As technology changes the way we operate in society and takes over the way we used to do things years ago, there are new legal challenges that must be made in order to regulate how businesses can use it.
A recent Thomson Reuters article reports on Manhattan anti-trust lawsuits that were recently filed, alleging technology and communications giant Apple conspired with five of the six major book publishers to fix prices for electronic books. And after one set of plaintiffs filed a lawsuit, four other class action lawsuits were filed — one in California and three in New York — making similar allegations.
Anti-trust law is essentially the area of law that governs competition and prevents monopolies from occurring. It’s interesting that Apple is on the other end of an anti-trust lawsuit as in 1998, the United States Department of Justice and 20 states filed an anti-trust action against Microsoft Corporation, alleging the company abused monopoly power on Intel-based computers dealing with operating system and web browser sales. The issue in that case was whether it could sell its Windows operating system with Internet Explorer software.
Today, it seems second nature for PC users to have Internet Explorer standard, but the lawsuit raised questions about whether that restricted the market for competing web browsers. After a trial and appeals, Microsoft settled with the government, agreeing to share its application programming interfaces with other companies and allow access to the company’s systems, records and source code for five years.
The allegations in the case against Apple are slightly different, however. Electronic books — those read on Apple’s iPad, Amazon’s Kindle and Barnes and Noble’s Nook, among others — are the paperless version of millions of books, available with a click. The lawsuits claim that Apple and the publishers struck a deal in January 2010, just before Apple’s iPad launched, to fix prices. The deal was to raise e-book prices after the publishers were frustrated with Amazon charging low prices in order to dominate the market.
This type of litigation protects businesses from unlawful competition. Not that competition is bad — competition is what makes any marketplace thrive, but doing so unlawfully can cripple a business. As any small business owner knows — or if this is an example, any corporation knows, protecting one’s product through litigation is a step many have to take.
New York business law is designed to protect the companies that are acting lawfully and punish those who have broken the laws designed to regulate healthy competition. If companies are caught conspiring together to fix prices, steal competitors’ ideas or otherwise control the market, they can suffer the consequences of hefty fines and, in the public realm, very bad public relations.
It is important that businesses consider how the law can benefit them in regulating and policing the industry. Anti-trust laws are here to help companies who are working honorably and who have had dishonest competitors working together to bump out other companies who are trying to get a share of the consumer dollar.
The Law Offices of Ira S. Newman provides intellectual property counsel in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or contact us through the website.
More Blog Entries:
Starbucks Corporation v. South Dakota Network LLC Shows New York Copyright Infringement Law in Action: July 20, 2011
Penguin Group v. American Buddha Shows the Need for Copyright Lawyers: June 21, 2011
As e-book antitrust suits proliferate, Hagens Berman cries foul, by Alison Frankel, Thomson Reuters