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Re: Antitrust Against Apple Approved

In article <dsh8ri$1rnc$1@xxxxxxxxxxxxxxxxx>,
 Roy Schestowitz <newsgroups@xxxxxxxxxxxxxxx> wrote:
> "Judge Ware has given Slattery the go-ahead to proceed with his
> monopolization claim under the federal Sherman Antitrust Act, according to
> eHomeUpgrade. Slattery claimed that Apple's system freezes out competitors,
> and while one antitrust expert called it a long shot, another antitrust law
> professor said that the key to such a lawsuit would be convincing a court
> that a single product brand like iTunes is a market in itself separate from
> the rest of the online music market."
> http://arstechnica.com/journals/apple.ars/2006/2/9/2822

There's more than that.  He'll have to make a case that Apple has 
monopoly power and has misused it.  Just having a monopoly in the market 
is not sufficient, as (contrary to popular belief) monopolies are not 
forbidden under antitrust law.  It is misuse of monopoly power that is 

That's going to be the hard part, as the reasons for Apple's success in 
the player and music store market are:

1. Well-designed players, built solidly with good components.

2. Music player software for the computer that works well with the 

3. A music store that works well with the software and the player.

4. A music store that is interesting.  It's full of lots of extras that 
make it an interesting place to hang out on the net.  For example, they 
have a section of celebrity playlists, where they get playlists from 
various celebrities (musicians, actors, etc) with comments.  They have 
plenty of other interesting classified collections of songs, interesting 
reviews, artist bios, etc.  Basically, its a place you can easily spend 
hours at, just poking around, discovering new music.  They've also got 
podcasts in there, fitting in perfectly with the software and the iPod.  
And video now.

5. Good support.  Compare Apple's support information for iPod and 
iTunes at www.apple.com to the support pages of most of the other 
vendors, and Apple is way ahead.

6. Accessories.  You can get iPod accessories all over the place (Best 
Buy, Circuit City, Office Depot, Car Toys, Target, Wal-Mart...even at 
places that don't sell iPods and do sell other players, you can often 
find iPod accessories).

The key is that they have *all* of this.  The other players have at best 
managed *some* of it, and that makes a big difference.

If you don't think #2, #3, and #4 are important, just consider the iPod 
Shuffle.  That thing doesn't show you what song is playing, and doesn't 
let you change the song order on the fly--your choices are play them in 
the order of the playlist, or play them shuffled.  Pretty much *every* 
*other* flash player has it beat when you just look at the player.  Yet, 
the Shuffle pretty much instantly became the best selling flash player.  
That's because it was the only one that did well on #2 *and* #3 *and* #4.

There's nothing stopping someone else from doing this.  Hell, iTunes is 
available for Windows, and the music store works the same with Windows 
iTunes as it does with Mac iTunes, and the iPod works as well with 
Windows iTunes as it does with Mac iTunes.  Someone who can make good 
players, like Creative, could say "to hell with Windows Media Player or 
Music Match or whatever we are bundling this week" and write their own 
good player (they could even start with something open source, like 
Amarok, to save time).  They could start a music store, and make it have 
the features of the iTunes store.

(BTW, interesting bit of trivia: the iTunes Music Store is implemented 
in Java.  If anyone says you can't build a server application to take a 
really high load in Java, just point them to iTMS for a counter example).

Anyway, it's not illegal use of monopoly power if the only thing you are 
doing to keep ahead of your competitors is to refrain from making big 
mistakes. :-)

--Tim Smith

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