April 15th, 2008

Psystar: Apple's terms violate U.S. monopoly laws

Posted by Adrian Kingsley-Hughes @ 5:53 am

Categories: Apple

Tags: EULA, Apple Inc., Psystar, Monopoly Law, Apple Mac OS X, Operating Systems, Software, Apple Mac OS, Adrian Kingsley-Hughes

Psystar, a Miami-based OEM which is now offering OS X on generic PC hardware, claims that Apple’s restrictive licensing terms violates U.S. monopoly laws. Whoa, bold claim there. Better have some deep pockets if the company wants to take the fight to court.

In an interview with InformationWeek, a Psystar employee identifying himself only as Robert openly attacks Apple’s Mac OS X EULA.

But Psystar said Monday that the company believes Apple’s terms violate U.S. monopoly laws. “What if Microsoft said you could only install Windows on Dell computers?” said a Psystar employee.

The employee, who would only identify himself as Robert, said Apple grossly overcharges for the hardware on which its operating systems, including Leopard, come preinstalled. “They’re charging an 80% markup on hardware,” Robert said in a brief phone interview.

He also said Psystar believes Apple’s prohibition against third-party installations might not hold up in court: “What if Honda said that, after you buy their car, you could only drive it on the roads they said you could?”

There seems to be three issues here. One whether Apple is a monopoly. In the words of Homer Simpson, that’s for the courts to decide. The second issue here is whether Apple overcharges customers for products. Well, as long as people are willing to pay what Apple is asking, that’s not much of an issue. Finally, are EULAs legal or enforceable? The EULA part is interesting because the validity of the EULA has never been tested in court, and as much as I’d like to see that happen, I seriously doubt that Psystar has the cash to be able to get this as far as court. I don’t think we’re going to see the validity of the EULA get tested in court over this issue.

The concept of an “open” PC where users are free to install onto it whatever OS they want is a great idea, and to be honest if users buy an Psystar OpenMac system and install Leopard onto it themselves, I seriously doubt that even Apple would bother chasing up owners to tell them that their install of OS X violates the EULA. What’s far more likely to happen is that Apple takes the same approach as with the iPhone and release updates that would trash these installations. Not nice, but as we saw with unlocked iPhones, Apple is not above this kind of behavior. However, if Psystar continues to offer OS X, a cease and desist letter can’t be that far in the future.

As for the whole thing about EULAs violating monopoly laws stuff, I can’t see that being anything more than howling at the moon. If this really was the case then I would have expected one of the big OEMs (Dell, HP …) to have already decided to challenge Apple on this. We’ve not seen this happen so I’m not going to hold my breath over Psystar’s claims.

Thoughts?