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Psystar, EULAs, and why Apple has no clothes.

Updated on July 13, 2008
EULAs should be ripped up as they aren't worth the electrons they're written on!
EULAs should be ripped up as they aren't worth the electrons they're written on!

Many moons ago, when the PC world was looking forward to the new and improved Windows 3.1, Yugoslavia was still a Communist country, and Michael Jackson hadn't yet turned into an alabaster porcelain figurine, an associate announced to me that he was going to open up a new business importing Apple Mac computers from the USA into Canada and selling them openly on the gray market.

The gray market is a term used by importers who are not "authorized" by the manufacturer to sell particular products in a specific territory. Gray marketeers find a country where the particular product is available cheaper than another, then buy up as many as they can afford, ship them, and resell them in the expensive market at a price lower than can be obtained at the local dealer.

For reasons known only to Apple Canada, in those days a reasonably equipped Macintosh would sell for US$4,000 in Blaine, WA and US$7,000 across the line in White Rock, BC. My friend didn't have to do extensive calculations to determine that he could buy the Macs, drive them across the border, put them for sale to the public at a "let's split the difference" $5,500 and clean up.

Sure enough his location soon resembled a shaved ice stand in a heatwave. Macs were flying out the door as fast as he could bring them in. I wouldn't be surprised if the tiny border town of Blaine, WA showed up on Apple's books as having the highest per capita Mac usage in the universe.

The local dealers who soon watched their sales slow to a crawl started waving their fists in the air and making all sorts of threats. These threats were completely hollow as many manufacturers have learned to their chagrin that gray marketing is not illegal in any way, shape or form. If you buy a product in Nation A, then transport it to Nation B while paying your duties and taxes, there is absolutely no regulation as to what you do with it. You are free to keep the product, sell it, or use it as a boat anchor. The government doesn't care. But the manufacturers who see their "authorized dealers" starved out by their own irrational pricing policies do care, so my friend kept getting calls from local dealers that "Apple is going to shut you down!!!"

My bud didn't lose any sleep over it. He was breaking no laws, and he knew it. If a huge corporation wants to take a little guy out of business, they can just start throwing phalanxes of attorneys at him, hoping that he would get scared off. But the bottom line is always that at some point it has to go up in front of a judge, and if the legal action proves to be pointless, megacorp can find itself paying millions of dollars in damages. Apparently Apple Canada knew that they didn't have a leg to stand on, so the long rumored "action" never materialized. Instead, Apple Canada slowly brought its prices into line with the US-side ones, but not before my friend made enough to pay off his mortgage and then some. The Apple Emperor clearly had no clothes.

This is not necessarily just a history lesson, but an illustration of a somewhat similar, currently occurring situation. A little Florida company called Psystar recently announced that they were marketing PCs that were "Hackintoshed" to run OS X. Since Apple maintains a tight rein on its OS and only allows it to run on its own proprietary hardware, every Mac user has to "click off" on a zillion-clause EULA where they agree to run OS X on non-Apple hardware under pain of death. Psystar simply ripped a hack off the web that allowed any PC to run OS X, slapped it onto a fairly cheap generic PC and made headlines all over the world.

Many were the prognosticators who claimed that Psystar would be deluged by lawsuits emanating from Cupertino, but so far, not only has Psystar marched merrily along cranking out their very poor copies of Macs at a fair clip, but they have just announced a couple of Xserve clones, named OpenServ for anyone who would be crazy enough to trust their server farm to cheap clone hardware running a hacked OS.

Why isn't Psystar squished like a Florida June Bug into the Miami swamp mud yet? Simple. There is nothing that Apple can do. A violation of an EULA is a complete and total joke which no self-respecting judge would ever hear, let alone rule for. In fact, I'm rather surprised as to why the U.S. Supreme Court hasn't heard a case yet where an user has sued the manufacturer for an EULA which violates their civil rights. EULAs are all gab and no stab, and one of the great deep dark securely-held secrets of our age is that they aren't worth a plugged nickel. Adherence to EULAs violate several key legal prerequisites for binding contracts, including certifying the identity of the individual agreeing to it, the ability to rescind a contract within a reasonable amount of time, the possibility of having your legal representative review the covenant prior to agreement, and countless other legal consumer protections. The crux of the matter is that EULAs have no teeth whatsoever.

While Psystar burst onto the personal computer user's collective consciousness in a flurry of ineptitude, with various wrong addresses being listed at first, all sorts of contradictory information being announced, the owners in interviews sounding like they were either on drugs or brain-damaged, and the final product being lackluster to the extreme almost to the point of being unusable, that is effectively irrelevant to the lesson at hand: EULAs mean nothing. Whatever artificial legal constraints manufacturers can dream up to impose on their users won't hold up for two minutes in any legitimate courtroom. EULAs are nothing more than a scare tactic designed to intimidate users who are scrolling through endless legal boiler plate and assuming that since it's so long and complex and indecipherable it all really means something. When in fact it means nothing at all.

It is high time that EULAs be eliminated. A personal computer user who has just forked over hundreds or thousands of dollars to pick one particular product from a very competitive field should be treated with more respect and dignity than being taken for a fool.


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