Tags: Financial Markets | Supreme Court | antitrust | laws | cook | doj

Kavanaugh Takes Bite Out of Apple

stack of apple phones
(Mohamed Ahmed Soliman/Dreamstime)

Wednesday, 22 May 2019 03:14 PM Current | Bio | Archive

By undertaking heroic action to protect American consumers, U.S. Supreme Court Justice Brett Kavanaugh took a big, violent bite into Tim Cook’s Apple — spitting out the poisonous price-gouging seeds and setting the stage for a fairer and freer marketplace for the years to come.

Over the last two decades, it's become commonplace for big tech companies to use their operating software as a means of cutting off the availability of competing products and services.

The end result of such action has always resulted in robbing from Peter to pay Paul — allowing fat cat tech executives to swim in even larger pools of cash while costing the American people hefty sums of cash annually.

It was only a matter of time before Apple took a larger role in this predatory party, but nevertheless, that time has come.

A lawsuit filed by four Apple iPhone users claims Apple is drastically inflating the price of retail apps by using its market power to spin its profits wheel more than the free market would permit if left to its own devices.

Through forbidding the purchase of apps from anywhere other than the App Store, and then charging a hefty 30-percent commission charge on app developers, Apple has given creators no choice but to raise prices.

Since Apple forbids other competing platforms from offering apps, this leads to the American people paying more — an unacceptable use of power and market share on the part of Apple that must be stopped.

Enter Justice Kavanaugh, who recently wrote the majority opinion in Apple v. Pepper, which sided with consumers rather than the corporation.

"Ever since Congress overwhelmingly passed and President Benjamin Harrison signed the Sherman Act in 1890, 'protecting consumers from monopoly prices' has been 'the central concern of antitrust,'" Kavanaugh wrote. "The plaintiffs seek to hold retailers to account if the retailers engage in unlawful anticompetitive conduct that harms consumers who purchase from those retailers. That is why we have antitrust law."

Kavanaugh is right: protecting consumers and creators from predatory practices is the precise reason why the courts have antitrust law at their disposal, and they should not be afraid to use it.

According to Apple, however, its users’ lawsuit should have been tossed away because the company has developers, not iPhone customers, pay the fee, and proving that costs were passed on would be too complicated.

That’s the equivalent of arguing that conservatives should become content with minimum wage laws because the mandate falls on the backs of employers, not shoppers, and that since no one knows precisely how much consumers get hit with, the issue should be left alone.

It just doesn’t make any sense.

While Apple’s reasoning is laughable on its face, in reality, its argument is no different than any other the Supreme Court has seen over the last century.

Most every defendant accused of anti-competitive behavior tries to contend that using the antitrust laws on the books against them will impede on competition and the free marketplace, pretending as if their operating practices aren’t the key roadblock in the way of those two things.

For example, ASCAP and BMI, the two monopolists in the music industry, are currently playing the same free market rhetorical game as Apple while their antitrust agreements with the DOJ, known as consent decrees, remain under review by U.S. Atty. Gen. William Barr and the rest of his department.

ASCAP and BMI are the pit bosses of the music copyright industry. All businesses that want music played within their establishments must consult with them, as together manage 90-percent of the public performance rights in the industry. Like Apple, they used their market share to price-gouge, causing pain for the small business community and their consumers.

Although their antitrust remedies, which stipulate that they license everything in their catalogs through a single license at a reasonable price, have worked more than efficiently, as Barr’s DOJ undertakes its review of all the nation’s legacy antitrust decrees, ASCAP and BMI are now arguing that removing the consent decrees will magically unleash a free market and a more competitive marketplace.

"A free market would create a more productive, efficient and level playing field for everyone involved," ASCAP and BMI’s presidents wrote in a joint letter, "Competition is a good thing."

Hey, Tim Cook, sound familiar?

Whether it’s big tech or big music, predatory institutions will always claim innocence, trying to cast the antitrust action against them to influencers like Atty. Gen. Barr and Justice Kavanaugh as antithetical to free markets. For the sake of level playing fields everywhere, it’s critical that they don’t take the bait, as even just one mistake can open a Pandora’s Box of complications stemming from the precedent it creates.

Justice Kavanaugh certainly deserves applause for standing his ground in Apple v. Pepper.

In the midst of all the pressure from faux free market talking points, he did the right thing, and although upsetting some in corporate America, anyone with an iPhone will benefit from his decision. Now, everyone on the Supreme Court and within the Trump administration just needs to follow his lead.

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In the midst of all the pressure from faux free market talking points, Justice Kavanaugh did the right thing, and although upsetting some in corporate America, anyone with an iPhone will benefit from his decision.
antitrust, laws, cook, doj
Wednesday, 22 May 2019 03:14 PM
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