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Apple should be able to charge whatever it wants for its products. Consumers will decide what they are willing or not willing to pay. Current ideas on what constitutes illegal monopolistic behavior could use a dose of common sense and some remedial lessons in Friedmanistic economics. It's disheartening to see the people and organizations who epitomize failure claiming the right to write the rules by which businesses must operate.

Par for the course.

That would be blatantly illegal. That would be called monopolistic abuse, thus rendering Apple an illegal monopoly ( not to be confused with a simple monopoly as they are already - through a form of trickery ).

--The loon "

What constitutes a monopoly is an interesting and debatable (and in some cases it's a mass-debate ) topic. Many people claim that Apple has a monopoly with the iPod and iTunes simply because of market share, and relate it to Microsoft's position with Windows. But what's the difference in these cases.

Very simply put, content. Most of the content that is or can be used on an iPod can easily be transferred to competing devices of the same ilk. Music I purchase from ITMS even can be easily burned to a CD and then taken to whatever other device I please, be it a Zune, my car's CD player or my home entertainment system. I can even re-rip it into MP3 and put it on any el cheapo MP3 player I please. Yes it requires an intermediate step, but it can be done very easily by a layperson. Sure there are DRM movies but there are also numerous readily available and extremely easy to use tools out there to convert them.

Now lets think about the content for Windows - software. Can a layperson with little to no computer knowledge take that to another operating system and use it? At this point people will start screaming "what about WINE?" Well, what about WINE. What percentage of Windows software can be run under wine without modification, and be set up by a layperson who has little to no knowledge of operating systems?

So the difference is that once a person is using Windows software they are locked into that unless they change their whole shooting match. And yes the same applies for other operating systems, but Windows just happens to have a massive market share - the majority of the world in fact - and are therefore in the monopolistic position of having all those users by the balls. On the contrary if I wanted to change from an iPod to a Zune it might take me a few hours but just about all my content would still be usable.

So while Apple certainly have a monopolistic market share with the iPod, there is absolutely nothing stopping anyone from moving to another media player while retaining access to the content they've additionally purchased. If you're on Windows though and want to change you will also lose access to your software, and possibly even some peripherals, which is a much larger investment than Windows itself.

Let me get this straight. You mean transcoding from original to lossy AAC to lossy burned CD to lossy MP3 is acceptable? Sorry, but I'll stick with well-supported non-DRMed audio file formats, or better yet, the original copy ripped in FLAC or WavPack (ie. lossless formats which *can* safely be compressed by a lossy encoder such as MP3).

AAC already tosses out unthinkable amounts of audio data, which you will NEVER get back from an iTunes Store AAC audio; converting back to CD audio/wav and then back to MP3 (or any other format) is something that should NEVER be done if you value the quality of your music. More data (data=QUALITY) is lost for every generation of "converted" audio files. And you're using this poor practice to *defend* Apple and their DRM-infested store?

Wow... seriously, you've got a few things to learn. HydrogenAudio is a good place to start. ALWAYS use an audio encoder on the original, full-quality source material (read: the actual CD). Restrain from converting already-lossy (ie. MP3 and AAC) files to another format. The ONLY way to listen to the music you bought in 100% quality is on the devices that Apple says you can. Why? The DRM says so. Simple as that.

Edited 2009-11-06 23:15 UTC

Loon, have you gone off your meds or been smoking too much pot?

Carefully consider what the OP stated: dropping margins to minimum. In no way, shape, or form, is that illegal: even if Microsoft did it, being the OS monopoly for PC hardware (which Apple sells a computer that works very well running Windows, too) wouldn't run afoul of any laws whatsoever. Companies that sell stuff at break-even are.... ultra-competitive. Companies that sell their stuff at a loss to be made up by other products they sell? Why, we all use them: grocery stores! Granted, no grocery store I'm aware of has a true monopoly, but the point still stands: you can't have capitalism and say "It isn't fair for anyone to cut their margins to minimum!" regardless of which entity cuts them to the minimum: if they don't sell something for less than it costs, quite simply, it isn't dumping, and therefore, is not at all illegal anywhere in the world (can you seriously post links to laws that prohibit companies from selling something at low profit, but not at a loss? I'm rather confident you cannot, because it defies all logic.... then again, there's your username ) and is how companies tend to grab market share.

Furthermore, for PC hardware and operating systems, Apple isn't remotely a monopoly: while they are the only ones that are authorized to sell OSX, not only is the OS (the kernel and a lot of it) OSS that anyone can grab for free (minus things like Aqua, a lot of the differentiating product that's uniquely Apple's) but the hardware can be used to run any other OS that runs on PCs, and Apple isn't at all stopping users from doing exactly that: in fact, perhaps you're unaware of "Boot Camp" provided with OSX, which includes Windows drivers to make installing Windows (at least Vista, soon, if not already, Windows 7) easy, and makes it much easier to boot anything else, even if it doesn't natively support EFI booting.

Apple could cut their margins on their PC hardware and software combination to return $1 above the cost to make, advertise, and support what they sell, and they'd still make a small amount of money per year: they've sold many millions of Macs this year as it is. However, that's not exactly something shareholders would want to see Sure, they'd gain market share, but at what price? After they've lowered their prices that much, they'd never be able to recover average selling prices, and that'd more likely doom them than not in the computer field. Of course, there's always the portable computing device/phone business

It is, and has been for many many years, illegal for a company with a monopoly to price products aggressively with the sole intent to price another competitor into oblivion.

Generally speaking, the monopoly-holding company would need to drop prices below costs for absolute violation of anti-trust law. However, any flexing of monopolistic powers aimed at absolutely destroying the competition is generally illegal.

Be that aggressive contract terms, hiding of certain interoperability information, or what have you.

The rules change once a monopoly is established. They change once again once a court rules that an illegal monopoly exists.

Apple [[c][w]]ould be considered a monopoly based merely on the fact that they have a full monopoly on MacOS X and have been very aggressive in thwarting competition. Thusly, we fall back to sales at retail and Apple's responsibilities in that arena, which is another topic.

Take the case of Microsoft, for years they used simple trickery and targeted price cuts ( bulk-deals, contracts, OEMs ) to build and maintain market superiority. All well and good, except that on more than one occasion those actions were ramped up to target competitors, thereby placing Microsoft into the position of an illegal monopolist.

Apple is doing exactly the same, on a different scale. Sure, they can drop their prices to even make a loss, but if they do so specifically to destroy a competitor, they are violating anti-trust law.

More often than not these cases are handled in the back room under negotiated mediation sessions ( of which I have been a party - albeit not in regards to anti-trust ), so very little case law even exists.

Indeed, Microsoft is almost the only modern example of this nature. And Bush's terrible Attorneys General destroyed millions of dollars in efforts to produce results, leaving even more questions officially unanswered.

In the end, however, blatantly illegal or not, it all depends on one person wearing a black robe to agree that Apple's market position constitutes a monopoly before much of anything can be done in terms of judicial action. Until then, it would merely be fodder in the hands of the enemy and their lawyers.

--The loon