By Oh Young-jin
The U.S. Supreme Court ordered the breakup of Standard Oil’s monopoly in the early 20th century in order to provide a level playing field for fair competition.
The John Rockefeller firm is long gone but his spirit lives on in Exxon Mobil, Chevron and Amoco, the big oil firms.
In the 1980s, the highest court in the U.S. ruled that AT&T should be dissolved to allow for competition. In 2005, SBC Communications, one of several offshoots of the AT&T dissolution, purchased its mother company to become AT&T Inc.
When you find phone rates cheap in the U.S., thank the court and observe a moment of silence in appreciation because it powered a global promotion of competition.
In 1998, the U.S. Justice Department went after Microsoft for its practice of bundling its Windows operating system with Internet Explorer. It stopped short and the parties reached an out-of-court settlement. It’s tempting to imagine what would have happened if Microsoft had suffered the same fate as Standard Oil or AT&T Corp. Perhaps, Google would have emerged sooner; iPhones and iPads as well as Galaxy S and Tab might now be sold at lower prices.
Now, European courts face similar issues in ruling on Apple vs. Samsung cases. At stake is the future of competition vs. monopoly.
A court in Dusseldorf, Germany, will have a hearing on Aug. 25 about an injunction granted but scaled back later by the same court in a case filed by Apple, arguing that Samsung stole designs for its Galaxy products from Apple.
Apple has filed multiple lawsuits against Samsung and other firms virtually all over the world, so a decision by the Dusseldorf court will likely affect future rulings.
Apple’s strategy is evident: Litigate until the other party surrenders.
Simply put, Apple runs the risk of becoming frivolous in its scattershot litigation campaign, but the most serious implication is that it could strengthen its dominance at the cost of competition. It is the court’s duty to determine what is in the best of interest of consumers, overcoming the temptation to see the case as a clash of competing companies. All these are said within the range of not compromising the value of innovation.
For the court, it is important to get to the bottom of allegations that Apple altered evidence ― manipulating images of Tab tablets to make them look like the iPads and photoshopping a Galaxy S handset to shrink size closer to that of iPhone.
If an Apple representative said that the real products in question were also submitted to the court in an attempt to exonerate itself from serious allegations of altered evidence, it would only show its contempt for the court.
Secondly, the concept of tablet computers has long preceded the appearance of iPads. Apple’s claim reaches the point where everything rectangular and black or white in color belongs to it.
We know designs are transformative with a trendsetter having an advantage in being ahead, not from blocking others from following, unless when the designs in question are unprecedented, unheard of and previously unseen.
In the Apple vs. Samsung case, Apple is by no means trying to hide or restrict its dominant status over Samsung because Samsung supplies Apple with chips and LCDs. It should also be a question that the court sees a merit in pursuing, although it is not included in the lawsuit.
As a matter of fact, Apple is making hefty investments in Sharp of Japan, Samsung’s competitor, which will likely result in Samsung getting a smaller contract from Apple.
A senior executive from a major non-Samsung affiliated firm said ruefully that Apple is “so fastidious that their people will go all over you, if anything is spoken about it without prior consent.”
Another executive from another firm spoke of Apple on the condition of anonymity because he feared strong backlash from the American corporation. “Apple tyrannizes but we have to endure it because we don’t want to pass up big Apple contracts.”
It is worth trying to see all the reasons behind Apple’s latest litigation campaign.
It may resemble a dying pharaoh’s attempt to finish a pyramid. Steve Jobs has had a liver transplant and is said to be in not such great health, which perhaps makes him even more determined to build a Third Reich of sorts that would last 1,000 years. We know that Hitler’s fascist regime lasted less than 20 years. When Jobs saw his fellow IT genius Bill Gates retire, leaving Microsoft languishing as an ordinary firm under Steve Ballmer, Jobs’ determination may have hardened more.
If indeed Jobs felt a sense of insecurity about his legacy, I wouldn’t blame him.
He is one of the very few true innovators and his short stint in Leeds University served to form his insight and interest in the beauty of fonts and opened his eyes for the combination of liberal arts and technology. See, even Jobs learned from others and we call that an act of imitation.
Also, Apple obviously feels threatened by Google ― which is marshalling a non-Apple alliance ― using its lawsuits against Samsung and other Android allies as battles to win the war against Google. This process may be competition but a victory by Apple will make for a one-man rule, going against the girth of competition. In contrast, Google’s victory would not be as anti-competitive as that of Apple because it promotes an open-source OS. One caveat is the uncertainty of what Google will do with its newly acquired Motorola Mobility.
Last but not least, Apple has every reason to see Samsung as a competitor that will grow bigger to become a greater threat. Look at any “it” item list (in this case, it also stands for information technology) and chances are that the new Galaxy handsets and Tab tablets would be included.
So the bottom line is that the European courts have to juggle two competing priorities ― competition and innovation. I am quite sure that they will strike the right balance but I believe, at this point in time, competition is more important than the rewarding of innovative minds, especially when those minds cut corners and can’t prove they are absolutely free from imitation.