[Macworld]

Post your comments for Changed antitrust rules could curb tech mergers here

[jmincey]

This is very welcome news -- for the United States, for the world, and for the prospects of a vibrant and innovative technology industry in general.
Jeff Mincey

[heisetax]

Does that mean that Apple will be facing an antitrust ruling with their music store?

[mdawson]

Agreed. Mergers and buyouts should be necessarily difficult to accomplish. Rampant mergers and buyouts have resulted in oligarchies in banking, music, news, etc. With little choice consumers have fewer options and heavily skewed information.

[leicaman]

heisetax said:

Does that mean that Apple will be facing an antitrust ruling with their music store?

70 percent doesn't qualify as a monopoly, so the answer is no.

[himbo]

[quote name='leicaman']
>

heisetax said:

> Does that mean that Apple will be facing an antitrust ruling with their music store?

70 percent doesn't qualify as a monopoly, so the answer is no.

Especially when the competition (Amazon & Wal-Mart) is prominent and well-backed.

[Kennethfcooper]

[quote name='himbo']
> [quote name='leicaman']
> >

heisetax said:

> > Does that mean that Apple will be facing an antitrust ruling with their music store?70 percent doesn't qualify as a monopoly, so the answer is no.Especially when the competition (Amazon & Wal-Mart) is prominent and well-backed.

Except that Varney has signaled that the DOJ actions will be unpredictable.

[mdawson]

1. What does the iTunes Store have to do with mergers?
bq. Apple has not bought up nearly every online music distributor in order to squelch competition or boost their market position. The iTunes Store is solely a creation of Apple, Inc. It does not and has never had any affiliation with any other media distribution company. The iTunes Store is the number one online media download service based solely on consumer preference and nothing else.
2. In what way is the iTunes Store in any way violating anti-trust law?
bq. Apple sells content; they do not own content. Regardless of how much market share Apple gains, Apple will never control the content or its distribution; that power lies solely in the hands of the content providers. The only thing Apple can control is their products, Apple has always rigidly done so and it is perfectly legal for Apple to have 100% control of their brand as they see fit. No consumer is in any way bound to buy Apple products in in any market let alone order to enjoy music, videos, television shows or movies. It is impossible for Apple to violate anti-trust laws with regard to the iTunes Store.

[himbo]

Kennethfcooper said:

Except that Varney has signaled that the DOJ actions will be unpredictable.

"Unpredictable" does not mean that they will go after companies that are clearly not in a monopolistic position. It means that companies that were able to get away with monopolistic or near-monopolistic practices previously without challenge will no longer be able to count on being able to continue to do so.

A year or two ago, there may have been a viable argument to be made against the iTunes store, but although it is still inarguably at the top of the pile, it is no longer without viable competitors.

[mdawson]

Quote

himbo wrote:

>

Quote

A year or two ago, there may have been a viable argument to be made against the iTunes store, but although it is still inarguably at the top of the pile, it is no longer without viable competitors.

While I agree with the first paragraph in your post, the assessment above is incorrect. Even if Apple were the only legitimate media download store, Apple would still not be able to violate anti-trust. As I stated in my first post in this thread, Apple does not control content and therefore, does not, never has and never can under any circumstances control the distribution of media.

People were buying music and video long before the Internet or the iTunes Store. No requirement does, ever has or ever will exist that requires the use of the iTunes Store to acquire content. No requirement does, ever has or ever will exist that requires the use of Apple products to enjoy content. Whether there are competitors to the iTunes Store or not, the content providers have the ultimate power here as they clearly demonstrated when they colluded against Apple backing Amazon, eMusic, et al., with non-DRM content at the exclusion of the iTunes Store. The actions taken by the major labels were the only anti-trust violation with regard to the iTunes Store; Apple was not the one breaking the law.

Anti-trust is not about having the largest piece of the pie. The anti-trust laws are about punishing those that abuse their market position through collusion (the major labels), price fixing (the major labels, again) and stifling competition (Microsoft). Apple is in no position to do any of these things in any of their business ventures. Apple is by no means perfect, but they are hardly a monopoly in anything let alone positioned to violate anti-trust laws.

[danviento]

Question One: Are consumers being hurt by Google's success?
Question Two: Is there any price fixing involved with Google's search business?

The answer to both of these is no, it's not happening. Measures like those the BHO Admin is taking are merely steps for more government control. We saw how Bush let the Europe run roughshod over M$, and now Obama all but endored their looting of Intel in his obvious silence. Funny how states like Germany out-and-out sponsor AMD, and call it profiteering when Intel can sell their product for less.
With this move to copy Europe's method of seizing or threatening to seize a company's funds as means of instilling fear and control, it should jolt people awake to the fact that the man is trying to do exactly what he said- be more like europe, welfare state and all. This not the creeping socialism we're used to seeing in America over the last century, this is the hurry-up lurch that's right out in the open for all to see. It's now a question of can it be staved off long enough to get enough of the sympathizing politicians out of office and out of our way.

[cphoffman42]

[quote name='leicaman']
>

heisetax said:

> Does that mean that Apple will be facing an antitrust ruling with their music store?70 percent doesn't qualify as a monopoly, so the answer is no.

That's not necessarily correct. Antitrust laws govern even when firms have something short of an absolute monopoly because firms with large market shares are able to affect prices/quality in a number of ways. For instance, if A made 80% of widgets and B,C,D, and E each made 5%, A could effectively raise prices on its own because B, C, D, and E couldn't raise their production to compensate for the loss of A's reduced output. The relevant question is whether a firm has market power, which depends on the specific circumstances of the industry and the way the market works. While you generally need to have a market share higher than 50% to have market power, courts have found market power with smaller market shares (e.g., Toys R Us, which had about 35 or 40% of toy sales - no one else was close to its share and it used its power to coerce toy manufacturers to drop club stores).

As for the specific question of whether the iTunes store has market power, you would have to look at how consumers treat it versus its alternatives (esp. Amazon). I would want to know how many consumers switched from Amazon to iTunes when iTunes dropped DRM and how many switched to Amazon when iTunes adopted variable pricing. Really, though, I think the issue people are concerned with is the tying of the iPod to the iTunes store (as well as the related tying of iPhone ringtones to the iTunes store). But these issues seem to have largely gone away with the move away from DRM (albeit not for video or ringtones, but these are much smaller markets).

[cphoffman42]

> Anti-trust is not about having the largest piece of the pie. The anti-trust laws are about punishing those that abuse their market position through collusion (the major labels), price fixing (the major labels, again) and stifling competition (Microsoft). Apple is in no position to do any of these things in any of their business ventures. Apple is by no means perfect, but they are hardly a monopoly in anything let alone positioned to violate anti-trust laws.
[/quote]

The real argument against Apple was that it was anticompetitively tying sales of iPods to sales of music through the iTunes store. Basically, if you wanted an iPod, you had to also buy music through the iTunes store or on CD. The problem was that Apple had a gigantic market share in digital music players (not sure on the specifics, but I think well over 80% in the US), so it could leverage that market share to increase its share of digital music downloads. The issue has mostly gone away with the switch to DRM-free music (which makes it easy to download music elsewhere and import into iTunes), but it was a legitimate concern a year or so ago.

[cphoffman42]

danviento said:

The answer to both of these is no, it's not happening. Measures like those the BHO Admin is taking are merely steps for more government control. We saw how Bush let the Europe run roughshod over M$, and now Obama all but endored their looting of Intel in his obvious silence. Funny how states like Germany out-and-out sponsor AMD, and call it profiteering when Intel can sell their product for less.

With this move to copy Europe's method of seizing or threatening to seize a company's funds as means of instilling fear and control, it should jolt people awake to the fact that the man is trying to do exactly what he said- be more like europe, welfare state and all. This not the creeping socialism we're used to seeing in America over the last century, this is the hurry-up lurch that's right out in the open for all to see. It's now a question of can it be staved off long enough to get enough of the sympathizing politicians out of office and out of our way.

The European complaints against Microsoft and Intel had a lot more behind them than you suggest. Intel, for instance, was offering substantial discounts to firms that didn't use AMD chips in any of their products. This wasn't a typical volume discount (since it wasn't related to the slight uptick in sales to those firms), it was a payment for not using a competitor's products. Now maybe the circumstances aren't sufficient to justify the large fines against Intel - I don't know enough about it to say - but it isn't an entirely frivolous action.

As for the arguments about creeping socialism, etc., there is pretty much a bipartisan consensus on how antitrust laws should be enforced. There are some differences at the margins (whether specific mergers or specific conduct should be challenged), but both sides agree on the general principles that should be applied. Believe it or not, the same is actually true of the EC, which is, if anything, slightly more conservative than the US in many cases (esp. in cases involving state aid). But the cases that make headlines in the US are those involving major American firms and large fines.

Finally, on the "silence=endorsement" argument, the only instance I can think of where a US official explicitly questioned an EC antitrust decision (or vice-versa) was in the Microsoft case, and the Department of Justice Antitrust Division got some pretty bad press over that. It's typical for officials in both jurisdictions to hold their tongues about decisions in the other and let any criticisms happen through less official channels.