In Apple we antitrust
August 7th, 2008 Filed Under Copyright, Lawsuits, Other Commentary
Last month Apple filed a lawsuit against Psystar, accusing them of violating the EULA (end user license agreement) for OS X by installing it on non-Apple hardware. As many people have pointed out, EULAs are nearly always held up in court, so you might think Psystar has no chance. Before you write them off though consider another possibility. What if the EULA, which is clearly anti-competitive, goes so far as to violate antitrust laws?
A EULA is essentially a licensing contract. Software is unique among copyrighted works because it’s often possible to use a single copy on multiple computers at the same time. Whereas something like a music CD has limitations inherent in the medium, software developers must be given some leeway to define the boundaries of the license terms themselves. But that leeway only extends so far.
Like any other contract, its governed by some basic legal principles. Just because a contract, or EULA, claims to take a right away doesn’t mean it has the legal force to do so. Even some standard contract terms are generally indefensible in court.
There are a number of different rationales for this sort of thing. In some cases it’s a matter of one party giving something up while receiving nothing in return. In others its simply a question of rights that you simply can’t give up, even by choice. In this case it seems like there’s a compelling argument that Apple’s EULA is anticompetitive, and perhaps violates antitrust laws.
The biggest question is likely to be what the purpose for limiting their customers to using Apple hardware for OS X is. A look into Apple’s past reveals the likely answer. Before Steve Jobs returned to the company in the late 1990s they experimented with licensing the Mac’s design to third party companies. These companies were able to produce Macintosh clones, and due to low licensing costs they could (and did) undercut Apple’s prices.
Since at that time Apple used very specialized hardware, rather than the generic PC components used for their current Intel platform, they were able to exercise a great deal of control by simply refusing to sell the system ROMs used on Mac motherboards. When Jobs returned to Apple he simply eliminated the clone program for the next version of the Mac OS and that was that. At least until Apple switched to the current Intel platform, which they share with the standard PC.
Is price the only reason Apple is scared of clones? Probably not. After all it’s reasonable to assume that many of Apple’s current Mac customers would continue to be very loyal. What seems more likely is that they’re afraid of someone else becoming the public face of the Mac. Even though it would probably result in more sales for Apple, an endless supply of readily available clones could easily relegate Apple to a sort of prestige brand, with others delivering the computer to the masses.
It would also wrest a lot of control over the company’s public image away from Steve Jobs. From the iMac to the iPod to the iPhone it’s obvious that’s an important point for him. Why do you suppose Apple has made a point of not including support for Sun’s Java or Adobe’s Flash on the iPhone. It’s not because there isn’t demand or it can’t be done. That simply puts too much control over an Apple product in the hands of another company.
In legal terms that creates a problem. The entire point of this provision of the EULA is control. Specifically it’s to keep other vendors from competing with Apple. Now believe it or not that’s not automatically a problem. Except in this case it might be. You see EULAs have one important feature that distinguishes them from most contracts. They’re almost completely one-sided. The software vendor controls them completely.
The amount of power each party to a contract has is another of the basic considerations that determines whether a particular item can be enforced. When one party dictates all the conditions they have to be careful that the contract isn’t completely one sided. The more the contract (or EULA) favors the party writing it, the more likely a judge is to rule against terms favorable to them and unfavorable to the other party.
It’s not actually clear that requiring Apple hardware to be purchased to run OS X is actually favorable for Apple. The benefits of increased sales, and perhaps even becoming a serious threat to Microsoft in the OS market might outweigh the advantages to their current monopoly. What does seem clear is their intent. They believe its in their best interest to avoid free market competition. Whether it is or not it seems equally clear its not in the public’s interest and shouldn’t be allowed.
Another body blow for the RIAA in Michigan
August 6th, 2008 Filed Under Copyright, Lawsuits, Legislation and Regulation, Music Business, Other Commentary
After winning their first ever jury verdict in a file sharing case last year you would expect the RIAA to be riding high on their success right now. But the reality is their victory against Jammie Thomas in Minnesota may be the last one they get in their campaign of lawsuits for P2P file sharing.
Specifically they have two basic problems. The first is the willingness of defendants to fight back. Rather than simply paying the RIAA whatever they ask for to settle, people are insisting on their day in court. As a result the government has started catching up to the RIAA’s tactics, and the more questions that get asked the worse the answers sound.
Perhaps the biggest Achilles heel that’s come to light is MediaSentry. The RIAA pays MediaSentry to provide information which can be used to get subpoenas and eventually identify defendants for lawsuits. The problem is nobody but MediaSentry and the RIAA knows exactly how this is done.
MediaSentry has so far managed to operate without any regulation or government oversight, while also not being required to divulge their investigatory techniques in court. That looks increasingly like it’s going to be changing. The latest assault is coming from Michigan Central University.
University attorneys are asking the state’s Department of Labor & Economic Growth to issue a Cease and Desist Order, requiring MediaSentry to become licensed private investigators before pursuing any further action in Michigan. You can be sure MediaSentry and the RIAA will fight the request, but that may not be a bad thing.
After all its hard to imagine anything more dangerous to the RIAA’s cases than forcing their agents into the bright light of due process.
Recording Industry vs Ray Beckerman
August 1st, 2008 Filed Under Copyright, Lawsuits, Music Business, Other Commentary
Since the RIAA began bringing lawsuits against P2P file sharers on behalf of record labels there has been little incentive for lawyers to get involved. And it’s hard to blame them. After all, the RIAA lawsuits are tailored to look completely legitimate while actually revealing nothing of their investigations. If the defense asks to examine the evidence they claim it’s protected as a proprietary secret. If their bizarre theories on copyright law are challenged they simply stonewall for a couple of years. And when they’re about to lose they simply drop the case and spend another year arguing against paying the defendant’s lawyer fees.
But a few lawyers haven’t just rolled over. One notable example is Ray Beckerman. Despite an occasional tendency for hyperbole, through his blog, titled Recording Industry vs The People, he’s spent many hours shining the light of “guess what they said now” on record label arguments.
He’s also been on the front lines, asking questions the RIAA would rather you not hear the answer to, like just how their contractors conduct investigations. Earlier this year he was invited to share his opinions with judges across the country in the American Bar Association’s publication, The Judge’s Journal. Not surprisingly he accepted, and thanks to the ABA you can read the article for yourself on his webpage.
If you don’t want to read the article here’s the CliffsNotes version. Mr Beckerman lays out in detail a list of problems with the RIAA lawsuits, focusing primarily on how their attorneys have used subterfuge and sleight of hand to make it appear that they have enough evidence to begin the evidence gathering process. Once this has started, he argues, defendants generally have no choice but to settle out of court because they don’t have the resouces to wage a protracted court battle. And in those cases where someone does fight they face very convincing shadow puppets that look a lot like evidence, but really aren’t.
Mr. Beckerman also explains that it’s in the judges’ power to correct the abuse of our Federal courts by the RIAA, primarily by questioning their many ridiculous claims instead of assuming they’re telling the truth. He also explains how the RIAA’s John Doe cases, where the lack of defendant participation in almost the entire case leads to a lack of adversarial checks on the plaintiffs, needs to be actively corrected from the bench.
He also makes an excellent point that anyone who sides with the RIAA would do well to consider, saying “if the court does not understand the technology well enough, it means that the plaintiffs have not pled their claim well enough and their complaint should be dismissed.”
It’s a somewhat long read, but well worth the time. I highly recommend reading it when you have the chance.
Shouting copyright in a crowded theater
July 31st, 2008 Filed Under Copyright, Lawsuits, Other Commentary
The Copyright Clause of the US Constitution may be one of the most misunderstood parts of the document. Not because people don’t understand what it means, but because they seem to think it exists in a vacuum. After all, how else could you justify the lengths to which our government seems prepared to go to protect intellectual property.
But no law exists in a vacuum. Every right you have can potentially be canceled by someone else’s. Take free speech for example. The First Amendment to the Constitution grants every person the right of free speech, but it’s not universal.
If you yell “fire” in a crowded theater you can be arrested. But why? Don’t you have a right to say what you want? Well yes - and no. By yelling “fire” under this circumstance you’ve put other people at risk. Now you’ve infringed on their rights.
Even though there’s no right to be safe written into the Constitution it does exist in a legal sense. In fact there are many rights that were assumed by the Founding Fathers, and therefore they didn’t feel the need to codify them as law. Another example is privacy.
While there’s no Constitutional prohibition against it we can also assume that other people don’t have the right to intrude on your privacy. To be sure there are places we have no right to privacy. If you walk down a public street or enter a public building and someone listens in on a conversation you’re having you can’t sue them for violating your privacy. But if they sneak into your living room and put a microphone in a light fixture it’s a completely different matter.
So why would we give record labels or movie studios the right to filter internet content? In order to do that they first have to “read” the data you’re sending or receiving, and when you send a transmission directly from your computer to someone else’s across the internet you have a reasonable expectation of privacy. Under normal conditions there’s no reason to believe that a third party will have access to your computer’s “conversation” with someone else’s.
The labels and studios, and the lawmakers they’ve bought and paid for, assure us that there’s a pressing need to protect these companies’ rights. They have the right to protect their copyrights and it’s important we help them. And to be fair there’s some truth in that, which is why we have copyright laws. But the people also have a right. It’s a right so fundamental and obvious the framers of the US Constitution didn’t even think it needed to be specifically mentioned.
If we’re going to intrude on that right shouldn’t it be for something more important to our country than an extra couple of million dollars for a record label?
