I suspect the real legal debate won't hinge on market share and anti-trust laws, which can get messy and often ends up inconclusive.No, the debate is really a public policy issue. Is the public interest best served by putting cell phone companies and those who make digital devices such as Apple's iPad and Amazon's Kindle under the digital equivalent of the common carrier laws that apply to the shipping industry?
For the full details, check out the "common carrier" entry in Wikipedia.
Here is how it works in practice. When you want to ship a package, you don't have to worry about whether the shipping firm you want to use allows you to ship through them or whether they will apply a 30% surcharge simply because you compete with a firm that the shipping company owns. The 30% surcharge is the package equivalent of what Apple wants to do with ebooks. FedEx and UPS can't enforce such surcharges.
No, subject to safety regulations and weight limitations, a common carrier has to transport any package the public brings in and to do so at certain fixed rates. They can't charge one company one rate and another company a different rate. They particularly can't do so to restrict competition.
The same is true for forms of communication that involve data rather than physical objects. Your landline telephone company can't block or impose surcharges on a call you might make to a cellular company under the assumption that you might be transferring your service to them. A common carrier has a public responsibility, enforced by law, to carry everyone's packages or data without discrimination or prejudice.What the Kindle does and what Apple wants the iPad to begin to do is discriminate between data in ways that a public carrier cannot.
Apple wants mobi ebook data intended for the Kindle app to be subject to a 30% of the retail price surcharge over that same book's data, encoded as epub and intended for their own iBooks apt. They're doing precisely what a common carrier cannot do.
Keep in mind that the law doesn't force every transporter of goods or data to be a public carrier. In part, the distinction lies in the public interest. Some private carriers (called contract carriers) are acceptable as long as the public also has access to common carriers, otherwise there would be no way goods could move freely about the country. Apple could argue that Google and the Droid OS are providing the common carrier OS, so they can be as restrictive as they like.
But Apple faces two problems that have little to do with market share. First, Apple isn't refusing to permit ebook data to be transported to Amazon and Sony apps. It is simply demanding a hefty surcharge, one that is identical to the entire income that Amazon earns from those books. That's an obvious and deliberate anti-competitive activity that's not in the public interest, whatever Apple's market share.Even more important, in virtually every one of its ad campaigns, Apple identifies itself as a common carrier.
When it promotes all the apps created by others that run on iPhones and iPads, it is strongly implying that any of those apps can access any data the user wants without unfair restrictions. Because of that advertising, Apple can't change, years after the iPhone came out, and suddenly transform itself into something much more restrictive. It can't sell tens of millions of devices under one claim and suddenly abandon that claim. Apple has made itself a de facto common carrier.
Interestingly, the same is not true of Amazon's Kindle. Amazon has never claimed that its device has any primary purpose other than displaying books and magazines downloaded from Amazon. What other features it has are limited, restricted and clearly labeled experimental. Amazon has been very clear that features other than reading books and other material provided through Amazon may not always be there. Under law, it would seem that they've established themselves as a contract carrier.
When someone activates a Kindle, they go through a procedure that establishes a formal contractual relationship between themselves and Amazon, a contract that involves the buying and selling of ebook data, with Amazon agreeing to provide certain services and the customer agreeing to pay for those services.
I'm not a lawyer, although I did represent myself in a complex legal dispute that I won handily. But common carrier status seems to be the real legal issue we are disputing here.
- First, is it in the public interest to insist that all those who make devices like iPhones and iPads behave as common carriers unless they clearly market themselves as contract carriers. That would mean an end to many of the restrictions that both Apple and cell phone companies apply to their products, as well as all the niggling charges.
- Second, has Apple by its actions transformed itself into a de facto common carrier? If the latter is true, then Apple's behavior is clearly illegal.
--Michael W. Perry, Seattle