California Attorney General Rob Bonta’s new antitrust attack on Apple resembles in its folly a similar antitrust case California joined 25 years ago. Young readers will shake their heads this even happened.
It started in 1990 when the Federal Trade Commission began investigating Microsoft for alleged antitrust violations involving its dominant Windows operating system. In 1995, the new Windows 95 “bundled” – included free – the Internet Explorer web browser.
In 1997, President Clinton’s Justice Department sued and sought to break up Microsoft into separate OS and applications companies.
In 1999, newly elected California Attorney General Bill Lockyer led 18 other states in their own lawsuit against Microsoft. Microsoft was located in Washington State, while several California companies, especially Oracle, pushed the states’ lawsuit. Oracle reportedly gave $50,000 to Lockyer’s political campaign, later returned.
At the Orange County Register our editorial board met with Lockyer. He was an intelligent and charming politician. But he never adequately could describe what “bundling” was, let alone why it ought to be banned.
Microsoft Chairman Bill Gates, a Democrat, had been lightly involved in politics. But the Wall Street Journal reported in 1999 the company tripled its political spending to $1 million in 1998, 63% to Republicans. And doubled lobbying spending to $1.28 million.
As I wrote in the Register at the time in a dozen editorials against the antitrust lawsuit, the industry moves far too fast for a group of political lawyers to figure out.
In 2001 Republican President Bush took office and soon his Justice Department settled with some minor restrictions on Microsoft. Lockyer objected, then came to his own separate settlement.
Meanwhile, in 1997 Steve Jobs came back to Apple and reignited it. In 1998 Google started and soon became the dominant search engine, a feature far more important than the OS or broser.
In 2007, Jobs introduced the iPhone, and apps dominated the industry with the new social media companies.
Back to Bonta. On March 20 he was one of 16 state attorneys general joining President Biden’s Justice Department in suing Apple. His office summarized, “The lawsuit alleges Apple deliberately made it more difficult for third-party apps and products to operate with the iPhone, resulting in higher prices for consumers and harm to competition in the smartphone industry.”
Boy does that sound familiar! Only this time a California attorney general is attacking not a dominant company from another state, but California’s premier company. Bonta himself said, “Apple’s anticompetitive conduct intentionally leaves consumers bearing the cost of sky-high smartphone prices at a time when smartphones are now essential to so much of our day-to-day lives.”
Nonsense. In recent years I’ve switched from a Google Android/Microsoft phone-laptop combo to a MacBook Air and iPhone because they’re cheaper and better for me. I take my Mac to a coffee shop and tether it to my iPhone. I’m writing this at the Lost Bean in Irvine.
“California’s economy thrives on entrepreneurship, serving as a driving force behind its innovation and growth,” Bonta said. Which is why he ought not interfere.
Related Articles
Ronna McDaniel’s flameout at NBC and the death of media gatekeeping
Will California taxpayers foot the bill for state’s big deficits?
Biden administration proposal threatens innovative research at universities across the country
Robert F. Kennedy Jr. isn’t a libertarian. He has no business seeking the Libertarian Party nomination.
More housing is the solution for homeowners and renters alike
Bonta is ignoring the future right in front of us. First, there’s AI. Every big tech company is scrambling for it, as are numerous startups. It’s a wild, free market – if the government leaves it alone.
Second is Huawei, the giant Chinese company. The Biden administration blocked it from getting advanced U.S. chips for its smartphones. So it built its own. Fortune reported in January its Harmony OS “may soon overtake Apple’s iOS in China.”
Unlike in 1989, when Silicon Valley ruled the tech world, competitors in China, Japan, India and other lands are eager to jump ahead of us in AI – and are laughing as U.S. politicians torpedo our best companies. The California and U.S. justice departments have no sway with the more than 7 billion people outside America.
This also ought to be a cautionary tale for left-leaning U.S. tech companies and executives. It’s true Republicans like protectionist Donald Trump also attack free markets. But blindly supporting anti-market Democrats doesn’t make sense either. The Libertarian Party still is out there.
John Seiler is on the SCNG Editorial Board and blogs at johnseiler.substack.com
