MacOS KenDensed: Apple’s Flashback & Ebook Conspiracy Battles

| MacOS KenDensed

The well rested Ken RayApple had a busy week dealing with the Flashback trojan, and the Department of Justice’s ebook price antitrust allegations. There’s also someone who thinks they have a prototype Mac worth almost $100,000. Mac OS Ken’s Ken Ray slices it all apart for you with surgical precision. Or maybe a Benihana chef.

Practicing Safe Flash
Sigh. I don’t know what to do with you. I go away for one week and, suddenly, over half a million Macs run off and join some sort of botnet?

Seriously, I was gone for one week.

CNET has word of the Flashback malware, believed to be running on more than 600-thousand machines worldwide for a few days.

While 600,000 sounds like a lot, it’s less than one-percent of the Macs sold in the past three years, which makes it sound like a little. And yet Mikko Hypponen of security-firm F-Secure says it’s the biggest concerted threat to Mac users so far. Which makes it sound like a lot again.

How does one get it? It looks like there are a couple of ways.

The Telegraph out of the UK says “The Trojan poses as an installer for Adobe’s Flash player, which is required by many websites. If a user’s Apple Safari browser is set to automatically open ‘safe’ files, such as those ending in PKG, unknowing users could find their existing security software deactivated and their machine used to report back to a central server that it has been infected.”

So don’t do that and don’t do that other thing.

While the threat is listed as “low,” The Telegraph says Mac users are warned not to open unfamiliar files or attachments, and to turn off Safari’s “automatically open safe files” option. Or, put another way, don’t do that and don’t do that other thing.

What can one do? Have you checked for a software update lately?

The Mac Observer says Apple issued two Java updates last week. Each said to improve “compatibility, security and reliability” that should prevent picking up Flashback Trojan.

So here’s something kind of funny. Well, it gets kind of funny. The Mac Observer also says Apple has released Java for OS X 2012-003; its third Java update in less than two weeks. Good news for this one: TMO says this update removes “the most common variants of the Flashback malware,” a solution Apple said it was working on earlier this week.

In addition to removing what’s already out there, the piece says the update “also disables the automatic execution of Java applets, a step that will stop malware from exploiting additional security vulnerabilities in Java.”

The Java for OS X 20-12-003 is available as a standalone download, or through Mac OS X’s Software Update utility on appropriate machines.

None of that is the funny part, by the way. The funny part is a move made by a security software maker.

While the world waited for Apple to release its Flashback removal tool, security firms like Kaspersky Lab released tools of their own to do the trick. Problem is Kasperky’s did some other tricks, too. Macworld says Kaspersky suspended distribution of its Flashback removal tool Thursday because that tool itself was making unacceptable changes to computers on which it was used.

Because nothing says “security” like the word “whoops.”

Thankfully, it sounds like whatever it broke is fairly easily repaired. The tool was accidentally yanking user settings, “including auto-start configurations, user configurations in browsers, and file sharing data—from infected computers.”

Apple, the DOJ & the Ebook Wars
The hammer, she has fallen. To what end remains to be seen.

True to Tuesday evening rumors, the U.S. Department of Justice brought suite against Apple and five of the nation’s six largest publishers Wednesday, accusing them of conspiring to raise ebook prices prices and stop Amazon from selling e-books for $9.99 a pop.

The Wall Street Journal has U.S. Attorney General Eric Holder holding a press conference about the suit, saying, “As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles.”

So that’s six suits filed Wednesday, though three of those are already history. Macworld says, “Within hours of an antitrust lawsuit being filed against several large U.S. trade-book publishers and Apple for fixing the prices on ebooks, three of those publishers have agreed to a settlement of the case with the U.S. Department of Justice.”

Hachette, Harper Collins, and Simon & Schuster have made nice with the DOJ, agreeing to settle their respective cases without admitting any wrong doing. Penguin and Macmillan are still on the hook with Macmillan speaking its mind. More on that in a bit.

Apple in legal hot water for ebook pricing conspiracyWith the three who’ve settled, Apple’s so called “most favored nation” clause is done. Terms of the deals call for the publishers to end any deal with Apple or anyone else that “restricts, limits, or impedes the ebook retailer’s ability to set, alter, or reduce the retail price of any ebook.” The publishers also agreed not to enter into such deals for at least two years or to retaliate against retailers that set, alter, or reduce ebook prices.

Am I mistaken, or does that mean the DOJ has rolled the publishers who’ve settled back to selling ebooks to Amazon at wholesale prices? Sort of sounds like that, if one considers the words of a gloating Amazon. Well they sound as if they’re gloating, anyway.

Amazon spokesman Andrew Herdener said, “This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books.”

What’s interesting is A.G. Holder seems to get why the publishers did what he thinks they did. Quoting the Macworld piece, “In its complaint, the DOJ explained that the publishers saw the rise of ebooks, and particularly price discounting by Amazon, as a substantial challenge to their traditional business model.

“When efforts to change Amazon’s pricing policies failed, the complaint noted, the publishers ‘conspired to raise retail ebook prices and to otherwise limit competition in the sale of ebooks.’” Of course with the willing participation of Apple, according to the DOJ.

While admitting no wrong doing, one of the publishers to have settled, HarperCollins, has publicly defended the agency pricing model, which lets publishers, not retailers, set ebook prices. Quoting a statement from the company, “After HarperCollins adopted the agency model in 2010, the ebook market exploded, giving consumers more choices of devices, formats and prices that would never have existed but for the agency model.”

Rejecting the DOJ’s settlement was Macmillan. The publisher’s CEO, John Sargent, says his company turned the deal down because it could make it possible for Amazon to “recover the monopoly position it had been building,” and that a settlement “would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents.”

The Feds weren’t the only ones to take aim at Apple and the publishers. Ars Technica says 16 states joined in the fight, including Alaska, Arizona, Connecticut, Colorado, Illinois, Iowa, Maryland, Missouri, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, West Virginia, and Puerto Rico.

Connecticut and Texas are said to be leading the charge for the states, with Connecticut Attorney General George Jepsen saying, “Publishers deserve to make money, but consumers deserve the price benefits of competition in an open and unrestricted marketplace. Those interests clearly collided in this case and we are going to work to ensure the eBook market is open once again to fair competition.”

Harper Collins and Hachette have already reached deals with the states that’ll include some sort of restitution for consumers, “using a formula based on the number of states participating and the number of eBooks sold in each state.” Jepsen says details on that will be released in a the next few weeks.

What’s difficult about all of this to me is it sounds a bit like using bad behavior to fight evil, which I guess means evil wins either way if you want to put it in mythical type of talk.

Collusion is bad, or at the very least against the law. But the publishers argue — and it kind of seems like this from the outside — Amazon was using its market dominance and deep pockets to build its Kindle ecosystem. They sold books cheaper than anyone else, and what did they care? If that kills the traditional book market and wounds the publishers, so be it. They’ll be number one, even if they’re number one in a market that their own actions are shrinking.

Apple comes along and gives the publishers a way out of the Amazon trap, and they take it. They can now price their books where they want. Cheaper in some cases, though not all, than paper books. But not so cheap that hardback and paper back books just seem silly.

So good for Apple and good for publishers, except for the part where what they did may have been illegal. Or really how they did what they did may have been illegal. That’s up to the courts, and boy, do I look forward to yet another endless legal battle. See also Apple v Samsung, Apple v HTC, Apple v Motorola, Motorola v Apple, HTC v Apple, and Samsung v Apple. And apologies to anyone I left out.

Whether you’re personally on Apple’s side or not, there was this one bit in the DOJ’s case that makes the Cupertino-company sound less than holy. Before Apple did what it did in eBooks — whatever it’s decided it did — the DOJ says they had this other idea: ceding the eBook business to Amazon if Amazon would leave music and video for Apple.

AllThingsD quotes the DOJ’s complaint, which says,

In addition to considering competitive entry at that time, though, Apple also contemplated illegally dividing the digital content world with Amazon, allowing each to ‘own the category’ of its choice — audio/video to Apple and e-books to Amazon.

Did that actually happen? I don’t know that we’ll ever know. That’s not what this case is about, and while I wouldn’t want to accuse the DOJ of lying, All Things D says “it’s not uncommon for lawsuit complaints to contain big helpings of theatrics, with accusations and context that won’t end up having any bearing in court, if it gets that far.”

And now a horrible thought plays in my head. Any chance Steve Jobs ends up taking the fall for this? Sounds terrible right? Horrible thing to suggest, I know, but he’s not here.

Tim Cook’s got a company to run. Eddie the Stuff has business to do. And Jobs is thought to have been, well, he liked to do things his own way, right? The “gentlemen’s agreement” between Apple and other companies in Silicon Valley to not go after each others’ employees… that’s got Jobs’ fingerprints all over it. And that’s illegal.

The DOJ’s own case has a piece from the Walter Isaacson biography of Jobs where Jobs lays the whole agency pricing idea out. Does this end up going down as a Jobs deal?

Apple issued a brief statement on the suit, and AllThingsD had that, too. Apple spokesman Tom Neumayr said,

The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

And You Thought Your Mac was Expensive?
And finally this week, there’s an interesting bit of “what might have been” type tech history for sale on eBay, though I wonder whether it’ll actually be sold. Electronista says someone is selling a complete and operational Macintosh 128k prototype, built before the actual introduction of the Mac in January of 1984.

Perhaps the most interesting thing about the machine, aside form the facts that it exists, it works, and it’s for sale is the disk drive. The proto-Mac uses a “Twiggy” floppy disk drive: the 5-and-a-quarter-inch floppy drive that Apple ditched for the Sony-built 3-and-a-half-inch disks.

Neat as the whole thing sounds, and it does sound pretty neat, it almost seems as if the seller doesn’t want to sell. Starting bid on the never released machine: $99,995.

You know you could get 200 new 16GB WiFi iPads for that much money, right? Or 200 iPads 2s and have a bunch of money left over?

No bids so far, though people may be turned off by the shipping cost, listed as $1,500. The seller may be planning to walk it to you from his home in British Columbia, or maybe he just wanted to let the world know what a cool thing he had without running much risk of parting with it.

Assuming he does want to sell, I wish the seller luck, though I think I might have started the bids at $50,000 myself.

Comments

furbies

Welcome back from your holidays Ken.

Travel somewhere nice ?

BTW

I discovered a pair of the old external 800k (?) 3.5” Apple Floppy Disk Drives in the garage while sorting through boxes of detritus today…

George from Tulsa

On the Poisoned Apple

or eBooks vs iBooks

There’s a huge difference in eBook and TreeBook production cost.  First, there’s all that heavy equipment to print.  Second, there’s warehouses.  Third, there’s shipping.  Fourth, there’s accounting.  And, Finally, Fifth, there’s RETURNS.

Lynn Viehl, author of the best selling Darkyn fantasy series, posted real numbers about Twilight Fall, one of her books that climbed into the NYT top twenty.

Her royalty was 62 cents a book.  That at sales of 64,925 books.  BUT the publisher held back sales of $13,512.69 against returns.

Her full blog post about the economics of Twilight Fall offers an unusual insight into “real world” publishing.  It is at:

The Reality of a Times Best Seller

Amazon did not invent eBooks, but by making eBooks much cheaper, and distributing them over the Internet, including over 3G cell service, Amazon broke whatever stranglehold traditional publishers had that was blocking eBooks.

Publishers, of course, want to charge a lot for books.

Much as the music industry used to love putting one “good” track on a $20 CD.

The iTunes 99 cent track option destroyed that model, much to the joy of consumers, and even to the benefit of artists and labels whose rip-off pricing was driving piracy.

But the Apple which saw its opportunity in music as being a disruptive force to change an archaic pricing model grew into the poisoned Apple that locks in customers and shares publishers’ interests in, yes, illegal price maintenance.

eBooks should be a lot cheaper than paper books.  There’s no printing, shipping, or publisher’s nightmare, printing 100,000 and selling 5,000.

Finally, it is just ludicrous to accuse Amazon of dominating the book business.  Even today, eBooks represent less 15% of total book sales. 

eBook vs Tree Book Sales

Apple’s clear goal in “sponsoring” the “agency model” was to elbow room to grab its 30% fee on book sales by blocking price competition.  Yet because Apple is so about closed systems, even at the same price point, Apple’s closed iOS model vs Amazon’s universal one gives customers excellent reason to prefer Kindle.

Remember all those old stories from the Cold War about Soviet shoe factories meeting Moscow’s quota by using cardboard soles?  The point of competition is that we consumers benefit from “market forces” insisting on better, more, and cheaper products.

“Retail price maintenance,” as practiced by Apple and the publisher cabal, is a total rejection of the theoretic benefits of the free market and “capitalism.”

In what size 7 narrow do you wish your brown cardboard shoes, Comrade?

Log-in to comment