Monday, July 6, 2009

DOJ to "review" Apple's relationship with AT&T

Apparently, the Department of Justice is looking into possible anti-trust law suits against large telecom carriers.

From the WSJ:

"Among the areas the Justice Department could explore is whether wireless carriers are hurting smaller competitors by locking up popular phones through exclusive agreements with handset makers, according to the people. In recent weeks lawmakers and regulators have raised questions about deals such as AT&T's exclusive right to provide service for Apple Inc.'s popular iPhone in the U.S."


In other words, the government, under the authority of the Sherman Anti-Trust act, can tell Apple whom they are allowed to do business with and what kind of agreements they are permitted to make.

Anyone else see this is a direct assault on private property rights? Apple developed this product, they own it, and as far as I am concerned, they can do whatever they please with it. The fact that their product has been wildly successful is no basis for a lawsuit.

And even if this notion of illegal anti-competitiveness had any merit, the DOJ has chosen an industry that is highly competitive. Despite competition from Blackberry and Palm and many others, Apple took the risk of allowing only one carrier on its iPhone platform, and despite competition from Verizon and Cingular and many other carriers, AT&T agreed to pick up half the tab for every iPhone that they sell on behalf of Apple.

It looks to me like the market is functioning just fine, and if one thing is for sure, it is that in three or five years when any anti-trust lawsuit finally makes its way into court, the wireless market will not look anything like it does today.

1 comment:

  1. Kevin from AnnandaleJuly 8, 2009 at 8:00 PM

    Feel like DOJ has been down this road before with Microsoft. Doing good business and making piles and piles of money isn't illegal. At least not yet.

    ReplyDelete