You may have heard that the Department of Justice decided to launch antitrust litigation against Apple and some major publishers for alleged price fixing and that most of them decided on the same day to settle. The alleged sin was that Apple and the publishers decided to go with the agency pricing model in which the publishers get to set the prices for their books in the iBooks Store, while Apple takes, I believe, a 30% cut.
So late last night I read this:
“How Steve Jobs Got Apple Into Trouble Over Ebooks” by Lance Ulanoff, Editor-in-Chief of +Mashable.
Wow, is this guy clueless.
And if Steve Jobs really thought Amazon screwed up, he was clueless as well. Amazon is WINNING.
Jobs pushed the agency model on the publishers? I don’t think so. They preferred that model but couldn’t get Amazon to go along with it without Apple’s help. It’s the screw-your-customers model and it wouldn’t have been good for the publishers over the long haul. They want high ebook prices so that they can hang onto their outdated IP-dependent business model of selling paperbacks and hardcovers in big box brick & mortar stores for as long as possible.
As discussed on Tech News Today #377, the European Commission has decided to open an investigation into the patent wars between Apple and Samsung.1 According to EU Competition Commissioner Joaquin Almunia, “Apple and Samsung is only one case where IP rights can be used as an instrument to restrict competition.”2
Since patents are aimed at limiting “unbridled competition” of a free market,3 this should come as no surprise. As I have discussed elsewhere,4 the state is schizophrenic. It grants monopolies aimed at limiting competition (patents and copyright), and then penalizes companies for using (“abusing”) them, in contravention of state antitrust law–so that there is a “tension” between these state laws. Here’s an idea: get rid of both antitrust and patent law.
As reported in the Wall Street Journal, memory chip manufacturer Rambus has lost its antitrust case against competitors Micron Technology Inc. and Hynix Semiconductor Inc.
Rambus had sought $4 billion in direct damages for the harm it allegedly suffered in the case, an amount that can be instantly tripled under California law. It also asked for punitive damages.
Rambus, a Silicon Valley designer of technology used in memory chips, accused Micron and Hynix of violating antitrust laws by conspiring to prevent Rambus technology from gaining traction in the market and fixing the price of memory chips.
The jury deliberated 8 weeks after a 3-month trial. Good result!