Apple Claims Jailbreaking An iPhone Is Copyright Infringement

from the jailbreak-this dept

Apple has remained pretty quiet, on the whole, concerning the fact that people "jailbreak" their iPhones to allow them to run non-Apple-approved software on the devices (or to use them on other mobile carriers). However, in responding to an attempt by the EFF to get jailbreaking (and other phone unlocking efforts) declared clear of any potential copyright claims, Apple has now officially said they believe that jailbreaking the iPhone is infringing on their copyright. This is troubling for a number of reasons. It's the same sort of argument that has been used by garage door opener makers and printer makers to prevent competition and interoperability -- which has been struck down repeatedly in the courts.

As the EFF notes, if jailbreaking is determined to be copyright infringement, it opens up a whole host of problems. Automakers could, conceivably create "software" in their cars that only lets you fill up at their approved stations. Breaking that "software" to allow for "interoperability" would then be seen as infringement. Hopefully the Copyright Office sees through this claim and makes it official that jailbreaking is perfectly legal. It's almost ridiculous that we even need to have this discussion. If you buy the device, it should be yours -- to do with it what you want, including putting "unapproved" software on the device.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: copyright, dmca, jailbreaking
Companies: apple, eff


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Chris, 13 Feb 2009 @ 10:40am

    We need another "Act"

    "Automakers could, conceivably create "software" in their cars that only lets you fill up at their approved stations."

    http://en.wikipedia.org/wiki/Magnuson-Moss_Warranty_Act
    We have the Magnuson-Moss warranty act, which among other things, kept car makers from invalidating warranties/requiring the use of OEM only or branded parts.

    I don't understand why we don't to the same thing with technology and EULAs, esp for OSX only on Mac hardware, and only Apple approved apps on iPhones.

    God knows, this clear fails the first sale test.

    link to this | view in thread ]

  2. icon
    PaulT (profile), 13 Feb 2009 @ 11:02am

    Jailbreaking the iPhone or iPod Touch is a signal. It's a message to Apple that people are not happy with their restrictions. There are applications that people want, that are perfectly safe and legal, that are available from some non-iTunes source.

    That's the only message being sent here. Any attempt to class them as illegal or destructive is only a distraction from the truth - there are useful apps that Apple doesn't wish to approve, and people are willing to hack their device in order to obtain them.

    link to this | view in thread ]

  3. identicon
    Matt, 13 Feb 2009 @ 11:04am

    Re: We need another "Act"

    that was one of the few rare examples of a great job in done via politics.

    It does apply to the phone among other things as well. If they offer a warranty and claim is it broken by jailbreaking the phone (and it's not in the contract), magnuson moss would have been thrown around instantaneously.

    We need one that is well done, to deal with preventing anti-competitive actions....that or just repeal the one that says that it's legal for corporations to lobby for their own anticompetitive benefits...I forgot the name of the letter for it.

    that would stop so much of this industry BS.

    link to this | view in thread ]

  4. identicon
    Ima Fish, 13 Feb 2009 @ 11:05am

    Why does Apple need copyright? Obviously they can enforce such provisions in their licenses. If customers want to agree not to unlock their phones, let them. And if a customer choses to unlock, Apple could sue them for breach of contract. Real simple.

    My guess is that Apple wants to directly sue those people and companies creating the unlocking software and techniques, as those entities would not be parties to any license or contract. Thus, they could not be sued for breach of contract.

    Obviously, copyright should not be extended for the sole purpose of allowing entities to sue non-parties under breach of contract.

    link to this | view in thread ]

  5. identicon
    Wingman, 13 Feb 2009 @ 11:06am

    Why do they care?

    Can someone even explain to me why they care what you do with your phone once you own it? Does it hurt them in some way when people jailbreak the device?

    link to this | view in thread ]

  6. icon
    PaulT (profile), 13 Feb 2009 @ 11:09am

    Re: Why do they care?

    Supposedly, if you jailbreak the device then you can get pirated software. Even if you decide not to get pirated software, that's money not flowing through iTunes.

    It's understandable in a business point of view, but it really has bugger all to do with copyright.

    link to this | view in thread ]

  7. identicon
    Jeff, 13 Feb 2009 @ 11:14am

    Mac

    Apple should also change their EULA about their operating system, allowing it to go on non-apple computers too.

    link to this | view in thread ]

  8. identicon
    TSO, 13 Feb 2009 @ 11:15am

    Once I buy it, it's fscking MINE and I will do WHATEVER I PLEASE with it. If you don't like it, you will take it back only from my cold dead hands.

    link to this | view in thread ]

  9. identicon
    Relonar, 13 Feb 2009 @ 11:30am

    Re:

    I agree with you completely!

    The point is if I sell you a license that says you can use my math instructions (software) in ways only I approve. Doing something not approved does not mean I have infringed on your copyright, its another issue that is just as bogus, but again it is not an issue that is about copyright.

    link to this | view in thread ]

  10. identicon
    iyogee, 13 Feb 2009 @ 11:40am

    Re: We need another "Act"

    Talking of Magnuson-Moss Warranty act - We also need an equivalent of Lemon Law for electronics. Lenovo is servicing my Thinkpad tablet since last 9 months, they even extended the warranty to service it til it gets fixed. It has been in their service center 6 times plus two technician visits, they replaced its HDD (3 times), RAM, system board and flash memory chip. But Lenovo (even Dell for that matter) denies warranty replacement even with a similar condition refurbished. For all manufactured equipment (be it a lemon car or iPhone) the consumer should be subject to same laws.

    link to this | view in thread ]

  11. identicon
    AJ, 13 Feb 2009 @ 11:46am

    Make it work for them..

    Apple should keep things the way they are and keep quiet about it. Some people buy the phone because they can "crack" it or whatever, load app's and impress themselves/friends. If they start scaring people, they will eventually drive away this customer base. I'ts amazing how many people have written app's and cracks and the like, thats got to be good for sales...

    link to this | view in thread ]

  12. identicon
    Crimson, 13 Feb 2009 @ 11:52am

    I'm with you. Hopefully the law will come down hard *against* Apple on this.

    link to this | view in thread ]

  13. identicon
    usmcdvldg, 13 Feb 2009 @ 11:58am

    Re:

    Apple doesn't care.

    They lock the phones with AT&T because AT&T agreed to cover part of the purchase price of the phone if they did. Otherwise an iPhone would cost 600+ dollars. AT&T makes their money back by locking you into a two year agreement that will gross between $1900-$2500 depending on your data plan.

    As far as applications go, Apple is not a software company per say. They can't produce a shitty product like Microsoft, and then blame third party vendors or hardware manufacturers. Apple manufactures and supports the hardware and software; and they survive by virtue of being able to say things like "it just works."

    link to this | view in thread ]

  14. identicon
    ChimpBush McHitlerBurton, 13 Feb 2009 @ 12:00pm

    iToaster

    I don't know what you yobs are getting so excited about.

    The Apple iToaster(tm) has been around for years now, and they have successfully sued and/or jailed countless criminals for using bread products outside the iBread(tm) line. Hell, I remember the first time I broke the conventions of the DMCA by subverting my iToaster software and rigging it to toast a bagel...

    The toast police were at my door within the hour, and I went through a lengthy interrogation with them until I was able to convince them that the bagel incident was a simple misunderstanding of the device's features, due to a lack of any real instruction manual. All that I had was that glib black pamphlet showing a bread slice with one bite taken out of it.

    I got a slap on the wrist with the admonition that I'd not be treated so gently next time. Needless to say, all my toast these days is made from pure, unadulterated iBread(tm). And I LOVE it!

    Sorry Steve, I was totally joking when I said cancer was God's way of punishing you for being such a close-minded corporate robber-baron.

    Long live the toast police.

    link to this | view in thread ]

  15. identicon
    usmcdvldg, 13 Feb 2009 @ 12:03pm

    Re:

    One should not be allowed to license the use of Hardware IMHO. This is where the law needs focusing on this issue. If I buy a piece of hardware, ie not IP. It's mine, I should be allowed to do with it what I please.

    I can understand voiding warranties under, and having terms of sale. But the purchase of a physical item should be just that, an implicit transfer of rights over said object.

    link to this | view in thread ]

  16. identicon
    Anonymous Coward, 13 Feb 2009 @ 12:04pm

    Re: Re:

    600!!!!!


    Oh...you mean like the original pieces of crap they sold as iPhones?

    link to this | view in thread ]

  17. identicon
    Michael Long, 13 Feb 2009 @ 12:05pm

    Goodbye subsidized phones

    One side-effect of the EFF's efforts is that they also want to do away with the practice of locking phones to carriers... which would have the unintended side-effect of completely destroying the practice of subsidizing phones.

    Who is going to sell you a $500 phone for $200 upfront when you can immediately terminate the contract and switch the phone to another carrier?

    link to this | view in thread ]

  18. identicon
    usmcdvldg, 13 Feb 2009 @ 12:10pm

    Re: Why do they care?

    They lock the phones with AT&T because AT&T agreed to cover part of the purchase price of the phone if they did. Otherwise an iPhone would cost 600+ dollars. AT&T makes their money back by locking you into a two year agreement that will gross between $1900-$2500 depending on your data plan.

    As far as applications go, Apple is not a software company per say. They can't produce a shitty product like Microsoft, and then blame third party vendors or hardware manufacturers. Apple manufactures and supports the hardware and software; and they survive by virtue of being able to say things like "it just works."

    Also this gives them the ability to control what you can do on the phone, take tethering for instance. AT&T would be pissed if I wrote an app that routed the iphones wifi connection through the cell phone internet connection, and every computer in my house was running of my phones wifi.

    They specifically forbid for the longest time third party browser for fear of security holes, a flash or active x engine ect ect ect.

    link to this | view in thread ]

  19. identicon
    usmcdvldg, 13 Feb 2009 @ 12:11pm

    Re: Re: Re:

    Yes except those were before they refined the manufacturing process. Back then if not for the agreement with AT&T or any other carrier they would have cost $1000+

    link to this | view in thread ]

  20. identicon
    Anonymous Coward, 13 Feb 2009 @ 12:26pm

    Re: We need another "Act"

    I don't understand why we don't to the same thing with technology and EULAs, esp for OSX only on Mac hardware, and only Apple approved apps on iPhones.

    Since the Magnuson-Moss warranty Act was passed there has been a major rise in corporatism in the US and it is unlikely that anything like it could be enacted today. There are even those who want to see it repealed because they believe that it interferes with the "free market". The theory is that manufacturers should be allowed to place whatever restrictions they want on products and that if people don't like the restrictions then they don't have to buy the products. In other words, "whatever the market will bear".

    link to this | view in thread ]

  21. icon
    Mike (profile), 13 Feb 2009 @ 12:43pm

    Re: Goodbye subsidized phones

    One side-effect of the EFF's efforts is that they also want to do away with the practice of locking phones to carriers... which would have the unintended side-effect of completely destroying the practice of subsidizing phones.

    Um. No. It would not. You can still be required to sign a long term contract on the service in order to get the subsidy.

    That has nothing to do with jailbreaking.

    Who is going to sell you a $500 phone for $200 upfront when you can immediately terminate the contract and switch the phone to another carrier?

    Again, that has nothing to do with copyright.. but.. um. Ok.

    link to this | view in thread ]

  22. identicon
    Anonymous Coward, 13 Feb 2009 @ 12:45pm

    Re: Goodbye subsidized phones

    You're assuming that the other side effect of consumers won't pay that much for a phone so the manufacturers will have to charge a price that people will pay. Now this means that Motorola, LG, Samsung, Nokia etc won't be able to make their 40,000% profit, and they'll just have to find ways to manufacture phones in a better, more cost effective way. The only reason why phones are so expensive is because of subsidizing of the phones. The same thing happens when the government gets involved in subsidizing things. Look at universities, once the government got involved in providing money to them on an annual basis, the cost of a degree didn't get cheaper, it got more expensive.

    link to this | view in thread ]

  23. identicon
    Anonymous Coward, 13 Feb 2009 @ 12:46pm

    Re:

    LOL

    link to this | view in thread ]

  24. identicon
    Anonymous Coward, 13 Feb 2009 @ 12:52pm

    This attitude of Apple's is exactly the reason that they have never, and will never, get my money.

    Apple #1 - Their goal, their belief, their attitude. Anyone and everyone comes dead last to their bottom line. Nevermind the people that actually buy their products, any complaints they may have on that front are irrelevant. Their bottom line is all they care about.

    link to this | view in thread ]

  25. identicon
    George, 13 Feb 2009 @ 2:00pm

    Re:

    link to this | view in thread ]

  26. identicon
    George, 13 Feb 2009 @ 2:08pm

    Re:

    not really! Hacking is not a signal that people are not satisfied with what they are getting and that's not at all why hackers try to break/exploit software. You do it because you can. A sign of not being satisfied with iPhone and iPod Touch would be not buying either one of them and this is clearly not happening.

    As far as the article goes ... jumping from the Apple's layers to what an automaker might do it a huge stretch. Also you really need to get your story straight. Automakers, at least in the US, undergo a lot of scrutiny and I don't think that there has been a single case of anyone *jailbreaking* or even hacking the software that comes on their car. Considering how much of a modern car is controlled by the onboard computer, messing with it is close to insane.

    link to this | view in thread ]

  27. identicon
    Anonymous Coward, 13 Feb 2009 @ 2:46pm

    Re: Re: Re: Re:

    And fanboys would have paid for it!

    link to this | view in thread ]

  28. identicon
    Usmcdvldg, 13 Feb 2009 @ 2:56pm

    Re: Re:

    Although it is usually a case of removing an electrical component as opposed to altering software, I think removing factory installed speed limiters still qualifies as jail breaking, and happens quite frequently.

    link to this | view in thread ]

  29. identicon
    Allen, 13 Feb 2009 @ 3:01pm

    jail breaking

    That's like Sony selling a universal remote and telling you that you can only use it on there products.

    link to this | view in thread ]

  30. identicon
    anymouse, 13 Feb 2009 @ 3:26pm

    Reality Check time

    "Considering how much of a modern car is controlled by the onboard computer, messing with it is close to insane."

    It's a good thing there are no aftermarket devices that can be used to improve fuel efficiency, increase horsepower and torque, and increase overall engine performance. Oh wait, I can replace the 'fixed' chip in my Ford truck with a device that 'hacks' (or replaces) the signal and allows me to tune the engine performance to the task at hand (towing, freeway, fuel efficiency, etc). Guess I must be Insane in the Membrane...

    link to this | view in thread ]

  31. identicon
    Michael Long, 13 Feb 2009 @ 3:56pm

    Re: Re: Goodbye subsidized phones

    "EFF's third proposal asks for a renewal of an exemption previously granted for unlocking cell phones so that the handsets can be used with any telecommunications carrier. Carriers have threatened cell phone unlockers under the DMCA to protect their anti-competitive business models, even though there is no copyright infringement involved in the unlocking. Instead, the digital locks on cell phones make it harder to resell, reuse, or recycle the handset."

    http://www.eff.org/cases/2009-dmca-rulemaking

    Okay?

    link to this | view in thread ]

  32. identicon
    Michael Long, 13 Feb 2009 @ 4:02pm

    Re: Re: Goodbye subsidized phones

    Look at iPhone sales before and after AT&T decided to subsidize the $500 phone down to $200.

    And modern phones are expensive because they contain color LCD touch screens, miniaturized processors, 3G, GPS, and WIFI chips, LiPo batteries, and so on. They're no longer phones, they're pocket computers.

    link to this | view in thread ]

  33. icon
    Mike (profile), 13 Feb 2009 @ 5:00pm

    Re: Re: Re: Goodbye subsidized phones

    Okay?

    That doesn't support your point at all. Yes, you will be able to break the contract and switch your phone to a different provider (tech permitting), but doing so will then mean that you have broken the contract and need to pay the subsidy back. That's fair. And has nothing to do with the copyright question.

    No one is saying you can't offer a subsidy to go along with a long term contract. They're just saying if you offer that, there should also be a fair and legal option to NOT accept the subsidy and unlock the phone.

    link to this | view in thread ]

  34. identicon
    SEan, 14 Feb 2009 @ 12:09am

    Re: Re:

    This is idiotic. Hacking IS a signal people are not satisfied, but that hacking is formulated in your idea that people do it because they can. Yes, sure, you can't disagree with that. But then once it has been hacked, people begin to build off that hacker's work, and create tools, programs an options previously not available - and clearly of want because it was created by someone who wanted this function - clearly others would too.

    To say that consumers would show their dissatisfaction with a product by not buying it ignores the existence of various markets. This is consumer electronics, and more importantly, a wi-fi enabled, large-screen, touch-screen device that is basically a computer - so yes, people buy it knowing that it may lack functions out of the box, but with their own work and the work of others, they can get the machine to work the way they want.

    In this instance, you can see how hacking really does increase the value of the device, how it represents lack of addressing the software market and how ignorant you are with the simple idea that a product must remain the same way it came from the box.

    link to this | view in thread ]

  35. icon
    PaulT (profile), 14 Feb 2009 @ 2:29am

    Re: Re:

    Erm, bullshit.

    The device is still excellent, even if you have to use the locked version. But, additional applications really do unlock some fantastic features.

    As an example: last.fm used to have a great feature available for "scrobbling" tracks you listen to on an iPod. This is currently not possible on a standard iPod Touch or iPhone because of some overbearing security features.However, it is possible again on a jailbroken iPhone. This app makes the device a lot more useful. It's not a deal breaker if this feature was not available, but my Touch is better for having jailbroken and installed this app.

    I'm not doing anything illegal by jailbreaking the device, nor am I using pirated software. I simply want a useful application that Apple makes impossible for me to obtain through standard channels. In order to obtain this, I perform a modification to my legally owned hardware. I fail to see the problem with this.

    As for the car reference - you have the right to modify your car in any way you wish. You will lose the warranty on the car and may lose the right to drive on public roads if you make dangerous modifications. But you should still have the right to do so without interference from the original manufacturer.

    link to this | view in thread ]

  36. identicon
    SteveO, 14 Feb 2009 @ 12:26pm

    @ SEan

    Apple knows this, Jobs himself grew up in this very culture of tinkering. The trick now is not to get consumers to buy your gadget, it's how to get them to keep on paying for it. THAT is Apple's problem with jailbreaking of phones and iPods. It simply means that they don't get to charge you for software updates, or apps and they want the Government to protect that revenue stream. Jobs obviously forgets where he comes from because he should have known better than to think that this business model would fly unopposed in this day and age. It's a battle they're just not going to win. You can not go to war with hackers and expect to come out on top. Not gonna happen. Next they'll be fighting for the right to disable devices that don't conform.

    link to this | view in thread ]

  37. identicon
    Rockyc, 15 Feb 2009 @ 9:19am

    Trial balloon

    You buy the phone, you own the phone. Does Panasonic have a right to tell me what I can or cannot watch on my TV? Or DVD player? Of course not. I buy an appliance, I own the appliance. Apple knows that. If they want to change that rule of law -to claim they own it after the fact- then they are liable for everything that happens on that device, be it legal or not.

    link to this | view in thread ]

  38. identicon
    Anonymous Coward, 15 Feb 2009 @ 11:53am

    Re: Trial balloon

    That would be funny if Sears were to start telling people they could not wash clothes from other stores in the Sears branded washer/dryer.

    link to this | view in thread ]

  39. identicon
    yeah right, 16 Feb 2009 @ 8:43pm

    what a bunch of crybabies

    The entitlement mindset is at full tilt. If the market were ruled by the attitudes expressed in this thread, we would still be using dos and black and white screens. You love your little shiny toys but want to vilify the creators. Yes it is quite simple. If you don't like the terms, don't buy the item. Like it or not, you are not the only one with "rights." The big bad corporations have rights too.

    Corporations have a fiduciary responsibility to their shareholders to care most about the bottom line. Whatever idiot said that was a bad thing for Apple to do should really go move to a socialist commune. And the jackass with the cancer comment, scum.

    link to this | view in thread ]

  40. identicon
    Chris Miner, 17 Feb 2009 @ 4:26am

    Re: Goodbye subsidized phones

    Locking a phone to a carrier is *illegal* in many countries.

    link to this | view in thread ]

  41. identicon
    shoubidou, 17 Feb 2009 @ 5:29am

    Re: Why do they care?

    It's not as much about jailbreaking as it is about unlocking.
    If you buy a subsidized phone from one carrier, you using this same carrier is factured into the price. That's why unlocked phones are more expensive. Unlocking a subsidized phone is thus stealing.

    link to this | view in thread ]

  42. identicon
    shoubidou, 17 Feb 2009 @ 5:31am

    Re: Re: Re: Re: Re:

    Actually not only fanboys. Unlocked phones are always really expensive. Even a rather basic RAZR would cost more than $250 without any subsidizing.

    link to this | view in thread ]

  43. identicon
    yeah right, 17 Feb 2009 @ 5:46am

    Re: Re: Goodbye subsidized phones

    And? This is an American case. I don't care what Mama EU does such as the idiotic idea that Microsoft should be prevented from including IE on their OS. Stupid socialist economic policies.

    link to this | view in thread ]

  44. identicon
    yeah right, 17 Feb 2009 @ 5:51am

    Re: Reality Check time

    I don't know what reality you live in. This isn't about "replacing" the iPhone OS but modifying. How anyone cannot see how that is a problem is not living in reality. The question is whether the modified elements fall within certain limited exceptions in the copyright act.

    All of these discussions turn into fits of emotion rather than discussion of what the actual law is. If you want to rail against the law, fine, but you can't fault a company for pursuing their legal rights. Who started this fight? It wasn't Apple. They were happy letting people fly under the radar until someone ELSE decided they were going to push the envelope and agenda.

    Oh wait, that isn't as sexy as screaming Apple sucks! God smote Jobs with cancer!

    link to this | view in thread ]

  45. identicon
    Lance Raphael, 28 Jul 2009 @ 7:06am

    jailbreaking

    WHILE THIS IS NOT LEGAL ADVICE AND NO ONE SHOULD RELY UPON IT - THERE I GOT THAT OUT OF THE WAY -- I am looking at the jailbreak situation and believe that there is another angle to the problem of Apple stopping it.

    I do consumer rights class actions cases (google my name to see some of the cases I have brought, e.g. the original Blockbuster Late Fee case, the original American Family Publisher Case, the U.S. Robotics 56k modem case, the Sony 1080p case, etc.) and I believe the problem is not addressed by copyright infringement but by good old fashion consumer unfair trade practices.

    I believe that Apple maybe engaging in unfair competition by tying software designed by it to its products.

    Basically by restricting the ability for 3rd parties to design and develop software for their devices they are crushing competition and damaging consumers.

    There may be a claim under § 5 of the Federal Trade Commission Act, 15 U.S.C.S. § 45 , § 3 of the Clayton Act, 15 U.S.C.S. § 13a, § 1 of the Sherman Act, 15 U.S.C.S. § 1 as well as State law.

    See for example the case of Jefferson Parish, 466 U.S., at 12, 104 S. Ct. 1551, 80 L. Ed. 2d 2, "[o]ur cases have concluded that the essential characteristic of an invalid tying arrangement lies in the seller's exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms."

    A tying arrangement is defined "as an agreement by a party to sell one product but only on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that product from any other supplier." Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 5-6, 2 L. Ed. 2d 545, 78 S. Ct. 514 (1958); Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451, 461-62, 119 L. Ed. 2d 265, 112 S. Ct. 2072 (1992).

    Tying arrangements have been found to be "unreasonable in and of themselves whenever a party has sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product and a 'not insubstantial' amount of interstate commerce is affected." Northern Pac. Ry., 356 U.S. at 6.

    A tying claim under the Sherman Act requires that the plaintiff prove that a seller had substantial economic power in the tying product's market, and an anticompetitive effect in the tied-product market. Highland Capital, 350 F.3d at 565 (citations omitted), Eastman Kodak, 504 U.S. at 462 (arrangement constitutes impermissible tie under § 1 of Sherman Act "if the seller has 'appreciable economic power' in the tying product market and if the arrangement affects a substantial volume of commerce in the tied market.").

    The Supreme Court has "condemned tying arrangements when the seller has some special ability -- usually called "market power" -- to force a purchaser to do something that he would not do in a competitive market. . . . When 'forcing' occurs, our cases have found the tying arrangement to be unlawful." Jefferson Parish Hospital v. Hyde, 466 U.S. 2, 13-14, 80 L. Ed. 2d 2, 104 S. Ct. 1551 (1984).

    "From the standpoint of the consumer -- whose interests the statute was especially intended to serve -- the freedom to select the best bargain in the second market is impaired by his need to purchase the tying product, and perhaps by an inability to evaluate the true cost of either product when they are available only as a package." Id. at 15.


    The Sixth Circuit has adopted the following three-step analysis for determining whether a tying arrangement is likely to cause such an anticompetitive effect: "(1) the seller must have power in the tying product market; (2) there must be a substantial threat that the tying seller will acquire market power in the tied-product market; and (3) there must be a coherent economic basis for treating the tying and tied products as distinct." Hand v. Central Transp., Inc., 779 F.2d 8, 11 (6th Cir. 1985).

    Under traditional per se analysis, restraints of trade were condemned without any inquiry into the market power possessed by the defendant. However, under current per se analysis, the antitrust plaintiff must show the seller possesses substantial market power in the tying product market and that the arrangement affects a substantial volume of commerce in the tied market. Kodak, 504 U.S. at 462, 478-79. The two theories differ in only one respect - the per se analysis dispenses with proof of anticompetitive effects. PSI Repair Services, Inc. v. Honeywell, Inc., 104 F.3d 811, 815 n.2 (6th cir. 1997) (citing 10 Phillip E. Areeda et al., Antitrust Law P1760e, at 372 (1996)).

    link to this | view in thread ]

  46. identicon
    Chrissy, 30 Jul 2009 @ 9:48am

    Class Action Suit Against Apple and AT&T... maybe

    People knew that the iPhone 2G or iPhone EDGE were bought in full price NOT the subsidized price but still have to be tied up with AT&T. However, after upgrading or terminating contract, NOR Apple or AT&T won't provide any subsidy unlock for this phones. AT&T and other manufacturers provide such code to any type of phone except iPhone. WHY??? Please don't tell me to protect owner from fraud or stolen...etc...etc...

    link to this | view in thread ]

  47. identicon
    Free MLM Training, 14 Feb 2010 @ 3:03am

    re:

    Once I buy it, it's fscking MINE and I will do WHATEVER I PLEASE with it. If you don't like it, you will take it back only from my cold dead hands.

    LinkedIn Marketing
    Free MLM Training

    link to this | view in thread ]


Follow Techdirt
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.