entitled to do so so why bother? Meanwhile the customer wins again, Apple wins, the music industry continues to rape the artists.

DVDs have DRM and the movie industry enforces DRM on all their videos. Because only Apple supports the FairPlay DRM then only Apple devices can access those videos. This isn't a monopoly situation either because Apple is FORCED into applying DRM and they are using their DRM. No one wants to license the DRM anyway so why should Apple support players that don't want to pay their way?

The App Store is a bone of contention for many players but if developers don't like Apple's way of controlling their OWN product then there's nothing stopping those developers from playing on a different field. You don't whinge at the cricket field because you want to play rugby so why whinge at the App Store because you want to play Android's rules?

When you break it all down Apple hasn't done anything wrong. They've played a better game that's all. They try to play fair and by the rules but the losing teams always want to fight the win despite the fact they played a crap game.

I expect Apple to compete. I don't expect them to interfere with the business and trade of other companies. I don't expect MS to do it, Walmart to do it nor Apple to do it.

6 posts in and already a 'well duh' post.

I never said Apple should, could or would have ever considered not allowing MP3 or music from other sources. I actually said that to have done so would have been suicide from their players, so of course they wouldn't have. The 'history' is sort of irrelevant to the point. Yes, it shows why they initially 'allowed' MP3s. And I explained why they would continue to 'allow' MP3s.

Someone posted a post suggesting that because Apple 'allows' music from other sources, it would kill the DoJ case, with the implication that this shows Apple control nothing. But, as your own posts shows, the reasons for Apple 'allowing' us to play our own music was far more pragmatic to the success of the iPod than showing some sort of altruistic favour to the music companies and consumers.

Apple negotiates their own competitive advantages as well. Their competitors shouldn't decide Apple's terms of trade or business through their partners either.

Yes, Apple had all sorts of reasons to allow non-iTunes music on their players, including the fact that they didn't initially have a iTunes store and even when they did, barring other sources of music would have killed the iPod. Given these many reasons, them allowing other sources of music would have no barring on this case. Which was the point.

oxygenhose made some dumb assertion that the fact that Apple allows other sources of music would torpedo any DoJ case against them. It was as relevant as saying that the fact that Apple allows iPods to sync with Windows would torpedo the DoJ case.

Noncompete clauses are binding in most states as long as the time period and scope is reasonable. In a few states (like CA), though, they are really only binding for very high level employees who receive a significant amount of compensation - such as selling their company.


The really shameful thing is the way you're butchering the English language. Do yourself a favor and get an education.


How is Apple interfering with anything? They simply said that if Amazon gets a song first that Apple will not highlight that song on iTMS. That's perfectly reasonable and legal.

How does Apple refusing to spend money on marketing songs given exclusively to competitors for some time, songs for which there would be a relatively low return on marketing investment as a consequence, "interfere [emphasis mine] with the business and trade of other companies?" How does Apple telling record labels that they aren't going to waste their money on this, "interfere with the business and trade of other companies?"

I was talking about the case of Amazon's offer to the labels to take part in their promotion, without the requirement of advanced, exclusive access. It would simply be agreeing to take part in an Amazon promotion. Apple still pressuring the labels not to take part.

As far as how does it interfere, well how does it not? In that same way that MS interfered with their OEMs trade and business with Netscape, using their marketing dollars. The OEMs stated that MS threatened to withhold marketing support if they agreed to place the Netscape shortcut on the desktop (amongst other threats) which amounted to promoting Netscape. This interfered with the OEMs ability to separately do business and trade with Netscape. Apple threatening to withhold marketing support from the labels if they agree to promote with Amazon doesn't seem so very different.

Apple can and should use their marketing assistance to influence their dealings with the labels. Should they use it to influence how the labels can deal with Amazon? When iTunes was first launching, would you have been accepting of Walmart threatening the labels to remove any marketing support from them if they agreed to terms with Apple that Walmart didn't like?

I see the points. However, I wonder if there are advantages too - especially during the period of monopoly buildup.

Look no further than your cable modem. It could be a black rotary-dial handset instead.

Shit, forget about the early access. As I have repeated, the original BillBoard story says that Amazon went to the labels and offered to drop that requirement (not across the board). But even for those offerings that would be promoted without Amazon getting early access to, Apple still pressured the labels not to deal.

Since Apple's problem was then obviously not limited to the concern about early exclusive access, then they seem to have been concerned simply with deals that would result in the labels co-promoting with Amazon (with or without early access). So what they simply said was that if you partner with Amazon for promotion, we will not partner with you on marketing. Maybe that is OK. When MS said to their OEMs that if they promoted Netscape (i.e. place shortcut on the desktop) they wouldn't partner with them on marketing, was only wrong because they were a monopoly? It might have been legal if they weren't, but right?

So, it is OK to you for Apple, or any other company with a strong market position to 'suggest' to other companies how they can trade and form contracts?

That is beside the point. The point has nothing to do with Apple selling its dev tools.


apple is saying that if a dev wants to sell a title at the iStore, it may not be written in a manner which will allow it to be sold elsewhere. Instead, it must be written in a manner that gives Apple an exclusive title.

Perhaps the reason they are doing this is to use their app market power in order to disadvantage other platforms, and other handset makers.

I think that is what is being looked into.

Harassing public officials who are doing their job is not the best way to petition the government.

Then your definition of "interfere with the business and trade of other companies" is different than mine.

Apple doesn't appear to be telling them they can't make deals with competing music stores.

Apple doesn't appear to be threatening to retaliate by stopping the sale of the songs in question - like Amazon did to books published by MacMillan.

http://www.nytimes.com/2010/01/30/te.../30amazon.html

They are trying to do exactly that by fostering competition in the relevant markets.

The comment I replied to was:

"Apple 'allowing' music from other sources is simply survival. The iPod and iTunes store would have been dead in the water if iPods could only play Fairplay AAC. People would have bought alternatives if they couldn't play their pirated MP3s."


I can see that making thousands of posts over the last nine years makes you feel superior, but at least try to keep track of which comments you are replying to.

Apple's "Rip, Mix, Burn" slogan pre-dated iPods.

Apple didn't need to support "pirated" mp3s, they needed to support the mp3s people had been making with iTunes.

Apple is the exclusive seller of native iPhone apps. They do their best to make it impossible to install any competing apps.


And before the iStore, there were plenty of places to buy Symbian, PalmOS and Blackberry apps. The issue now is that Apple's store has power over the devs, and Apple is saying that if you want to sell at our store, the only good source of sales, you cannot make the product so as to be saleable in those other stores.

But how much market power? Isn't "monopoly power" a requirement for many of the varied antitrust laws?

None of which has any bearing on the DoJ investigation nor would result in the investigation being cancelled. You know, sort of the point. Try to keep up with the thread. Otherwise, your posts only add noise.

That is called "retail price maintenance". I would be very surprised if companies with monopoly power in a market were allowed to do that.

All definitions of market power are justified in opaque economics jargon. That is the proper mode of analysis.

should it really be considered a monopoly if no one WANTS to spend their money on the alternatives?

and how can you say it is wrong for distributor to dictate terms to the supplier but not the other way around?

Did the big publishing houses not have the opportunity to negotiate ANYTHING AT ALL with Apple? Were they FORCED to unconditionally accept Apple's terms?

Maybe they were and did so from a position of desperation and now that Apple as a distributor has some real benefit in the market place the media owners have decided they want to renegotiate but rather than doing it around a table they are doing it in a courthouse etc.

Here's a few definitions. I endorse none of them in particular. But some of them bear out (in part) the "behaved in markets in a ways that no other can" definition. But they specifically refer to the power to raise prices. And they do not require the absence of other, similarly empowered players.

--# In economics, market power is the ability of a firm to alter the market price of a good or service. A firm with market power can raise prices ...
en.wikipedia.org/wiki/Market_power

# 1. Ability of a firm or other market participant to influence price by varying the amount that it chooses to buy or sell. 2. Ability of a country to influence world prices by altering its trade policies.
www-personal.umich.edu/~alandear/glossary/m.html

# When one or a few large companies dominate power production in a regional market and use such dominance to manipulate the market.
www.impa.com/glossary.asp

# The power that a firm has in a relevant market in the absence of effective competitive constraints in that market.
www.reckon.co.uk/open/Glossary

# Refers to a firm that can affect the quantity demanded of its product by varying its price.
http://www.mbs.edu/home/jgans/mecon/...y/Section2.htm

That is the crux of the matter with the other DOJ investigation.

Apps can be written so as to be "flexible", such that they will run on the iPhone AND Android.

But Apple will accept only apps that are not flexible. Is that OK for somebody with as much market power in the dev community as Apple?

Freaking communists in the US Government telling everyone what to do. Laissez-Faire! Stay the hell out of business

The market for software for mobile devices. Check out Handango for an example.


It depends. But given that tools exist to write for all (many?) of those platforms at once, then I think they are in the same market.


Agreed. And I don't know the relevance of the timeline - do they look at the facts as of the tome of the decision, or as of the time of the complaint?

And I wonder if actual harm needs to be shown, or only the intent to cause such harm.

a) As you mentioned before, they "reportedly" ...

b) It still doesn't make sense for Apple to spend money on the promotion of songs which the record labels have established special deals with a competitor for. Are you saying the record labels ought to be able to dictate which songs Apple promotes and how much they spend?

c) If anyone has market dominance here, it's the record labels. They are able to dictate price, who gets DRM free music, have exclusive control of music from individual artists, etc., etc. All Apple gets to choose is what the will spend their money promoting.

d) The situation is not at all analogous to Microsoft/Netscape. Microsoft used its monopoly position in personal computer operating system to attempt to leverage control of other technologies -- i.e., web browsers, and arguably the web itself. In this case, even if we assume the worst of Apple, they will have used a leading position in online music sales to avoid being forced by the record labels to spend marketing dollars as the labels dictate.

Thank you for the correction. Seems anti-competitive to me, leveraging Amazon's large CD sales to cut out the competition.


--From the Billboard article--
---------------------
".....When Amazon first launched the Daily Deal in June 2008, its primary aim was to drive more customer traffic to the online retail giant's MP3 store. "The labels paid nothing for being included in that privilege, nor were they asked," a major-label head of sales says.

But in mid-2009, the executive says, "that promotion morphed into something where the labels make arrangements to provide an exclusive selling window with Amazon for a big release expected to do a lot of business on street date."

In exchange for a Daily Deal promotion on a new album, Amazon has been asking labels to provide it with a one-day exclusive before street date and such digital marketing support as a banner ad on an artist's MySpace page and messages on label and artist Web sites and social network feeds.

"When that happened," the executive says, "iTunes said, 'Enough of that shit.' "

Sources say that iTunes representatives have been urging labels to rethink their participation in the Amazon promotion and that they have backed up those warnings by withdrawing marketing support for certain releases featured as Daily Deals......

To help labels sidestep iTunes' objections, Amazon has been fine-tuning its Daily Deal pitch on new titles, agreeing, for instance, to forgo the one-day exclusive window on certain ones. But executives familiar with the situation say iTunes has continued to voice its displeasure with other aspects of the promotion, such as label marketing support."
-----------------

So in 2008 the Daily Deal didn't have the 1 day exclusive and no grumbling from Apple mentioned in the article.

In 2009, the Amazon one day exclusive was introduced that included "digital marketing support as a banner ad on an artist's MySpace page and messages on label and artist Web sites and social network feeds." That's when Apple objected and said they would pull their promotions and marketing from the iTunes Store, which is more than reasonable. Look at the numbers sold by Amazon on the Daily Deal.(re: Mariah Carey's "Memoirs of an Imperfect Angel" U.S. sales of 168,000 units -Vampire Weekend's "Contra," U.S. sales of 124,000)

Soooooo, not only was Amazon getting a one day exclusive the Labels were to provide free promotion on their websites and the artists were to do the same. Anti-competitive much?

Finally, the article states Apple is "voicing their displeasure" even with the Daily Deal sans the exclusive, but it doesn't say Apple is pulling their marketing / promotions over these deals, even though Apple would be correct in pulling marketing / promotion over this deal also.

I'm so tired of everyone claiming Apple wields so much power. Where the heck was the power when Amazon got DRM free music long before Apple (re: and not a peep from Apple)? Where the heck was all this power when the Labels forced Apple to sell it's DRM free music at a higher rate than Amazon? Where the heck was all this power when the Labels forced Apple into variable rate pricing?

The truth of the matter is that Apple is under attack not only by the competition but by the Labels and they finally said,"Enough of that %#(!".


Apple is not interfering, they are only holding off providing free marketing and promotion, which costs money, since Amazon's anti-competitive behavior limits Apple's sales.


You are wrong. Developers are free to write their apps for any other platform, Apple in no way is telling developers that apps for their store are an exclusive.

Maybe someone should write a cross compiler based on Apple's tools, APIs and SDKs, if this is even possible, I'm not a programmer. That way a developer could write the app in C, C++, objC for Apple then just cross compile to other OSes.

If it were "perfectly...legal" it is unlikely that the DOJ would investigate. It remains to be seen whether it was perfectly or imperfectly legal, or whether it was some degree of illegal.

We have neither the necessary full facts, nor the extremely complex frame of reference required to make that decision. Once the facts come out, and once we learn which statute is being applied, we will be in a better position to form opinions.

If a company with a strong market position suggests that, I would think it to be OK.

If a company with monopoly power suggests that, I would think that it is an abuse of monopoly power, because it is no longer a suggestion, but instead, a command.

If an offer is made which cannot be refused, is it still an offer? How about a suggestion?

Yes, this is all an American thing, like the EU never went after Microsoft. And they went after them for the wrong things: not wanting Microsoft to include IE with the OS or for a while, they even wanted Microsoft not to incorporate things such as audio or video playback in the browser. It would be like telling a car manufacturer that they couldn't include GPS or a car radio or air conditioner. The EU investigators obsessed for months (or possibly longer) over how easy it was to install another browser and we all know that it's actually quite easy and always was.

Besides, the government has not "gone after" Apple as yet. All they've done so far is ask other companies about what it's like to deal with Apple and what the terms of the agreements are to see if they are violating any trade laws.

In the end, they'll probably find one or two minor things that they'll ask Apple to change in their agreements and Apple will announce that they will do so voluntarily. Nothing major is going to come out of this. Most changes will probably be about wording in the contracts. I suspect the government may place certain restrictions on some of the exclusive deals that both Apple and Amazon do in that they can do exclusive deals, but they can't ban publishers from their store because they do an exclusive deal with the competition for certain tracks/books, etc. Some of these agreements or "bans" may be construed as being anti-competitive. No big deal.

Ken Lay would love you.

I spoke too broadly. The titles need not be exclusive. I was going for some kind of "effectively exclusive because the work cannot be sold elsewhere, but instead must be duplicated" sort of thing.


Y'know, I thought of that too. I don't understand why it is not a full and adequate solution.

Adobe should do it.