Tag: antitrust

Categories
Technology

Text Message Prices

Recently, the Antitrust, Competition Policy and Consumer Rights Subcommitee examined the state of competition in the cell phone industry.

Senator Kohl stated that “[f]rom 2006 to 2008, the price of sending and receiving a text message among the four largest cell phone carriers increased by 100% from 10 to 20 cents per message” even though “the cost to the phone companies to carry text messages is minimal, estimated to be less than a penny per message, and has not increased.”

Here’s the funny part. Verizon and AT&T argued that the price increases only affect a small percentage of subscribers because most people purchase a text message package instead of paying a la carte. Actually, the price increases affect all subscribers because if the carriers charged 2 cents instead of 20 cents per message, then most subscribers probably would not purchase a package. Or, in the alternative, text message packages would be significantly cheaper.

Categories
Technology

Top 10 Funniest Lines from the Latest Apple Lawsuit

  1. “Unlike most Internet sites, Music Store is accessed with proprietary Apple software, rather than a Web browser.”

    Talk about a meaningless distinction. Safari is proprietary Apple software. Internet Explorer is proprietary Microsoft software. Go Firefox?

  2. “The ‘Online Music market’ is defined as the market for digital music delivered to the consumer by way of Internet download.” “Apple has an approximately 83% market share of the Online Music market.”

    If Apple truly had an 83% market share of the Online Music market, the RIAA wouldn’t have to run around the country suing people who upload and download music via peer-to-peer networks. In reality, if Apple had an 83% market share of the paid music download services market, that would only translate to about 10% of the Online Music market if you accept the plaintiff’s definitions. Apple’s market share would fall even further if you count online purchases of music that gets shipped via CD.

  3. “Online Music also promises superior audio fidelity over time, because unlike CDs, Online Music lasts indefinitely and cannot wear out or break.”

    If that was true, then the “Back Up to Disc…” command on iTunes is superfluous. Unlike subscription-based music services where the digital music files sit on someone else’s servers, iTunes requires you to download your music purchases to your hard drive, which can wear out or break. Gasp! I don’t know what Online Music promises, but it absolutely cannot deliver superior audio fidelity over time compared to a CD unless the retailers start selling digital music in a lossless format. If you purchase online music downloads, you are basically stuck with the original encoding. However, if I have a CD, I can always re-rip the files 5 or 10 years down the line (provided optical drives still exist then), if a better compression algorithm is available. You get superior audio fidelity over time with the CD, not the online music download.

  4. “Just as with Online Music, the variety, reliability, convenience, and environmental friendliness of Online Video make it superior to DVDs purchased from traditional retail outlets.”

    Does buying videos online slow down global warming? I’ve never heard of people buying videos through ITunes for environmental reasons. This is a first. Also, while the iTunes Music Store is great, there’s simply no way that downloaded videos are superior to DVDs. Try lending a downloaded video to a friend. Nice try.

  5. “While a traditional CD can hold no more than 15 to 25 songs, Digital Music Players, by playing music that has been compressed into small digital files, can store from 150 to more than 20,000 songs.”

    Another apples-to-oranges comparison. The plaintiff isn’t really comparing CDs to Digital Music Players, but AIFF to MP3s. The traditional CD can hold a lot more than 25 songs if you compress them (just like on the Digital Music Player).

  6. “[I]n order to play music from Apple’s Music Store, the dominant Online Music retailer, the consumer’s only option in the Digital Music Player market is Apple’s iPod.”

    That’s not true since the consumer can burn the music from Apple’s Music Store onto a CD, and re-rip it into another format compatible with a different Digital Music Player.

  7. “Conversely, Apple also makes the iPod unable to play music sold at its rival’s Online Music stores.”

    Also not true. You cannot play back music in WMA format, but if you burn it onto a CD, you can re-rip it into an iPod-compatible format.

  8. “By preventing the iPod from playing WMA or any other protected music format besides FairPlay-modified AAC format, iPod owners’ only option to purchase Online Music is to purchase from Apple’s Music Store.”

    If the plaintiff was truly concerned about interoperability, she would just buy the CD instead of wanting access to more DRM-protected music files. Alternatively, Amazon now sells DRM-free music. Download away.

  9. “After purchasing their digital music library from Apple, these consumers are locked into making all future Digital Music Player purchases from Apple.”

    In economics, your past music purchases are called a sunk cost. If the iPod really provides an unattractive product, you don’t have to continue purchasing from Apple. Burn your purchases to a CD. Rip them into a different format and go buy a Zune!

  10. “For example, the only difference between Apple 1 GB and 4 GB models of its iPod Nano is the capacity of their NAND flash memory parts. At current spot prices in the NAND flash memory market the 1 GB part costs $4.15, while the 4 GB part costs approximately $9.67. Nonetheless, Apple charges an additional one hundred dollars for the 4 GB model.”

    If it ain’t worth a $100 more, then don’t buy it. But everyone does because by paying 67% more, you end up with an iPod nano with four times the storage capacity.

Categories
litigation

BeOS is Better than Windows

From the Complaint filed in Daisy Mountain Fire District v. Microsoft Corporation:

Software companies offering superior operating systems and/or lower prices (namely, companies such as Digital Research, Inc. (“DRI”), International Business Machines (“IBM”), and Be, Inc.) were not able to compete with Microsoft because of Microsoft’s unlawful conduct.

C’mon. You can’t be serious. I’m no fan of Microsoft, but to claim that BeOS couldn’t compete because of Microsoft’s unlawful conduct is absolutely ridiculous. All this time, I thought BeOS was competing against Mac OS, not Microsoft Windows. Instead of resolving this problem in the courtroom, the Daisy Mountain Fire District (and similarly situated government entities, agencies and political subdivisions of the State of Arizona) can take a truly meaningful stand by supporting other operating systems, such as Mac OS X, Linux, or even the BeOS-inspired Haiku open-source operating system. And, it’s not like Microsoft Word and Microsoft Excel are the only two choices out there. Google Apps anyone? Suing and getting a coupon back doesn’t change the market dynamics. Switching to alternative operating systems and applications does.