Psystar countersues Apple for anticompetitive business practices

Psystar countersues Apple for anticompetitive business practices

Summary: Those following the Psystar saga will be interested to know that the Miami-based clone maker has fired a salvo in their legal battle with Apple. Psystar has been selling Apple clones with Mac OS Leopard pre-installed since April 2008.

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Psystar countersues Apple for anticompetitive business practicesThose following the Psystar saga will be interested to know that the Miami-based clone maker has fired a salvo in their legal battle with Apple. Psystar has been selling Apple clones with Mac OS Leopard pre-installed since April 2008.

At a press conference yesterday Psystar CEO Rudy Pedraza said that his company is answering Apple's copyright infringement lawsuit Tuesday with a countersuit alleging that Apple engages in anticompetitive business practices.

According to a CNet piece by Erica Ogg Pedraza will sue Apple...

...under two federal laws designed to discourage monopolies and cartels, the Sherman Antitrust Act and the Clayton Antitrust Act, saying Apple's tying of the Mac OS to Apple-labeled hardware is "an anticompetitive restrain of trade,"

Psystar's attorney's are asking that the court invalidate Apple's EULA and for unspecified damages. Apple has 30 days to respond to Psystar's countersuit.

Read my previous Psystar coverage here.

Topics: Hardware, Apple, Operating Systems, Software

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9 comments
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  • Oh this is going to be good

    Apple is going to have a tough time wiggling out of this one and MS have a great opportunity, ad-wise, to strongly differentiate themselves, not that they had any difficulty with that in the first place, but keying into this anti-trust issue would be in their best interests.

    Can't wait to see what the ad guys and Seinfeld (4?) come up with.
    D T Schmitz
    • Probably something like

      Garmin is a monopoly.

      Why?

      Because their software doesn't work on Magellan hardware.

      Everyone has a good laugh at idiots who don't understand what a
      product brand is.
      frgough
      • You cant compare this to firmware.

        Just a thought.. any better examples?
        Been_Done_Before
  • Still laughing

    We're suing Apple because they are colluding with themselves in a
    monopolistic manner by maintaining complete control over their
    product brand.

    The judges and lawyers will have a good laugh, too.

    Methinks Psystar's legal team is their uncle Fred.
    frgough
  • They may have a good point

    They could easily point to manufacturers who created chips that mimic'ed lexmark ink protection chips on their cartridges so they could sell remanufactured and third party cartridges. Judges ruled against lexmark saying they had unfairly locked their customers into only buying lexmark and therefore had a monopoly.

    You could apply that case as existing law, stating that customers who buy apple software are required to buy apple hardware, which then constitutes a monopoly.

    You cant argue the same for unix/windows/linux because you can install it on any type of hardware you want.

    They may have a case.. just need to find a technologically savvy judge.
    Been_Done_Before
    • I want Lexmark Ink on my HP Printer

      That is what you are saying. Apple says you can run any
      OS on their Apple Computer. (that is not anti competitive,
      they even went so far as to write drivers to assist in this)

      People wanted to use any ink on the Lexmark printer
      because ink is a commodity item and Lexmark over
      charges for it. HP, Epson and Canon does too. Since ink is
      a consumable and it's formula is pretty standard across
      the industry, it can be obtained in bulk much cheaper than
      the printer manufactures sell it. The truth is, ink jets are
      like printing on a subscription service. You get the printer
      cheap, but pay high prices for the ink, which is locked to
      the printer and the printer is locked to the ink.

      Apple is not offering their PCs and OS in this way at all.
      Software is not a commodity or consumable. In the
      traditional sense. You don't run out of software, and you
      are not forced to upgrade in order to continue the use of
      your computer.

      So just like using OS X on Pystar, you would in effect like
      to use Lexmark Ink in your HP. But since they are not the
      same thing, consumable vs. non-consumable, the Lexmark
      case is a little out of sync.

      What makes an Apple Computer, isn't so much the
      hardware, but OS X. It is integral to the Apple Experience.
      When people buy an Apple Computer, they are really
      thinking Apple OS. That's where all the action is. So Apple
      says that the action needs to take place on Apple
      hardware. It's theirs to sell, trying to strong arm them into
      selling it separately is wrong and predatory.
      danilko1
      • Good points...

        Your right, its not in direct correllation with the lexmark case, but think of it this way:

        They say you have to buy apple hardware in order to run apple software. It would be like MS saying i have to buy a system they made in order to run windows. MS would lose that arguement in court. The fact that they are already selling the machines with apple running on them tells us that their requirement is not an operational one, but a money driven one, thus anti-competitive.

        I dont know what apple does to check if the hardware is apple, but because they use that hardware lock, it makes it easy to use the lexmark case as a precedence.

        I think its great that you can load other OS's on their hardware, but you cant load thier software on another piece of hardware? Their case may be that they are infringing by reselling something that is not meant for resale, but i could of sworn they were just buying an off the shelf copy of osx and loading it on a system. Does that count as resale, maybe.
        Been_Done_Before
      • Your argument almost sounds reasonable...until...

        You take that argument out to its logical conclusions. Lets take Microsoft and Windows for an example. Lets say that Microsoft notices that the idea of a fused OS/hardware package is working for Apple, and they decide to follow the same route?

        Next time you go to the store you find that when you are purchasing a computer with Windows on it, its always going to be a MS computer! Further, that to run Windows on non-MS hardware would be in violation of the new EULA! MS watches their profits climb due to all the new hardware they are reaping profits on while all the other computer manufacturers find themselves promoting Linux like crazy because its the only OS left that doesn't have to be tied to proprietary hardware.

        I would have to say the public outcry, particularly from those who already have nothing good to say about MS, would be absolute disgust and outrage.

        If there is not a good reason to disallow Apple from binding OSX to so called Apple hardware then there really isn't a sound legal reason for stopping MS from doing it. If one wants to look at the situation beyond simple legal reasoning, and move into the realm of common sense and sound economic/competitive practises then yes, there is very good reason why MS shouldn't be allowed to start selling Windows only in MS hardware tomorrow. And similarly the same reasoning applies to why Apple shouldn't be allowed to be doing that today.
        Cayble
  • ....

    K. Since there are various posts using the word monopoly I'll reply here.

    Before using a word in an attempt to legal argument, look up the definition. You're less likely to get laughed at. Then look up all the pertinent information related to the subject.

    Its really very easy: use Wikipedia. They're right 99.9% of the time.

    OS X = personal computer operating system. Substitutes: MS windows, Linux.

    Now. Let us say you don't wish to buy Apple hardware. By the terms of the EULA, you can't use OS X. Does this mean you aren't allowed to use a personal computer operating system without paying Apple for their hardware? NO. Therefore it is not a monopolistic action.

    You wish to use OS X? Pay Apple the full price for it. Buy their hardware.

    You can buy copies of OS X, yes re-sold, as an upgrade to your previous Apple Operating system. Since you cannot buy Apple Hardware that is not pre-loaded with an Apple OS, this guarantees that any subsequent purchase is going to be an upgrade. Therefore the price of a non bundled copy of their OS is an upgrade cost. Look at the license they are release with.

    So, if you purchase an upgrade version of their OS and install it on non-Apple hardware, you are cheating Apple.

    Now it is not your RIGHT to use OS X. It is just an OS. You will not die if you do not use it. You can use a different one and get similar work and use out of it. Not identical, but similar.

    Now Psystar is selling computers preloaded with upgrade priced versions of OS X. Not OEM priced, or "full" priced. Apple makes most of its money selling hardware preloaded with its software. The upgrade versions of their OS are for customer convenience. If Psystar sells hardware based on the fact that they preload said hardware with Apple's OS without an OEM license agreement... I do think this can be classified as theft from Apple.

    I also note that to make this installation work, they had to modify their hardware to imitate patented and/or copyrighted firmware and hardware. This action alone is illegal and enough for legal action against psystar.

    A tech-savvy judge will simply point out that a user can install Linux or Windows. They are substitutes so the use of OS X without paying the full price to the owner of that software is theft. Next, the judge will point out that they broke multiple copyrights, patents and GPL's to emulate Apple's firmware.

    The only issue I see is the response. What precedent in penalizing Psystar will be set? Will they be forced to pay a steep OEM(read "full price") cost to Apple and then will Apple be forced to provide OEM licenses? I'm not sure this will happen. It would be unconstitutional. Therefore Psystar will probably be told to pay damages and cease operation.

    After which Psystar will find a way to continue operations without preloading their hardware with copyrighted, patented and GPL'ed software. They will then provide the buyer with a way to do the full installation without implicating themselves. This would then make Apple have to persecute the end users as well as have a less powerful case against them.

    It would also mean that many people who like the "it just works"(read most of the time) will end up buying systems preloaded with OSes from other corporations. Or they will buy the Linux preloads Psystar sells.

    Anyone who claims Apple is monopolistic is an idiot. Anyone who claims Apple is a capitalistic corporation looking out for the best interests of the stockholder would be correct. Remember the first rule in financial management is: To maximize the value of the corporation.

    If you have an issue with this, move to China or North Korea. Alternately you could try to change the way most economies and political bodies work. But good luck there.

    Now are Apple's actions anti-competitive? They make an OS and hardware, and sell it together. Nokia does the same with their phones. So do many other phone makers. So does Garmin, the Amazon reader thing. Your DVD player for your TV. And most of the electronics you buy. Granted. They aren't for Personal Computers. I guess PCs are sacred.

    But simply put, anyone who wants to profit from a product that is meant to be sold paired with another product by selling the other half of that product without having shouldered the costs of producing that first half and without any agreement whatsoever with the producer of said first half is guilty of theft. I suspect the courts will find this to be the case, but only after many many years of legal battles, which will turn into extra costs for Psystar. This will force them to raise prices somewhat and make their products less appealing.

    In the mean time, if Apple continues to gain market share at the current rate, and Microsoft continues to lose it, similar companies will probably attempt a similar business model as Psystar. And after a few years, they will be destroyed by Apple.

    As far as I can see, Apple users will profit from this since increased market share will mean more applications developed for the platform. But Apple shareholders will not gain much from this and Psystar owners will lose alot.

    All's well that ends well? eh?
    isulzer