Apple’s Stovepipe Monopoly
Apple makes some of the most fascinating and design savvy hardware on the personal computer market. Apple also produces award-winning operating systems that offer a proven and stable user experience.
But is Apple’s coupling of hardware and software creating a significantly unfair environment for hardware vendors who want to put Mac OS X onto a different set of hardware specs?
Granted, a software vendor inherently knows its application the best and should know exactly what hardware integrates most seamlessly with their own platform. Of course this integration could give software vendors like Microsoft and Apple monster profitability in the hardware market, but only Apple capitalizes on such a monopolistic option.
With Microsoft already having a hard time fighting the EU on whether or not IE should ever be bundled with Windows or face having to bundle IE alongside other competing browsers, the same fair-business concept should certainly be raising eyebrows with Apple’s mass bundling of hardware and software as well.
On July 3rd of last year, Apple filed suit against Psystar alleging violation of Apple’s EULA. Specifically on violation of this stipulation:
You agree not to install, use or run the Apple Software on any non-Apple-labeled computer, or to enable others to do so.
Psystar filed a counter-suit based on the Clayton Antitrust Act and the Sherman Antitrust Act, saying Apple competes unfairly by tying Mac OS to Apple-labeled hardware. Psystar attorney Colby Springer of antitrust specialists Carr & Ferrell cites “an anti-competitive restraint of trade.”
Frankly, Apple’s EULA mandate is ridiculous and it stinks of ultra-guerrilla business tactics.
The moment Microsoft adds a statement of any similarity into their EULA for Windows — they would surely be sued into bankruptcy.
Why is Apple getting away with keeping and enforcing such a competitively restrictive clause? Nobody knows just yet. However, a joint California court trial -filed by both Psystar and Apple- is scheduled for late 2009. What will justice do?
Cool another person asking exactly the same questions I have for so long. This is a point that I have been raising for a long time and no one yet has been able to give me a good enough reason why it is okay for Apple to do what it is doing but the moment MS does anything its competitors don't like they go running to the DoJ or the EU.
I am fairly certain that Microsoft could never get away with this type of business practice is related to the company having been found to be one who has abused their monopoly position in the past. They had a monopoly and in many people's mind still do, even though I think at this juncture Microsoft is far from one any longer.
Point still is this: they were “convicted” and would not get away with anything which resembled monopolistic practices.
Apple, on the other hand, is clearly able to get away with this because their market share is exponentially smaller than Microsoft's. Because they retain such a small percentage of the market, they are nowhere close to being considered a monopoly and therefore are “allowed” to conduct business this way.
I'm not saying it's right. I'm not saying it's wrong. If the tables were turned, you can rest assured Apple would be in a whirlwind of shit methinks.
Lastly, the courts have not yet tested the clause Rich referred to in the post. Apple will probably never allow a precedent to be set. I would be dollars to donuts they would settle before a lawsuit got to the point where a judge or jury were about to render a precedent setting verdict.
I posted about this recently on my blog and the only reason I think Apple haven't been brought up on this is market share as Scott metioned. A quick quote from my post (stats from http://marketshare.hitslink.com)
“Windows accounts for 88.41% of the market with Mac taking 9.61% and the rest including Linux <1%. The same can be said for browsers with Internet Explorer taking up 67.44% with Firefox (21.77%) and Safari (8.02%) bringing up the rear.”
I was only posting with regards to browser but the point about Apple OSX on Apple hardware only is a big one. At least with Windows you can build a PC yourself with whatever you want in it and install it without issue. If you really want OSX on something else it's time to hackintosh the effort. This all definitely smacks of double standards and I hate that. If it applies to one company it should apply to all.