Psystar violated terms of merchant services agreement
The payment-processing merchant for Mac clone maker Psystar abruptly ended its relationship with the company Wednesday after it discovered what was for sale on Psystar's site.
Powerpay refused to process any more transactions for the Open Computer after learning what it was.
(Credit: Psystar)Powerpay had been the payment processor for Psystar's online store until Wednesday, when it yanked its services from Psystar's Web site. That move sent the store offline for several hours midday Wednesday, halting sales of Psystar's Open Computer, which comes preinstalled with Mac OS X Leopard in violation of Apple's licensing agreement for its operating system.
Psystar posted a statement on its Web site Thursday explaining the downtime. "Midday yesterday our store was not receiving any orders. This was due to the fact that our merchant gateway, Powerpay, dropped the ball on us and refused to process any more transactions from our company."
Louisa Deluca, vice president of loss prevention for Powerpay, said on Thursday that her company dropped Psystar because it violated the terms of its agreement with Powerpay. She declined to cite specific violations, but said "there are plenty of reasons why we shut the account off. We did not know that's what he was selling, we learned that yesterday."
Psystar has since switched merchant services providers to PayPal, who processed my transaction with the company on Wednesday. A PayPal representative did not immediately return a call seeking comment on that company's policies regarding sales of goods such as the Open Computer.
Psystar is still under siege from the press. A gentleman answering the phone Thursday morning directed all inquires to a press e-mail alias, and if I receive a response from the company, I'll let you know.
UPDATED 11:30am - I managed to obtain the cell phone number for Rudy Pedraza, who appears to be the owner of Psystar. A polite gentleman who answered the phone said that he was not Rudy, but confirmed the number belonged to Rudy. He took a message for Rudy, and promised to have him call back. Right. Holding breath.
The company also attempted to explain the elusive nature of its home address in Southern Florida in a statement posted on their site Thursday. Psystar's address has changed no less than three times in three days since the story exploded on Monday.
"We're in the process of moving to a new location which is now listed on our contact page," the company said in the statement. "The first new address posted (10481) was in error and our correct address is 10475 NW 28th Street. Psystar was, prior to this past week, not ready to handle the enormous production capacity demanded by the online community. Due to the incredible response we have now expanded to a larger commercial unit to handle the supplies and assembly of Open Computers."
Meanwhile, a News.com reader passed along an e-mail from a colleague who had alerted him to Psystar's existence on April 6, a week before the Psystar story blew up on Sunday night and Monday morning. That's the first instance I've heard of somebody who was aware of the Open Computer prior to Sunday evening, but if other people were aware of its existence earlier this month or year, please send me an e-mail or leave a comment below.
Tom Krazit, a staff writer for CNET News, focuses on all things Apple. He has covered traditional PC companies such as Dell and Hewlett-Packard, chip companies such as Intel and Advanced Micro Devices, and mobile computers ranging from Research In Motion's to Palm's. E-mail Tom.
Ironic that everyone is ganging up on these guiys. I'm old enough to recall that Jobs was selling Apple I's in Popular Electronics and at computer trade shows when Apple Computer, Inc. was nothing more than four guys working out of a garage - with no inventory, but a lot of hype - basically selling "vaporware" in the beginning. And Dell computer? Micheal Dell started marketing and selling IBM clones from his College Dorm room in Austin, Texas - he couldn't even afford a garage in the beginning - his limited capital going to marketing - ads in newpapers and magazines.
Then of course there's Google - they started in business in a borrowed garage.
So what is with the witch hunt over a small startup making Mac clones? Miuchael Dell was lionized for starting out almost exactly the same way when he challenged the IBM PC with his clones.
Jobs and Woz have bragged quite often over the years how they got Apple off of the ground with some good salemanship and little else.
Even Microsoft - I purchased my first product from them (tinybasic) when they were nothing more than a sign over a small space in a strip mall in Albuquerque, New Mexico. They could not even process credit cards then - check or money order only.
So again, what is with this witch hunt?
I don't see how wanting an ACTUAL ADDRESS for a company that's asking for all of your credit card data is a "witch hunt!"
about Dell. You don't know what you're talking about, or you are
intentionally spreading nonsense.
Apple I was not built by four guys in a garage. That's a myth.
And though it was semi-vaporware (Woz had working
prototypes) you have to start with little or no inventory until you
have sales! That's called a startup. They got a big wad of money
very quickly and built the fastest-growing tech company to date.
The fastest to $1 billion in revenue in history (at the time). And I
believe that was Altair the was advertising in Popular
Electronics, not Apple.
Google started with a $25 million investment. Dell did start in
his dorm room, but the genius behind that was using FedEX and
building PCs to order. Clones had existed for years before that
happened. Dell never pioneered ANYTHING hardware or
software-wise. Just assembly and delivery. And Apple beats
them hand's down on just-in-time inventory nowadays.
The witch hunt, and you so speciously put it, is about whether
what Shyster, er Psystar, is breaking the law not only by cloning
Macs and violating Apple's EULA (legality questionable) and the
EFI hack that has a non-commercial license on it (after the fact
it now appears, but still, it's there and quite hypocritical of the
original developer to hack Macs and then complain when his
software is hacked), not that they are being unfairly persecuted.
The courts will sort it out if this is indeed a real company that
will actually deliver a working product. For all we know, that
hasn't happened yet. For all their business making and shipping
computers (they have been taking money it appears), has
anyone actually turned one on and tested it?
Of course Apple will try to shut them down.
You hate Apple, so the law should be ignored?
You think MS wouldn't do this?
Or any other company for that matter?
Oh, to be so jealous.
Sad little guy.
http://www.systemshootouts.org/shootouts/laptop/2007/0515_lt
1100.html
Psystar, stick it to Apple! You have first sale right.
Boycott Powerpay! I don't think the company is worthy of any merchants business.
First off, Jobs has never benefited from his stock options, and
regardless, has surrendered any questionable options.
Second, what exactly is this "first sale right" that you think
Psystar has?
Third, Powerpay should be boycotted because they dropped a
merchant that's been elusive and generally shady, and is selling
something with clear disregard for licensing?
Hell, even the OSx86 project doesn't like Psystar.
overpriced and are very comparable to similarly configured
PeeCee systems. In fact one of the posts here has a link to one.
SJ was found to have known about a few of the backdating incidents. He was also exonerated over the perception that he
had benefitted from any of the backdating.
http://www.computerworld.com/action/article.do?
command=viewArticleBasic&articleId=9003879
Whether or not you support the morons at Psystar, they are in
violation of the licensing for OS X. In the end they're not going
to "...stick it to Apple!", they're going to "stick it" to their
customers who knowingly purchase one of their PoS systems.
"2. Permitted License Uses and Restrictions.
A. Single Use. This License allows you to install, use and run one
(1) copy of the Apple Software on a single Apple-labeled
computer at a time. You agree not to install, use or run the
Apple Software on any non-Apple-labeled computer, or to
enable others to do so... "
It's Apple's right to stipulate that OS X run on their hardware just
as it right for Microsoft to stipulate the Zune software run only
on the Zune. Apple is a hardware company that just happens to
make a great OS.
Apples first action on discovering that the backdating was done improperly was to call the SEC and say, "We have found a problem."
Apple found the problem themselves, reported the problem themselves, and fixed the problem themselves. Other companies should look to Apples conduct in this matter as an example of how to run a company in an ethical manor.
If Apple doesn't want to get pay, then don't sell the OS. Keep it in house. The moment Apple sells hardware with OS, the consumers have the right to rip the OS out and sell it. It's first sale batch. Learn it.
So I would like some research done by this good investigative reporter on where the software is coming from....and is anything like iLife being put in it as well?
It would be really funny if we found out these were being preloaded with the Leopard restore DVD's that come with iMacs...can anyone say OS and many app violations?
http://www.amazon.com/s?ie=UTF8&keywords=%26%2334%3Bmac%20os%20X%26%2334%3B%20leopard&search-type=ss&tag=pcsoftware4u2-20&index=software&link%5Fcode=qs
of the OS after all.
http://wiki.osx86project.org/wiki/index.php/Main_Page
He goes on to say, "...Apple may not be able to sue Psystar directly because the company may be buying legitimate copies of Leopard from a distributor. In that case, the distributor would be liable for a breach-of-contract suit."
I for one probably am a small minority supporting psystar(if they turn out to be legit)
One guy comes up with an idea - let's sell computers that can support as many OS's as possible. Probably has some experience with "hackintosh's" and whatnot. People catch on, it's a huge issue that hasn't been discussed at this scale before.
ps. "Never get attached to any company, they are in it to make money and you are just a "object" that they will use to accomplish their goal!" In this case, it is OK to be more selfish!
the entire story. Or bother to consider how stealing anything
you like but don't want to pay for sets you up for a situation in
which no one will continue to manufacture anything but
garbage. Open source software is also often not free-- and as
far as EULAs, try reading Oracle's or some of the high-end math
software, or cad software--they charge by they number of users
accessing the software, and by the number of processors
running the software on the network. And they have been to
court already.
Microsoft doesn't sell PCs, they sell software and tools to write
software. They have 85% or better of the consumer market for
operating systems--an effective monopoly. They didn't get in
any difficulty with selling _hardware_. A EULA is a contract--so
a violation will end up in the tort system while the damages get
assessed. Apple has had machines cloned legally before (by
UMAX, Power Computing, and Motorola (who used boards
manufactured by Apple), and IBM (which never sold them--just
prototyped them). This experiment drove Apple's stock price
down to $11.00 and saw their market share hit 3 per cent. Why
would they want to repeat that????
They also had their systems cloned in the period 1978-1988 by
several companies, most of whom lost in court. Why--because
the firmware in the logic board is copyrighted, and they never
had any right to copy it. Two companies white-roomed the
firmware. Franklin, and Laser; they had to pay substantial
settlements for some of the things they did, but they became
legal clones--of yesterday's systems. Before all the litigation
gets done, the technology will change.
In the case of this cloner, they are trying to force someone
(Apple) to give up something they own (the operating system for
Macs) for nothing. If you want the open source version, run
Darwin; or FreeBSD, or GNU/Linux; or OpenSolaris. Or do what
more than 20 companies did in the '70s--write their own OS,
and their own application software.
Yes, I firmly believe that pirating copies of the thing and passing those copies around is wrong - a clear copyright violation.
However, my contention is that once purchased, you the user should have the perfect and legal right to do whatever the hell you want with your purchase. If you want to run it on something not built and sold by Apple, you should have the perfect right to - so long as you realize that, like modifying a new car for performance or looks, you should expect no support from the product makers for doing so.
BUT, you are wrong in one aspect - you are perfectly allowed to bundle hardware and software in a commercial package. Apple can sell whole computers all day long w/o violating any anti-trust agreement.
Personally, I can grok Apple's position on the matter - they're selling whole computers, and controlling both the OS and the hardware that they sell makes for their idea of a consistent, reliable and comfortable experience.
That said, some of us like to tinker. Some of us like to do things the non-standard way, to Think Different (to borrow a phrase). So, I purchased Leopard, and I'm building a Hackintosh. If Apple doesn't like it, they can deal with it - I've stolen nothing from them in the process, and I certainly do not expect them to hold my hand while I build and run it, so they're not out of any tech support costs at all.
/P
Bringing Apples prices down would be a very bad thing. We already have far too many companies selling cheep junk. Computer prices need to go up, not down.
On the other hand though Apple really should open OSX up to the public so that others can use it. The hardware to run a mac on is overpriced and you dont have many options... Not to mention the fact that they adopted ATI/AMD Graphics cards on all but the mac pro....
Apple is very closed in their offerings as far as what their software can run on.... While Windows can run on a much broader spectrum of hardware... (Linux obviously supports a broader spectrum so long as there are drivers but yeah...)
I wont say OSX is bad or good in terms of performance... Just that the GUI much like Vista's is flawed (but then any GUI that takes up VRAM is really...)
I think in some ways its good to keep OSX closed (they need to support less and it has less problems because of that..) I think the problem is that people are forced to either A hack the OS (violating the EULA) or buy a Mac both of which arnt really favorable. Hopefully things open up more at some point...
If i recall Apple tried to open up more earlier but they didnt have enough market share and it failed (this was before OSX and i think it was the powerpc days or some junk i forget..) Anyways.... It's a bit shocking since alot of people get in trouble for limiting Consumer choice!!!
can't buy one. I wonder if PayPal pulled the plug on them too.
http://www.news.com/8301-13579_3-9921964-37.html?tag=nefd.lede
apple can really hurt microsoft by letting the clone out of the bag. even better, make leopard completely compatible with pc's and stand back and watch microsoft squirm
http://www.youtube.com/watch?v=ZD7QraljRfM
People use what is familiar to them and makes them feel comfortable.
Many people make heavy use of computers at work and most businesses use Microsoft Windows and Microsoft Office on their desktops. They do have their good points (Microsoft Windows and Office).
Don't get me wrong. I work with UNIX every day and I'd be happy if every computer used either UNIX, Linux, or OS/X with OpenOffice/NeoOffice - unfortunately, it's not going to happen anytime soon.
Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Answer: Because we are not you.
Why is it that fanboy's always assume their operating system is the best and feel compelled to post their "My OS is better than your OS" remarks after stories that have ABSOLUTELY NOTHING to do with their OS? Why? Why? Why?
When will they realize that everyone is different and everyone has their own opinion on what OS is best for thier own use? When? When? When?
OSX, Vista, Linux... it doesn't matter. When will the fanboys stop asking that @#$%% question?
That's what apple does: takes all from open source software, and gives nothing or very little back.
However, they make some pretty good machines with some pretty decent custom software. (Don't Panic - I also have a milion and one reasons why this isn't so good)
You buy Apple for the package - including the logo. I hate the Apple Fan Boys but I am dubious of someone buying this clone for many of the same reasons.
ignorant comments before in my life. I've read comments that
are purely motivated by desire, and not reality.
A. People don't buy Apple products for the "package". They
buy the products because they are good products. Pure, and
simple.
B. About you hating Steve Jobs, or Bill Gates means you are a
completely insignificant individual who has never contributed a
drop of sand compared to these two. You are simply jealous.
C. Just because they use computer parts does NOT mean Apple
computers, and generic computers are the same. Apple
computers, and its operating systems have ALWAYS been
designed to work together. This has also included hardware
implementation ahead of the software changes. For this reason
alone, this is why clones don't work. Generic computers don't
have operating systems optimized for them, by their very nature
they can't..
D. Buy one of these clones, and you will be lucky if it supports
all of the current capabilities of Leopard. I hope someone
reports on that soon. But guess what, don't expect it to work
with future versions. Not because Apple will sabotage it. But
because any hardware/software optimization will may "break"
the clone. This is the primary reason Apple stopped
supporting clones. When a manufacturer decides to use the
system in ways it was not planned for by the new operating
system, the manufacturer suddenly affects a) Research b) Design
c) Development d) Testing e) Marketing.
There are two approaches in the personal computer industry. It
seems, Apple is one of the remaining who chose integration
from the ground up, and almost never changed (I remember
Amelio). The rest of the industry changed because the business
model seemed to favor them, and they were right. Apple took
the hard road, and they were right. It's nothing more than that.
I'm so sick and tired of seeing stupid comments.
- I believe this story was an attempt
-
by AppleRocks1963
April 18, 2008 3:16 PM PDT
- to affect Apple's stock negatively.
-
Reply to this comment
-
-
- No this story was an attempt to...
-
by kojacked
April 19, 2008 3:08 PM PDT
- bring out the trolls.
-
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