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For six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul

Wednesday, January 03, 2007

Apple Faces Federal Monopoly Suit

Me, in WinInfo:
Apple Computer finally knows what it's like to be Microsoft: a company that thoroughly dominates a market, shutting out its competition through artificial links between its products. Unfortunately, with that kind of success comes increased scrutiny, and thanks to a recent federal ruling, Apple is about to find itself in court facing illegal monopoly charges.

Apple sought to have the suit thrown out. But in a December 20, 2006, ruling, US District Judge James Ware denied Apple's request, letting the lawsuit go forward. "Apple has presented no reason for the Court to dismiss the Cartwright Act claim or the common law monopolization claim while allowing Plaintiff's federal antitrust claims," the court order reads. "The Court denies Apple's Motion to Dismiss Plaintiff's anti-trust claims."

The big question, of course, is whether the plaintiffs in this complaint can succeed in court. Currently, Apple controls about 83 percent of the online music market, 75 percent of the online video market, more than 90 percent of the hard drive-based MP3 player market, and more than 70 percent of the flash memory-based MP3 player market. Those are heady numbers, similar to those Microsoft enjoys in the OS market. And certainly, Apple has actively worked to ensure that its products work only with each other and not with competing solutions. Is that illegal? We might just get the chance to find out.
If you're into history at all, you know that "what if" is a fun game. I've often wondered what the world would be like, for example, if Apple had taken up Microsoft's late 80's offer and made the Mac OS the standard on PCs. I suspect we'd see an Apple today that was even nastier than Microsoft, but of course we'll never know. But if this iPod/iTunes case does go to court, maybe we'll get a peak at this alternate history. It will be interesting regardless.
[ Posted at 1:46 PM | Permalink ]


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