Former Secretary of Labor Robert Reich steps up to defend Apple

Thu, May 6, 2010

Legal, News

Earlier this week, a number of sources reported that the FTC was attempting to figure out which regulatory body would be investigating Apple for alleged anti-competitive behavior stemming from their decision to disallow apps developed with cross-platform development tools – such as the Flash to iPhone compiler in the just released CS 5 suite of software from Adobe.

Again, this initial inquiry is merely meant to determine if a full-fledged investigation is necessary, and not surprisingly, it appears that a complaint from Adobe to the FTC was the impetus for this “anti-trust investigation.”

Now you might be wondering – “What the hell does the FTC care about what Apple does? It’s not like the iPhone has a dominant marketshare here in the US.”

And if, in fact, that thought has crossed your mind, then you’re in good company.

Earlier this week, Robert Reich, a former Secretary of Labor under President Bill Clinton and now a Professor of Public Policy at UC Berkely lashed out at the FTC for focusing on Apple when the real problem, Reich argues, is the power being accumulated by big banks like JP Morgan Chase.

“Our future well being depends more on people like Steve Jobs,” Reich astutely points out, “who invent real products that can improve our lives, than it does on people like Jamie Dimon who invent financial products that do little other than threaten our economy.”

Apple’s requirement that developers use Apple tools to create apps can only be deemed anti-competitive in an environment where the iPhone happens to be the dominant platform. That, however, is hardly the case.

If consumers disagree they can buy platforms elsewhere. Apple was the world’s #3 smartphone supplier in 2009, with 16.2 percent of worldwide market share. RIM was #2, with 18.8 percent. Google isn’t exactly a wallflower. These and other firms are innovating like mad, as are tens of thousands of independent developers. If Apple’s decision reduces the number of future apps that can run on its products, Apple will suffer and presumably change its mind.

On the flip side, Reich points out that the 4 largest US financial institutions are so big that if even one fails, the fallout on the remaining banks, and the economy in general, would be disasterous. Why the, Reich wonders, is the FTC wasting its time with the Apple iPhone instead of paying attention to the potentially dire effects of all these large banks consolidating power and influence?

Well as it turns out, the FTC’s mission to seek out and correct “unfair methods of competition” explicitly excludes banks. Genius!

In any event, there you have it. I suppose we have a reason, albeit outdated, why the FTC isn’t looking into many of the shady practices that abound in some of our nations largest financial institutions. But that still doesn’t explain why they need to waste their time on Apple. Again, with a non-dominant marketshare, Apple should be able to do whatever the hell they damn please, for better or worse.


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2 Comments For This Post

  1. Scott B. Says:

    I really don’t believe you can get more direct and honest then that.

  2. Jason Says:

    This reminds me of the nerdy, really annoying kid in school who couldn’t do very much right and would never shut up. One day he feels left out and makes a move on another kid but gets punked so he runs crying to the teacher that the other kid isn’t playing nice.

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