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  • Monopoly Investigation of Apple Widens: Report


    The US Department of Justice's probe into Apple's business practices is expanding beyond how the company deals with record companies, according to a report in the New York Post picked up by Boy Genius Report today. Several sources quoted by the NYC tabloid claim that the Justice Department has contacted other big media and technology companies to ask about Apple's way of doing business. The probe marks an ironic twist to Apple's success story, where after years of being a marginalized outsider the company now stands accused of similar monopolistic practices it often decried in competitors like Microsoft and IBM.

    The Department of Justice was known to have begun an investigation into how Apple deals with music labels around iTunes. In particular, one complaint that the company was pressuring labels not to participate in Amazon's "MP3 Daily Deal," a promotion in which Amazon got exclusive access to new tracks, had come under intense scrutiny. The new report indicates, however, that the DoJ is looking to many more of Apple's business partners, including film studios. "The [Justice Dept.] is doing outreach," one Hollywood industry source contacted by the Post claims, adding that Apple "can't dictate terms to the [film] industry." Referring to controversies following Apple's rejection of Flash on its mobile devices, the source said that the "Adobe thing is just inviting the wrath of everybody."

    What the Post called a "senior source at a media company" had a pointed warning for Steve Jobs: "If Apple thinks it's going to increase its monopoly with the iPad, it should look at the history of other walled gardens." The term "walled garden" has often been used to describe the unjailbroken iPhone OS platform, where Apple controls access to what apps and services are available on the device. It's unclear what the unnamed source was referring to specifically, but one example of such a "walled garden" would be America Online, which allowed access to certain internet services in the US through a proprietary portal. Though the service was an early introduction for many non-technical users to the Internet, and grew through the 90s to a userbase of over 25 million subscribers, but plummeted as low-cost access to the internet and a wide array of offerings on the Web spread.

    Apple's rapid growth - the company now surpasses Microsoft in market capitalization - combined with its often "my-way-or-the-highway" partnership negotiation style pretty much guaranteed that they would face challenges. As the government learned when it took on Microsoft over ten years ago, though, finishing an anti-trust case is fraught with difficulty. Expect years of negotiations, lawsuits and counter-lawsuits, followed by a settlement that satisfies nobody and Apple being overshadowed by whatever new technology innovators emerge in the 2020s.
    This article was originally published in forum thread: Monopoly Investigation of Apple Widens: Report started by Paul Daniel Ash View original post
    Comments 18 Comments
    1. Evilsaint's Avatar
      Evilsaint -
      Wonder what wud be the outcome
    1. whereswaldo's Avatar
      whereswaldo -
      Didn't this happen to Microsoft 10 years ago, boy have the tables turned
    1. Oddphone's Avatar
      Oddphone -
      Was it not this type of government inquiry that allowed Apple to gain ground on Microsoft?(years of focus from tech to legal?)Apple incurring the wrath of their own 20+ year old cry, Poetic justice.Reminds me of the saying " What goes around comes around"..... and it sure does. Whats good for the goose.......
    1. dhruvmalik's Avatar
      dhruvmalik -
      This is all bull... Once someone becomes successful in their venture, its looked upon as being illegal. Of course every company would suggest others don't participate and only give them exclusivity but thats a normal part of the business model. Only problem is the DOJ and the U.S calls this all under the table dealing and goes after the organization.
    1. mortopher's Avatar
      mortopher -
      Quote Originally Posted by dhruvmalik View Post
      Only problem is the DOJ and the U.S calls this all under the table dealing and goes after the organization.
      How is this a problem??
    1. unison999's Avatar
      unison999 -
      Difference is MicroSoft do not try to control as much as Apple/Steve Jobes, DoJ have more to work with considering all the email comments Steve Jobes sends out can be used as evidence. Good luck Apple, you will need it.
    1. clarky8's Avatar
      clarky8 -
      Yea it does say that in the article but I don't know why it's a surprise. Every business should have the goal of being a monopoly because the goal of a business is to make money. Number one way to make money is run your competitors out of business.
    1. sziklassy's Avatar
      sziklassy -
      Quote Originally Posted by dhruvmalik View Post
      This is all bull... Once someone becomes successful in their venture, its looked upon as being illegal. Of course every company would suggest others don't participate and only give them exclusivity but thats a normal part of the business model. Only problem is the DOJ and the U.S calls this all under the table dealing and goes after the organization.
      What's the oroblem here. If they are doing nothing wrong, the simple fact that they are successful will have no bearing on the outcome of the matter. It is the methods Apple has taken to gain success. Anyone who can't admit their tctics to be questionable, at the very least, is truly blind.
    1. Luppin's Avatar
      Luppin -
      Quote Originally Posted by clarky8 View Post
      Yea it does say that in the article but I don't know why it's a surprise. Every business should have the goal of being a monopoly because the goal of a business is to make money. Number one way to make money is run your competitors out of business.
      See it's people who think like you that make it so we HAVE to put laws in place in order to protect our rights as consumers, I'm sure you'd be real mad if Apple completely monopolized the entire mobile phone industry just to make the base price for any phone $1000
    1. Jahooba's Avatar
      Jahooba -
      Quote Originally Posted by Luppin View Post
      See it's people who think like you that make it so we HAVE to put laws in place in order to protect our rights as consumers, I'm sure you'd be real mad if Apple completely monopolized the entire mobile phone industry just to make the base price for any phone $1000
      I don't think it's so cut and dry. America puts safeguards in place so that monopolies are non-persistant. But even a company that's not trying to become a monopoly can do so by accident if they create a consumer niche that has not yet been filled.

      That's all well and good if it's shown that other companies can't offer the same kind of product given open competition. But the trouble here is the ethics that comes into play when you try and bully everyone else from encroaching on your niche. Apple is basically strong-arming anyone that even gets close to offering a competing service, and that's a no-no. This isn't Chicago politics, there are rules and boundaries that cant be crossed without SOME type of consequences.
    1. erawsd's Avatar
      erawsd -
      Quote Originally Posted by clarky8 View Post
      Yea it does say that in the article but I don't know why it's a surprise. Every business should have the goal of being a monopoly because the goal of a business is to make money. Number one way to make money is run your competitors out of business.
      There isn't really anything wrong with being a monopoly. Where you run into problems is how you use that influence to shape the rest of the market. You can't punish someone for also supporting a competitor -- at least not as overtly as Apple allegedly did.
    1. rhekt's Avatar
      rhekt -
      Quote Originally Posted by whereswaldo View Post
      Didn't this happen to Microsoft 10 years ago, boy have the tables turned
      thats so true. forgot about that
    1. sziklassy's Avatar
      sziklassy -
      Saying that there is nothing wrong with a monopoly is not understanding the entire definition. It is not simply having control or owning all (or most) of a certain market. That is only part true. It is also having complete power over how everyone else has access to said products. Whether this control is being abused or not really isn't the issue. Having such a control in the first place is considered unlawful.
    1. CaptainChaos's Avatar
      CaptainChaos -
      Resorting to shady business tactics puts a huge taint on your company, but in today's world that doesn't seem to matter to the masses. People need to wake up.
    1. roshansri's Avatar
      roshansri -
      Hi! I'm a PC and I've been through all this , NOW YOUR SCREWED !!!

      I agree but this is all talk and either way apple will still come out with maybe a couple of bumps and scratches in 10 years, but I do hope they go through hell. And the word Monopoly would be an understatement for this considering the ethics this company has and how they have scrutinized so many leading companies like adobe let alone the horrific stories that you hear from foxxcon sector where anything "i based" is made. Truly apple needs to answer and that too STEVE JOBS for that matter.
    1. erawsd's Avatar
      erawsd -
      Quote Originally Posted by sziklassy View Post
      Saying that there is nothing wrong with a monopoly is not understanding the entire definition. It is not simply having control or owning all (or most) of a certain market. That is only part true. It is also having complete power over how everyone else has access to said products. Whether this control is being abused or not really isn't the issue. Having such a control in the first place is considered unlawful.
      Thats not true. There are "innocent" monopolies where it is not at all unlawful. The US government can't do anything unless it can prove you've done some shady things to obtain or maintain your monopoly.
    1. riku98523's Avatar
      riku98523 -
      Quote Originally Posted by Jahooba View Post
      I don't think it's so cut and dry. America puts safeguards in place so that monopolies are non-persistant. But even a company that's not trying to become a monopoly can do so by accident if they create a consumer niche that has not yet been filled.

      That's all well and good if it's shown that other companies can't offer the same kind of product given open competition. But the trouble here is the ethics that comes into play when you try and bully everyone else from encroaching on your niche. Apple is basically strong-arming anyone that even gets close to offering a competing service, and that's a no-no. This isn't Chicago politics, there are rules and boundaries that cant be crossed without SOME type of consequences.
      Why does Apple get sued by Nokia? Its because Apple moved in on their "niche" and used Nokia's patents without getting the rights to do so. Practically everything Apple does other people have already done so no one is invading Apple's space.