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Is Apple Setting Themselves Up for an Anti-Trust Suit?

July 25, 2009

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I’m no expert on technology, though I pretend considering I’m writing for a “tech blog”, nor am I a legal expert but I think Apple is a hot minute from being sued for anti-trust. After reading today’s article in the Times about Microsoft offering a choice of browser and, more importantly, the ability to remove Internet Explorer from Windows 7 in Europe. Europeans will get to select their favorite browser from a “ballot screen” when booting up Windows 7. Microsoft is trying to slake the EU as they prepare to slap another anti-trust suit on Microsoft.

Apple in 2009 seems to be similar to the Microsoft of 2001. Although they don’t yet have a dominant share of laptops and desktops, Apple is completely dominant in almost every other aspect of the technology world. iPods dominate the mp3 player market. The iPhone is omnipresent and still the most coveted mobile device on the planet two years after its release. The iTunes store is actually the top music retailer in the country and has sold more movies online than any other outlet.

Yet Apple has an incredibly different image than Microsoft ever did. Apple is our friend. They design smart (with the exception of Apple TV) products that provide all the bells and whistles for both casual users and those that are most demanding of their devices. (Full Disclosure: I am a Mac user, an iTunes shopper, and an iPod holder) They’re that cool nerdy guy who was on that show Ed who was in love with the girl that he should have had because he was so nice! and smart! and he cleaned up so well!

What’s the problem? Here’s the problem. As Mike wrote about a couple days ago Apple blocked Sprint’s hopeful savior, the Palm Pre, from syncing with iTunes. Sprint and Palm have released an updated Palm OS that allows the phone to sync up with the latest version of iTunes. How much do you want to bet that Apple will block the new-improved Pre OS with its next iTunes update?

How can this be legal? It seems unfair to me. If I would want to sync a device with iTunes that’s not made by Apple, I couldn’t. There are no other dominant or viable alternatives, at least to the average computer user like myself. I’m sure those more technically inclined already have a better way to do all of this. But I don’t. In order for a company to compete with the iPod (or the iPhone), they would have to create an infrastructure as strong as Apple’s to support their device. That seems unlikely, thus Apple’s hegemony will continue to reign freely.

Should we be concerned?

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5 Comments leave one →
  1. July 26, 2009 11:54 am

    “How can this be legal? It seems unfair to me. If I would want to sync a device with iTunes that’s not made by Apple, I couldn’t.”

    Yup that’s about it. If I as a consumer want to use iTunes I need to buy an iPod, iPod Touch or an iPhone. Wow how horrible. I mean there aren’t any other MP3 or Smartphones out there for me to use and there is no way that another technology company could ever build a software media player that could do what iTunes does. How awful for all of us. THIS IS SARCASM!!! RIM’s Black Berry has there own syncing system. So does Microsoft’s Zune. Heck Palms previous holy grail the Palm Pilot series had its own closed system for it’s devices. Before I even continue this rant (full declosure, I own an iPod 2nd Gen, iPod Mini 2nd Gen, iPod Nano 2nd Gen and an iPhone 3G along with an Apple TV and Mac Mini)

    The main argument from everyone; Apple Haters to Apple Fan Boys is Apple Corp should open itself up so that anyone can use its software. Let OS X run on PC’s and Netbooks. iTunes should play all formats audio and video and the newest slam, how dare they stop a competing company from tricking it’s software into believing it’s an iPod and syncing with it. How DARE They!!!

    Now here is the thing. No one, especially Apple is forcing you to buy their product. No guns, no or else threats. They sell their product like everyone else. Online, in other retail stores and at Apple Stores across North America. You walk past without being hassled to come in. They didn’t take over your search engine on Google or Bing to route you to Apple.com/.ca. They like thousands of other companies built a product that consumers liked. They didn’t lie about the fact that this software connects with this product. (And if you didn’t know that before you bought, shame on you for not asking questions first) I choose to buy into the eco-system. If I didn’t want what Apple was offering I would go with another company. Case closed. At last count there are 10 other companies building MP3 players in North America and at least four other smart phone companies that have different OS’s that don’t seamlessly sync with iTunes. I know I’m rambling here but as long as consumers have choice, they can use it. Just because I like my Pontiac Torrent doesn’t mean I can turn around a slam them for not allowing me to install xDrive system from BMW. Or ask them to upgrade my sound system to Ford’s SYNC powered by Microsoft.

    Everyone get off your high horse. Buy the system that works for YOU the individual. If you don’t like it what Apple is doing with its product, go buy something else or build your own system. iTunes doesn’t do everything for me but since I have choice, I choose to live without all of the benefits.

    OCC

    • Andy permalink
      July 26, 2009 12:42 pm

      LBJ,

      To be fair no one held up a gun in 2001 and made people buy Windows operated PCs either–that doesn’t mean what they were doing was fair to consumers.

      Here’s where I find problem with your argument, and where I probably need to be a little more clear. I understand that almost every device syncs with its own closed software. That’s not the point.

      The point is that Apple’s move to block Palm signifies that the only place that you can really consume songs or films purchased in the iTunes Store is inside the iTunes platform or on an Apple manufactured product. If there were a viable competitor to the iTunes Store this wouldn’t be a problem, but there isn’t. If a person wants to download music or movies and watch them on a portable device they have only one choice: Apple. Consumers don’t have choice. Sure you can choose to not buy Apple products, but that is essentially a choice to not download music or movies in any legal way.

      • July 26, 2009 9:25 pm

        OCC

        Hey Andy, Fair enough (to the gun comment) and I’m sure I come across as the biggest Apple Fan Boy, but trying to compare iTunes to Windows is well Apples to Oranges. Now

        Windows dominate OS problem back 2001 was mainly because of size. Over 90% of home computer users had Windows running on their machines. The internet was the wave of the future and they decided to bully PC manufactures into bundling Internet Explorer into Windows and thus killing off any other software maker’s internet program, namely Netscape.

        I know you can’t answer this question, but why didn’t Palm just go to Apple and ask for access to iTunes. I know Apple has some sort of xml protocol to allow 3rd party devices to show up in iTunes. I think the larger question is when can company A (regardless how big it is) stop company B from just showing up to the party and double dipping in the sour cream (nasty)

        Lastly your comment, “Apple’s move to block Palm signifies that the only place that you can really consume songs or films purchased in the iTunes Store is inside the iTunes platform or on an Apple manufactured product”. (Is True) “If there were a viable competitor to the iTunes Store this wouldn’t be a problem, but there isn’t”. (is not true) There are a bunch of people with Zune’s that seem to be pretty happy consuming songs and video. I don’t own an Archos Player but for the money they seem to be doing pretty well and with the ability to download music and films from Amazon’s Unbox service, viable competitors are here.

  2. July 29, 2009 2:55 am

    Just to weigh in: Apple’s iTunes store has sold over 8 billion songs, 1 billion apps, 500 million videos and 200 million TV shows, and holds at least 80% of the online music market. As of last year, they’re also the second-largest music retailer (online or otherwise) in the U.S. There may be alternatives to Apple, but in 2009, they are few and far between, and hardly have the same level of infrastructure and support as the iTunes store does.

    • July 29, 2009 9:17 am

      Hey Mike,

      Does that mean Apple should just open the gates and let everyone in? If so, why should companies strive to do better. (this a larger argument which in no means is aimed against you)

      It’s probably a bit different here in Canada. Since we pay a levy on all MP3 devices, CDs, Hard Drives , SD cards (basically any device that can hold ones and zeros), we are legally able to download (not upload) anything from torrents, so iTunes isn’t as huge here as it in the US.

      It’s really to bad Microsoft did’t copy the iPod/iTunes piece when it had the chance. After copying everything else from Apple, they sure missed the boat.

      It was funny looking back at some of the reporting back in 2001. No one really thought the iPod was ever going to make it. From CNet ~ http://bit.ly/446n4k

      Cheers,

      OCC

      PS This Blog Rocks!

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