| HN Mirror

Thanks for bringing up this good point. Let me explain. I think a government agency should not intervene if there is no law violation. I think this case is very clear - Apple is neither physically compelling nor defrauding anyone. It is offering terms of contract - contract between firms engaging in voluntary trade - and its counterparties are free to accept these terms or to walk away. However, if the FTC is not sure about this and needs to investigate to ascertain legality, I would say that the law they would be referring to is not a very objective one. I think that an essential characteristic of a good law is that its definition allows a person to understand, before he/she takes an action, whether that action is forbidden or not, and what the exact consequences would be if the action is actually forbidden. Clearly, Apple's management is sophisticated enough to understand an objective law.

About the role of the FTC: My understanding is that the FTC, together with the Antitrust Division of the DOJ, tries to ensure that companies comply with antitrust laws. Even though this is a different discussion, based on my knowledge of this field, I think that antitrust laws, generally, lack in objectivity. I disagree with many of them. This, however, does not mean that a company should break them. I would certainly not agree with such an action. A serious problem for companies is, however, that even with their hordes of sophisticated lawyers, it is very difficult for them to determine what constitutes a violation. As proof, consider the lengthy battles Microsoft has had with the European Commission. After years of fines and appeals, neither side fully understands the problem and neither side can define the actions that would guarantee compliance with the law in the future.