Apple: Damned if you do…
In Capitalism: The Unknown Ideal, Ayn Rand wrote:
If I were asked to choose the date which marks the turning point on the road to the ultimate destruction of American industry, and the most infamous piece of legislation in American history, I would choose the year 1890 and the Sherman Act–which began that grotesque, irrational, malignant growth of unenforceable, incompliable, injudicable contradictions known as the antitrust laws.
Under the antitrust laws, a man becomes a criminal from the moment he goes into business, no matter what he does. If he complies with one of these laws, he faces criminal prosecution under several others. For instance, if he charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly, or, rather, for a successful “intent to monopolize”; if he charges prices lower than those of his competitors, he can be prosecuted for “unfair competition” or “restraint of trade”; and if he charges the same prices as his competitors, he can be prosecuted for “collusion” or “conspiracy.”
If you would like to see an example of the type of prosecution Ayn Rand speaks of, you only need to look at the current plight of Apple. Over the past couple weeks, Apple has been presented with multiple lawsuits from unhappy customers. The lawsuits are centered around three basic issues. The first issue is Apple’s exclusive deal with AT&T and its enforcement of that deal through software updates to its iPhone software. According to those who are bringing suit against Apple, the deal between AT&T and Apple is monopolistic in nature and illegal according to FCC policies and the law (including the Sherman Act). The second issue is, believe it or not, is Apple’s decision to drop the price of its iPhone by $200. And the third is Apple’s decision not to include a removable battery in the iPhone. It’s hard to find a decision Apple made regarding its iPhone release that someone won’t claim is a violation of the customer’s rights.
Now, if you’re like me, you’re wondering how Apple’s deal with AT&T could constitute a monopoly. Apple and AT&T are just two players in a large, competitive cell-phone market that nobody is even close to “monopolizing.” This is where the “unenforceable, incompliable, injudicable” antitrust laws Ayn Rand spoke of come in to play. The litigants in this case are not accusing Apple of monopolizing the entire cell phone industry. They claim Apple is trying to monopolize “portions of the mobile cell phone market.” One of the court documents even refers to Apple’s “monopolization of the Relevant Market.” In other words, Apple is being sued for monopolizing the iPhone market.
But what about the price drop? Aren’t most people happy when the price of a product drops dramatically? Not the woman who is suing Apple for it. She claims that Apple’s price drop was “not necessary” and it lowered the resale value of the phone she had purchased. She wants a million dollars for her trouble. I don’t know how much damages those who are complaining about the battery are seeking, but I’m sure it’s a lot. (By the way, if you don’t like the battery, why not take it back?)
I see a common thread in all of these cases, and it is the belief that Apple should not have the ability to own and control its own property. To these people, the happiness of Apple’s customer is not a requirement to stay in business; it’s a legal requirement to be enforced by any customer who disagrees with a decision Apple made. It doesn’t take much imagination to think of the implications of this type of logic. If the rules and limitations Apple sets for its property is a violation of the rights of its customers, what piece of software or hardware could be considered safe from litigation? Accepting the litigants’ arguments requires the rejection of the idea that property — whether material or intellectual — should be owned or controlled by the individual that created it.
I’m hoping that these cases are rejected by the court or Apple wins handily, but I think it is a shame that we’re at a point where these types of cases are even considered. Good luck Apple!
Tags: [apple, iPhone, property rights]Comments
Why I’ll never use an iPhone
Ashley and I finally received a photo cd with our wedding photos in the mail, and I thought it would be nice if we could view the photos on our music players. I own a Zen, so all I had to do is drag-and-drop the photos from the cd straight to my player. I plugged in Ashley’s iPod expecting it to work the same way, but there was no directory waiting to take the photos. After fiddling for a while with the device trying to get it to show the photos, using help I picked off of Google, I couldn’t get it to work. As I gave up in frustration, my first thought was, “And you were thinking about using one of Apple’s phones?”
The iPhone has been out a while, and it is a very cool device. I think that the way it seems to wrap up what most people want out of computers and phones into a hand-held device is remarkable. It’s still made by Apple, though. Apple makes quality, thoughtful products that work well, but they all seem to require more “buy-in” than I’m willing to pay. Apple products seem to want me to do things their way instead of being flexible enough for me to do things my way.
The best example of this is the restrictions around the iPod and iTunes. I have a music collection that I highly value, consisting mostly of mp3 files with some wma files. Most of the music is ripped from cds, but some is purchased from eMusic, buymusic.com, the Yahoo music store, and Napster. I have them all stored and backed up, and I want to easily move this music to my music player. With most devices it’s a drag-and-drop process, but with the iPod I would have to convert some of it to Apple’s format. If I buy music from iTunes, that music is stuck in Apple’s format. If I choose to go with the iPod but later decide to go with a different music player later, I have to convert back out of Apple’s format into a more standard format. Maybe I’m being picky, but why should I have to waste my time converting and managing files? It’s 2007, why should I have to read a manual to figure out how to use a silly music player? Why can’t I drag-and-drop with the iPod?
I know that I could drag-and-drop with Apple if I decided to stick with iTunes, Quicktime, Mac computers, iLife, etc., but that’s what I mean about requiring too much “buy-in.” Even if Apple’s products are best today they might not be the best tomorrow, and I don’t want to invest any data into Apple-only formats that make it difficult to switch to someone else. So despite all of the iPhone’s cool features, I won’t touch it until I can use it without committing myself to using Apple’s other products.
I think that one of the best results of the iPhone is something most people aren’t talking about: the competition it will bring to the cell phone market. Companies that create cell phones are going to have to keep up with the iPhone’s features and price, and I think they can do it. In a year or two when I’m ready for a new phone, I bet I’ll be able to pick a phone similar to the iPhone but with a better price and features. Just look at the music player market. Earlier this year I purchased a 30gb Zen for $50 less than the 30gb iPod, and the Zen had a better screen, battery life, and compatibility with more music stores.
Tags: [apple]Comments
Apple privacy concerns?
This story is a little old, but for those that haven’t heard about it:
According to some bloggers, Apple violating your right to privacy!!!
How, you ask? Well, if you purchase a DRM-free song on iTunes (the ones that do not have copy protections and cost a little more than the regular song rate), Apple will embed your full name and email address in the song. What this basically means is that if you throw the non-copyrighted-protected file onto a “file sharing” system, Apple or music labels might be able to track you down. If you keep your song library private (like you’re legally obligated to), it won’t affect you.
When this was discovered, there was a lot of complaints that embedding this information in a file violated customer’s privacy rights, but that is not true. The only thing that customers have a right to is what they purchase.
If I purchase a chair that I know to be broken, I cannot claim that the seller violated my right to a non-broken chair.
If I purchase a computer that states that it does not have an operating system, I cannot claim that the seller violated my right to a working computer.
If I purchase a song that says “DRM-protected, only works on iPod,” I cannot claim that the seller is violating my right to play the song on my Zen.
In other words, you only have a right to own what you purchase. Except for cases of fraud, you are responsible for what your purchase, and for what you do with that purchase.
So it does not matter if Apple sells its music in DRM-free, unencrytpted music that works on all players, or whether it sells the music in reams of paper containing the 0’s and 1’s of the song, your only choice is to accept what they offer or not accept it.
Tags: [apple, drm]