Apple: Psystar's antitrust claims 'deeply flawed'

IDG News Service — Thu, 02 Oct 2008 11:37:16 -0700

Apple said that Psystar's argument that the Cupertino, Calif., computer maker had illegally tied Mac OS X with its own hardware was "deeply flawed" in a motion filed earlier this week. And the company wants a judge to dismiss Psystar's antitrust counterclaims.

Apple filed its motion in response to an August countersuit from Psystar, a Doral, Fla.-based clone maker that began selling computers running Apple's OS X operating system earlier this year. In that countersuit filed in August, Psystar argued that Apple enjoys "monopoly power" by linking its hardware and the Mac OS and claimed that Apple violated antitrust laws when it blocked users from installing OS X on computers not built by Apple.

But in its response filed with the U.S. District Court's Northern District of California, lawyers for Apple called Psystar's claims an "attempt to direct attention from its infringing conduct." Further, Apple's lawyers contend that Psystar's own filings undermine the argument that Apple enjoys an unlawful monopoly.

"Psystar's very business model is premised on the fact that Apple's computers compete directly with personal computers using different operating systems," reads Apple's motion, noting that Psystar also sells computers with Windows and Linux operating systems. "Since customers are choosing between these computer systems, the systems necessarily compete with one another."

Apple's 23-page filing attacks Psystar's antitrust arguments on several fronts. First, Apple's attorneys argue that Psystar cannot claim that there is a Mac OS markets since courts have often rejected the idea of single-brand markets. To back this claim, Apple's lawyers cite several cases where courts have ruled that "reasonably interchangeable products that serve the same use are in the same market."

Apple also attacks the claim that the Mac doesn't face competition, noting that Psystar gives its customers the option of opting for Windows or Linux as the OS for its Open Computer offering. Apple's filing also notes the "Get a Mac" ads--cited by Psystar in its countersuit--"specifically compare the features and functions of a Mac with a competing PC running the Windows operating system." (Apple included scripts for some of its Mac-vs.-PC ads as exhibits with its filing.)

Finally, Apple contends that antitrust laws can't be used to force it to license its OS to competitors. "One of the bedrock principles of antitrust law is that a manufacturer's unilateral decision concerning how to distribute its product and with whom it will deal cannot violate the Sherman Act," the filing reads.

Apple's motion to dismiss Psystar's suit is the latest development in a tussle that began this spring when Psystar announced it would sell a computer running OS X 10.5. But Psystar sold its Open Computer in an apparent violation of the end-user license agreement for OS X, which does not allow users to "install, use or run the Apple Software on any non-Apple-labeled computer, or to enable others to do so."

Apple took action in July, filing a suit against Psystar that alleged that the company had violated Apple copyrights and software licensing agreements. The stakes are high for Psystar: In its original suit, Apple demanded that Psystar recall every Mac clone sold--a move that could effectively put Psystar out of business.

Apple's motion to dismiss Psystar's antitrust allegations go before a judge next month.

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Apple: Psystar's antitrust claims 'deeply flawed'