Watch CBSN Live

When Giants Grumble about Unfair Competition

Women suffragists with a changeWe must be hitting a change in psychological seasons, because there's an ironic air wafting down from the high tech upper echelon. On Capitol Hill, Microsoft general counsel Brad Smith told Congress that the Yahoo-Google deal would be anticompetitive -- setting a floor on advertising sales and-- gasp-- holding a 90 percent market share:

"If search is the gateway to the Internet, and most believe that it is, this deal will put Google in a position to own that gateway and the information that flows through it," Smith said. "Never before in the history of advertising has one company been in the position to control prices on up to 90% of advertising in a single medium. Not in television, not in radio, not in publishing. It should not happen on the Internet."
Now, if they only had control of 90 percent of desktops, that would be a completely different thing. Why, anyone could accept that.

In the same hearing, Yahoo and Google had a slightly different view:

Yahoo's general counsel, Michael Callahan, and Google's chief legal officer, David Drummond, both testified that their companies' partnership would help maintain a competitive market. Callahan argued that the cash from the deal would be reinvested, making Yahoo a stronger company. "With all due respect to Google," he said, "we have every expectation of fighting them and winning." He also noted that deals of this nature weren't unusual in the search business. Prior to 2004, Yahoo had outsourced its search to Google entirely and only recently developed its own algorithm.
In other words, the deal is good for competition because it lets the two dominant companies in search advertising out compete anyone else.

Elsewhere in the country, poor embattled Apple filed suit against that titan of computer manufacturing, Psystar, for "copyright infringement, inducement of copyright infringement, trademark infringement," and probably unlicensed cool. The big problem for Psystar is that it sold upgrade copies of the Mac OS along with its computers, rather than doing the obvious: selling the blasted machine and pointing out that copies of the OS are available at Apple's own stores.

John Ferrell, chairman of the intellectual property practice at Carr & Ferrell, also wondered what legal theory Psystar will used to defend their cloning of the Mac."Using copies of Apple's operating system to build Apple look-alikes was thought to have been clearly settled in the 1983 landmark copyright decision that put the last of the significant Apple clone makers, Franklin Computer, out of the Apple business," he said in an e-mail interview. "Apple's Macintosh products are protected by a wide range of intellectual property assets including copyrights, patents, and trademarks. It's no (coincidence) that there have been no successful Macintosh 'me-too' manufacturers in the past quarter of a century."
An interesting point, but is the world a lot different from 1983 â€" technically, if not legally? After all, people have found that choosing the right PC hardware, they can build machines that run OS X. Maybe in 1983 you'd have to duplicate Apple's own specific hardware design, but that's no longer the case. If someone built a machine and noted that it would run OS X, could Apple legitimately argue? Or might that fall into the anti-competitive, anti-trust arena? Maybe Microsoft could take up the company's cause.

Women suffragists image via Wikimedia Commons, public domain, photo edits by Erik Sherman

View CBS News In
CBS News App Open
Chrome Safari Continue