FTC Pursues Rambus Appeal To Supreme Court

pheede writes "SCOTUSblog brings us news that the FTC has appealed the recent circuit court decision regarding Rambus's deceptive conduct on the JEDEC standards committee, where they conveniently avoided telling anyone that they owned patents on the resulting standards. The FTC, which is proceeding on its own without help from the Justice Department, notes the circuit court's 'sweeping rules that would immunize' deceptive conduct by would-be monopolists 'in most circumstances.'"

Comments

Subject goes here

[snowraver1]

Using deception to gain higher prices, the Court said, normally does not have the tendency to shut out rivals.

This quote near the end of the artice I find troubling. It almost sounds as though the court condones the use of deceptive practices.

It's true that companies use deceptive practices (the iPhone article earlier, cell phone companies in general) and those companies are certianly thriving, I think that the courts should be smacking companies that use blatent deception.

Magnuson-Moss

[Anonymous Coward]

The Commission noted that this was the fourth time it had appealed a case to the Supreme Court without the U.S. Solicitor General... The agency said it has had that authority since he Magnuson-Moss Warranty Act went into effect in July 1975.

I've heard of Magnuson-Moss mostly in the auto world, where it's known as the law that forcing manufacturers to cover warranty repairs on modified vehicles unless it can be shown that third party parts, modifications, or unintended usage contributed to the failure needing repair.

This is an interesting use of Magnuson-Moss which, as far as I can tell from the Wikipedia article, comes from the section stating "Likewise, service contracts must fully, clearly, and conspicuously disclose their terms and conditions in simple and readily understood language." What a great law.

Re:Magnuson-Moss

[lysergic.acid]

great law indeed. i'd never heard of Magnuson-Moss before, but i wish the conspicuous disclosure of terms and conditions provision were more generally applied to cover all business contracts and advertising. perhaps it'd mitigate "small print syndrome" and other deceptive business practices.

maybe then instead of pouring millions of dollars into marketing/advertising and other manipulative business practices, companies will instead have to put that money into R&D to develop competitive products/technologies and succeed based purely on their technical merits (instead of, say, lobbying/bribing/tricking standard-setting bodies to adopt your proprietary technology as an industry standard).

i mean, things like films, music, clothes, etc. are highly subjective, thus they inherently rely on promotional advertising/marketing to gain exposure, after which each work can be propelled on its own creative/aesthetic merits. however, technology should to be judged on its technical merits, not which company has the biggest marketing budget or the most lobbying power to buy their own industry standards.

Re:Really?

[Darkness404]

I don't think so. You made the claim, the burden of proof rests on you.

And I just gave three examples.

Natural Monopolies arise wherever a company can provide infrastructure to a captive audience. That has nothing to do with the government, unless the government is actively encouraging it or trying to stop it. Prove me wrong.

That would not be a natural monopoly. A natural monopoly would be if McDonalds was the only place that sold hamburgers not because they owned copyrights or patents to hamburgers but no one else wanted to sell hamburgers. What we have in your case is the "natural monopolies" that only one or two companies can do because they received government funding (or permission) either in the past or in the present. Which would be the ISPs who got the phone lines (the needed infrastructure) when the government was handing out money left and right to phone companies to give phone service to everywhere in the country.

The software patent system actively encourages monopolies to form in its current form. It allows any business currently to patent something that they will never use only to put a hold onto the market. It also encourages patent trolls from preventing innovation by suing successful manufacturers of software or hardware once they become successful because of it. Just look at the numerous /. stories of Nintendo, Sony and MS being sued because of patent trolling by companies that have not, nor will make game controllers, yet they sue Nintendo, Sony or MS (or settle out of court for high sums of money) and thus help them have a monopoly because a smaller company would either be sued out of existence, be forced to withdraw a successful product, or rework it and no doubt be attacked by another patent troll. If Nintendo, Sony or MS had as much capital as a successful start up business and each had their current-gen system I doubt that any would end up surviving.

Re:Really?

[ppanon]

Show me one [monopoly] that has not been [government-created](in the USA at least)

How quickly they forget (and I mean not just you but everybody else who couldn't come up with a reply). Standard Oil.

Because a power or water company isn't really natural, its allowed and encouraged by the government. To say that it is natural is to say that if there was a world devoid of any government that was free-market that there would only be one of it when the society was at the height of its power.

You don't seem to understand the concept of Natural_monopoly. That's understandable, there's been a lot of TV pundits and self-interested CEOs spouting plenty of nonsensical "economic theory" ever since Reagan.

"An industry is said to be a natural monopoly (also called technical monopoly) if only one firm is able to survive in the long run, even in the absence of legal regulations or "predatory" measures by the monopolist.[2] It is said that this is the result of high fixed costs of entering an industry which causes long run average costs to decline as output expands."

Laying pipe for water delivery and laying cable for electrification have high fixed costs. Go back to Roman and pre-Roman times and the state delivered it because no private enterprise was capable of assembling the capital necessary to build the infrastructure. Also look at Hydraulic empires. Hydraulic empires are basically natural monopolies on goods essential to life, and where the monopoly power is exploited to obtain political power (not the other way around). History is ripe with this stuff.

Another cause of natural monopolies is Network effects. In an industry where network effects are important, an early participant that can build a super-majority market share has a major marketing advantage over any competitors that they can also turn into a significant monetary advantage. This is particularly true in the telecommunications industry. If the telecom industry wasn't regulated, the major player (Bell currently) could simply refuse to exchange communications with smaller competitors (or charge hefty connection fees - above and beyond traffic-based charges - as happens in the IP internetworking business) because new customers would be more likely to need to talk to their large client base.

And I would argue that there would be surely more than one phone company and in large cities more than one power and water companies in the theoretical society above.

And you would be wrong. For the phone company, see the above network effects. For water companies, see the above links on hydraulic empires. Power? I think it depends on whether you were close to a good candidate site for hydroelectric power or a similar power generation method with high fixed and low variable costs.