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antitrust posts

Filed under: Apple Corporate, Bad Apple

WaPo: DOJ preparing antitrust probe for Apple, among others

Apple, Google, Yahoo! and Genentech are subjects of a fresh antitrust investigation surrounding hiring and recruiting practices among companies in the tech industry, according to Washington Post staff writer Cecilia Kang.

"By agreeing not to hire away top talent, the companies could be stifling competition and trying to maintain their market power unfairly," antitrust experts said in the article. Hiring and recruiting can sometimes be a touchy affair, as Apple found out late last year when trying to hire Mark Papermaster. The investigation may suggest some kind of written agreement among large tech firms to not hire away each other's top talent.

According to the New York Times, Justice has only requested documents for the ongoing investigation. Neither the Justice Department nor any of the companies mentioned in the story had any comment.

This comes in addition to another Justice investigation into ties between the boards of directors of Apple and Google, and whether or not having Google CEO Eric Schmidt on both (and Genentech CEO Arthur Levinson on all three) constitutes antitrust violations. Some consider Apple and Google to be competitors in certain areas such as phone handsets.

The Obama administration is stepping up efforts to investigate anti-competitive activity among high-tech companies, and is already investigating Google's deal with book authors to republish their work via Google Books.

[Via AppleInsider]

Filed under: Apple Corporate, Hardware, OS

Psystar wins a battle, legal war just getting started

Previously in the Apple-Psystar legal battle, the clone maker amended its countersuit to charge that Apple was unfairly leveraging its copyright by binding Mac OS X to Mac hardware.

On Friday, the federal judge assigned to the case ruled that the amendment will be heard by the court, a small victory for Psystar. It's something of a reversal for the company, since they had federal antitrust allegations thrown out in November. Similarly, Psystar's assertion that Apple is in violation of California's antitrust laws was thrown out Friday as well.

Judge William Alsup said, "Psystar may well have a legitimate interest in establishing misuse [of copyright] independent of Apple's claims against it -- for example, to clarify the risks it confronts by marketing the products at issue in this case or others it may wish to develop." This isn't to say that the judge necessarily agrees with Psystar's point, but just that it's legally reasonable enough to be argued in court.

Apple has also not yet revealed its 10 "John Doe" defendants: alleged conspirators who worked on Psystar's technique for loading Mac OS X on non-Apple hardware.

The case will decide whether or not Apple can disallow other hardware makers -- including Psystar -- from including Mac OS X on computers shipped to end users. Last week, a company in Germany claimed that Mac OS X's End User License Agreement didn't apply to them, and is selling Mac clones to customers.

The case is scheduled to go to trial on November 9.

[Via Macworld.]

Filed under: Apple Corporate

With new claims, Psystar tries another angle

You have to admire Psystar's tenacity. Since Judge William Alsup's decision to disallow federal antitrust claims against Apple in Psystar's countersuit, Psystar is amending its countersuit, alleging the misuse of copyright based on different antitrust claims.

It boggles the mind.

Apple is already suing Psystar, of course, claiming that they are violating Mac OS X's End User License Agreement (EULA). Psystar, in its new set of counterclaims, says that Apple is improperly extending the scope of copyright law to include its argument that Psystar broke the EULA.

Psystar claims that -- while admitting that it can't make arguments based on federal antitrust law -- Apple has "leveraged" the power granted them by the Copyright Act and extended it to lock in users post-sale. This, Psystar says, is unlawfully monopolistic, and makes Apple's copyrights unenforceable.

Psystar is also seeking to prove that Apple's behavior is illegal under California's unfair competition statute.

The judge will decide in January if the new claims can be argued in court.

[Via Ars Technica.]

Filed under: Apple Corporate

Apple, Psystar strike a deal

CNET and The Mac Observer noted a legal filing on Friday that suggested Apple and Psystar were looking to bypass the normal lawsuit process and enter a phase of private arbitration and mediation.

The filing notes that Apple and Psystar will participate in the Alternative Dispute Resolution (ADR) process, a way to keep legal costs down -- and the outcome private. For famously secretive Apple, this agreement seems right up their alley.

The agreement means the two companies will enter non-binding arbitration, present their case to a neutral party, and work out a deal through mediation.

This all probably comes down to one thing: cash money. Psystar has nowhere near the cash reserves that Apple has, so this less-expensive option is attractive to them. It's attractive to Apple because if they lose, the decision is kept under wraps. As CNET's Tom Krazit notes, if Apple is guilty of Psystar's antitrust accusations, it could hurt their other cases where they're accused of the same thing.

Of course, we'll know for certain the outcome simply by seeing if Psystar continues to sell their computers (or not) after January 31, when the ADR sessions wrap up.

[Via AppleInsider.]

Update: According to Psystar's attorneys, Apple and Psystar were ordered into the mediation by the court. According to several of our commenters, ADR is a common practice. Soulbarn says: "It is practically mandatory. It would be a surprise if it didn't happen, no matter who the case involved, big or small, famous or not famous, precedent-setting or non-precedent setting. It is part of the normal legal process." Thanks, everyone!

Apple asks for lawsuit dismissal with 'prejudice'

Apple is asking the judge presiding over the company's lawsuit against Psystar to dismiss the cloner's antitrust lawsuit "with prejudice."

IGM notes that a motion to dismiss is a very normal part of the lawsuit process. Asking to dismiss "with prejudice" is a little more severe, but not necessarily uncommon, and if the motion is granted it would make it impossible for Psystar to re-file the case in the future.

"Defendant Psystar Corporation is knowingly infringing Apple's copyrights and trademarks, and inducing others to do the same. ... In an obvious attempt to divert attention from its unlawful actions, Psystar asserts deeply flawed antitrust counterclaims designed to have this Court force Apple to license its software to Psystar, a direct competitor. The Court should reject Psystar's efforts to excuse its copyright infringement, and dismiss these Counterclaims with prejudice," Apple's lawyers wrote in a court filing September 30.

The next hearing in the trial is schedule for November 6, when judge William Alsup will hear the motion for dismissal.

[Via ZDNet and MacsimumNews.]

Filed under: Analysis / Opinion, Apple Corporate, iPod Family, iTunes

Apple hit with antitrust lawsuit

Information Week is reporting that Apple has been accused of monopolizing the online music industry in an antitrust lawsuit. Specifically, the suit states that Apple has placed "...unneeded and unjustifiable technological restrictions on its most popular products in an effort to restrict consumer choice, and to restrain what little remains of its competition in the digital music markets."

Here we go again with "restricting consumer choice." First of all, no one is being forced to use iTunes or an iPod. But, what if you want to use iTunes with a player other than an iPod? Or, what if you want to use an iPod but not the iTunes Store?

Mac users can choose from a number of players that work with iTunes, including the Nomad Jukebox, SonicBLUE Rio and Nakamichi SoundSpace 2. It's true that music purchased from iTunes will not play on these devices (unless it's from the growing library of DRM-free songs), but Mp3 files and unprotected AAC files will.

For iPod users looking beyond the iTunes Store, there's the Amazon Mp3 Store. In some ways, in fact, the Amazon Store is more appealing than iTunes: all of their tracks are DRM-free and many are cheaper.

Of course these aren't perfect solutions. To get the most out of iTunes and an iPod, one must use them in conjunction. However, this suit feels like sour grapes: punishing Apple for their success. There's a difference between dominating a market and preventing others from succeeding. So far, no one has created a more successful alternative and that's not Apple's fault.

Thanks, Dave.

Filed under: Apple Corporate, iTS, Bad Apple

Apple under European antitrust scrutiny

The AP reports that the European Commission has launched an antitrust probe into iTunes. According to the article a single track costs $1.56 in the UK, $1.44 in Denmark and $1.32 in Germany and Belgium, while at the same time users are restricted to the iTunes store of their country of origin. "Consumers are thus restricted in their choice of where to buy music and consequently what music is available, and at what price," the commission said in its statement. Apple's spokesman said it was prevented from creating a single European store by its contracts with music labels and publishers and the rights they negotiated with them.

This investigation is apparently separate from the whole ongoing Apple/DRM foofaraw.

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