The DoJ vs. Apple: A Lose-Lose Situation

In this space I have made no bones about my disdain for Apple (AAPL). I never trusted the company as a true partner to the channel, fought for years against becoming one of the sheep and converting to an iPhone, and I still get completely irritated every time I have to make a service appointment in the Apple Store with one of their snotty “geniuses.”

However, all that said, we have choices as consumers and business owners and don’t have to buy or represent any company’s products if we don’t want to. As a company Apple has the right to upgrade its products whenever it sees fit, charge whatever it feels the market can support and create service plans that suck you in. But again, it’s our choice. You don’t like it? Buy something else. It’s like watching TV. If you don’t like the programming, change the channel.

However, about the only entity I trust less than Apple is the U.S. government. Now, I’m no anarchist and still believe we live in the greatest country on the face of the earth, but I personally believe that the less government in our lives the better. We are all adults here and can agree to disagree, but that’s just my humble opinion.

So when I recently read reports that the U.S. Department of Justice is going after Apple, striving for supervision over the Apple App Store and iTunes, I am terribly vexed. It’s like a New York Giants fan watching a football game between the Cowboys and Redskins and rooting for them both to lose. It’s an internal conflict.

From what I gather, recently a New York Federal District Judge ruled that Apple violates U.S. Anti-Trust Laws because it receives sizable commissions on any e-books sold through its online store. The DOJ wants to eliminate that and allow Amazon (AMZN) to sell its e-books through the App Store but without the commission. Published reports state that Apple gets as much as 10 percent of its revenue through its App store, so this would obviously hit the company hard.

So what’s the federal government’s beef with all this? It is Apple’s App Store. That is capitalism. Only bad things will happen if the DOJ pushes this case hard. It is bad for Apple, bad for the industry, and bad for the channel. Oh, and it’s bad for taxpayers. It’s a lose-lose situation. Distractions such as these hurt development and consumer and business confidence.

This case—and others like it—is likely to drag out for many years. Remember IBM’s fight with the DOJ? After more than 10 years, millions of dollars and time wasted and shareholder value diminished the case against IBM ended up being inconclusive. What a colossal waste.

The government claims it is fighting monopolistic behavior and always looking to create fair market pricing. I don’t buy it. Consumers already have choices and it looks as though the government is going after a successful American success story more for headlines than for actual results.

I hate to say it, but I’m actually rooting for Apple. Who are you rooting for?

Knock ’em alive!