The Mac Rumor Sites Controversy Revisited

For the past couple of weeks I've been conducting a public debate with my colleague Michael Munger over at MacObserver over his theory that Mac "rumor sites" hurt both Apple stock prices and Mac users. Michael posted his latest volley on Tuesday, entitled "Yes, Rumor Sites Hurt Us: Rebuttal To Charles Moore"

Please keep in mind that, as Michael affirms, this is a debate of ideas and philosophical perspectives, not an ad hominem flaming match. Civilized people can have differences of opinion on such matters and still maintain mutual respect. So here we go again.

First and foremost, it is my personal policy to scrupulously honor and abide by the terms of any Non Disclosure Agreement (NDA) I'm signatory to. Furthermore, whether there's a contractual agreement in play or not, if anyone, be they corporate or individual, supplies me with information that they indicate is confidential, it is secure with me.

I'm not really that likely a person to be defending rumor sites. I can't recall exactly the last time I visited either MacOS Rumors or AppleInsider, for instance, but the interval would be measured in months. My position on this issue has mainly to do with defense of freedom of speech and freedom of the press rather than enthusiastic fan-dom.

However, I strongly protest that any and all speculation about future products from Apple or other companies in the Mac orbit is necessarily "rumor-mongering." Whether you write about computers, or cars, or stereos or baseball or....., speculation about the unknown future is always a staple topic. People like to read and dream. For example, Doug Landry at the PowerBook Zone, Jason O' Grady at Go2Mac, yours truly, and who knows who else have begun to discuss the next professional PowerBook, possibly code-named "Mercury," in our respective columns. I am on record advising readers that the current "Pismo" PowerBook is the best Apple portable yet, and that if one has been equivocating about a PowerBook purchase, now is the time to make the leap. But that does not mean that I will not write about "Mercury" as news about it continues to leak out, as it surely will.

Leaked information is the lifeblood of journalism, and leaks are inevitable, whether an organization is governmental, corporate, educational, religious, or whatever. Check out your daily newspaper. Certainly organizations have a right to try and keep their internal information secret. However, once it leaks out it's news.

News is news, but it should also be noted well that even pure speculation is still covered under constitutional guarantees of free speech, so long as it's not slanderous, libelous, defamatory, or in violation of copyright. This applies to a much wider spectrum of information than Apple's future product plans. The US government of the day was not enchanted by the Pentagon Papers being made public, but that was freedom of the press too, and I would argue that it was in the public interest.

It is this precious principle of free speech and freedom of the press that Michael Munger appears to be confused about. He writes:

"As far as I am concerned, the buying interests of the public is not above the law. The journalist is not above the law either. Companies too are not above the law, and when they break those laws, that is when journalists have the right and responsibility to print "secret" information. Period."

Well, actually, journalists have a right to print "secret" information any time they like, subject to the general, legally established limitations I described above, so long as they have not broken laws in obtaining the (erstwhile) secret information. So long as the journalist is not personally signatory to an NDA in the case of information about an unreleased hardware or software product, then he or she is under no legal obligation to keep quiet about it if such information comes to his or her attention.

I never suggested that anyone was above the law. The point Michael repeatedly seems to be missing here is that the law is not an issue in the case of publishing rumors and speculation about unreleased products, unless the journalist is in breach of contract under an NDA agreement. I seriously doubt that Apple offers NDAs to the folks at MOSR or AppleInsider.

"Just because there is a market for a type of information does not mean that we have the right to publish it, " Michael asserts.

This is again mistaken factually. If Apple had any legal leverage to exert on, say, MOSR or AppleInsider, they would doubtless waste no time in exercising it. Freedom of the press in the U.S. is protected by the First Amendment. So long as they don't publish libel or slander or copyrighted images, they can pretty much say anything they like, whether its true or a complete fabrication, and that's the way it should be -- not because making stuff up and calling it news is commendable or ethical, but because putting up with such things is part of the price we pay for freedom.

And what would be the alternative, anyway? Trampling freedom of speech? My thesis on this is that if someone wants to speculate on a Website that Apple will release a 2 pound PowerBook with a 1.5 Ghz G5 processor, a 2,400 x 1,800 resolution plasma display, and two week battery life on June 23 next, that's exercise of free speech. Nobody sensible would believe them anyway.

"The right and obligation to inform do not make exception to legal agreements and ethics," says Michael Munger.

It is a philosophical error to lump legal agreements and ethics together like this. At the beginning of this article I said that whether in the presence or absence of any contractual obligation, it is a point of honor with me to never betray confidences. That's my personal ethic. Other people may have different personal ethics. Ethics are subjective. Legal agreements, on the other hand, are objective. They are binding on those who sign them, but legally irrelevant to those who do not.

If a journalist becomes privy to information covered by a NDA he or she did not sign, that may or may not create an ethical dilemma as to whether to go public with the information, but there is no legal inhibition against doing so.

A company like Apple might have a limited legal remedy if they can prove that one of their employees or someone on a NDA leaked the info, but only against that person. Publication of leaked copyrighted material would of course of course be another issue. If a Website or magazine paid for non-copyrighted spy photos of unreleased products and published them, that's more of a legal gray area. The Car mags have been hiring spy photographers to obtain photos of Detroit prototypes and test mules for decades, and I've never heard of any of them being sued or prosecuted for publishing. Once again, once the info is out, there is an arguable case that it's news.

Michael again: "If you want to inform readers seriously, use the material that you have the right to publish."

Once again, a journalist has the right to publish anything he she likes so long as it isn't libelous, slanderous, copyrighted, etc.

Michael argues: "Your responsibility toward the readers doesn't mean that it is suddenly OK for everybody to break Non-Disclosure Agreements (NDA) and inform 'the people' about future releases that may or may not make it to the shelves. It doesn't excuse the pure invention of information like Mac OS Rumors and AppleInsider have done in the past."

Just because the alleged fabrication of "information" offends Michael's sense of ethics (and mine, I hasten to add), that doesn't make it illegal, nor should it. I am a free speech absolutist as far as expressions of opinion are concerned, in that I believe that speech is either free or it isn't, without any fudges like "responsible speech." Responsible to whom? Once you set up a speech policing apparatus you get enforced political correctness and you're on the road to Orwell's 1984. And please don't bring up the old saw about yelling 'Fire' in a crowded theatre. I said free expression of opinion, not malicious mischief.

Jonathan Rauch notes in his book "Kindly Inquisitors" :

"The standard answer to people who say they are offended [by free speech] should be: 'Is there any casualty other than your feelings? Are you or others being threatened with violence or vandalism? No? Then its a shame your feelings are hurt but that's too bad. You'll live.' If one is going to enjoy the benefits of living in a liberal society without being shamelessly hypocritical, one must try to be thick-skinned, since the way we make knowledge is by rubbing against one another."

I never said it was OK for people to break NDAs. To do so personally would violate my code of ethics. But it is not my responsibility if someone else has a different code of ethics or breaks theirs. I would never encourage or try to persuade someone else to break the terms of an NDA either. However, quite frequently I receive unsolicited information that likely is NDA protected -- I don't ask. This is not my problem as a journalist. It is a private matter between the parties to the NDA.

Now, let's apply this to the real world. Ever been to Hotline? New software releases usually appear there long before they are available through any legitimate channels -- NDA-protected or commercial. I have spent very little time on Hotline, and haven't been there for months, but I know people hang out there daily, and consequently I often learn things through the grapevine about new products long before there are any press releases. This is what is usually referred to as "sources" in the journalism game. It is up to the journalist to evaluate how reliable these "sources" are, but once a track record is established, that becomes easier. Again, this transcends the immediate discussion about unreleased Apple products. It is simply the way journalism works. The journalist's job is to apply his or her judgment and sense of ethics to what does or does not get reported, but this is not usually a matter of legalities.

If a journalist decided to only report the spin-doctored information that becomes available in press releases and official PR statements, I submit that he or she would not be doing the job properly, and probably wouldn't have a job (or readers) for very long. Investigative journalism is called "investigative' because it quite often involves the sleuthing out and reportage of information that somebody would rather be kept quiet, and we haven't even talked about commentary yet, which by its very nature is the expression of opinion that very often will be speculative and annoying to some people. These are things I know a bit about first-hand, having made my living at freelance journalism for the past 13 years, and having been published by some 50 different magazines, newspapers and Websites in Canada, the U.S., and Australia.

"Who can deny that people waited because the rumor sites gave information about future releases?" asks "Michael. I've seen a lot of people saying 'well, that new Mac is coming out soon, so I'll wait.' That's not just hypothetical thinking, it is reality."

Yes, and your point is? This is where Michael, and indeed quite a number of readers who write to me on these topics have me baffled. They seem to believe that the right and proper motif is for all the ignorant little consumers to remain completely in the dark about pending product upgrades, and that it would be better for Apple to go right on selling, say, 333 MHz iMacs for $1,299 right up until the day when they introduce, say, a 350 MHz iMac with more features for $300 less with nobody the wiser. That's just great for the consumer who gets hosed. Mind you, whatever the rumor sites, whose influence is greatly exaggerated, have to say, there will be people who buy those 333 MHz machines for top dollar the day before the 350 MHz get released anyway.

Sometimes this is of necessity. A concrete and close-to-home example is my son's purchase of a Lombard 333 PowerBook in late January, when had he been able to wait 45 days or so longer he would have been able to get a Pismo 400 for exactly the same money. He knew Pismo was coming, but his computer had been stolen so he decided had no choice. If he had had the choice, from the perspective of his own interest, he would have much been better off waiting and either buying the Pismo, or buying the Lombard at a "leftover" discount price. However, he at least was equipped to make an informed decision in the matter.

I recall that there was much weeping and wailing in some quarters about how awful it was that Apple had to discount their sizable inventory of WallStreet PowerBooks about a year ago in order to clear the channels for Lombard. And of course the rumor sites got blamed for that too. However anyone with half a clue could deduce that a new PowerBook was due. The only question was the exact date of the introduction, and that was very likely to be the World Wide Developer's conference in May, since that would be exactly one year after the WallStreet was introduced.

When things like that happen, it's a buying opportunity for consumers -- not something to get bent out of shape about. Some people got some pretty good deals on WallStreets, and as Martha Stewart would say, that's a good thing. Obviously, if you pay top dollar for a product at the very end of its production life, you're not getting full value for your money, so discounts are, or at least used to be, expected. Apple seems to have got its inventory control a lot better organized lately, and this did not happen with Lombard -- at least on a major scale (I heard of a few scattered discount deals prior to the Pismo rollout). That's fair ball too. Let the market determine these things. Good old supply and demand. But please, don't blame the rumor sites when Apple has to sharpen its corporate pencil to clear some unsold stock.

Michael Munger reports that he's heard from readers who were "disappointed and wondered why Apple didn't deliver on time. But who set the time? AppleInsider? Mac OS Rumors? Who are they to predict releases? It is one thing to speculate, and it is another to say that you have reliable sources inside Apple assuring you that the new PowerBook is coming next month."

I'm afraid I have little sympathy for anyone who complains that something they read on a rumor site didn't pan out exactly as was predicted. Gimme a break. Are there really people that dumb? However, while we're at it, I am constrained to point out that the folks who incorrectly predicted Pismo's debut at MWSF weren't off by much, and had the software development gone as planned, they might not have been off at all. Most of them also had Pismo pretty much nailed as to its specifications. My hypothesis remains that Pismo was originally slated for MWSF.

The argument that "half of what the rumor sites publish is a pack of lies anyway," is strange. If that were true, then their credibility, such as they have, would be destroyed after a few wrong calls. Actually, some notable clangers notwithstanding, their track record for ballpark accuracy is not that bad, and in any case it is often the true stuff they publish that gets people's backs up. So the reasoning seems to be that even if they know insider information that is likely true, and are not legally inhibited by their own signatures on a NDA, they still shouldn't publish, to which I say poppycock. That's not the way the real world works.

I've also heard from people in the reseller sector that the optimistic Pismo prognostications put a damper on Lombard sales. Well, life is tough all over. It doesn't seem to have brought prices down much, and there has been no apparent glut of leftover Lombards available at discounts. In any case, you can't rationally hang this on the rumor sites either. By last December, Lombard had been in production for eight months with no speed bumps, specification upgrades, price reductions -- nothing. Anyone aware enough of the Mac scene to have any knowledge or interest in Mac rumor sites would also be aware that a new PowerBook was coming soon, and they would have been just as aware even if there were no rumor sites. It's a simple deduction based in history and arithmetic. Which is why I can say with pretty good confidence that there will be a new PowerBook on the market, probably by MWSF 2001, and that it will be faster, no more expensive, and come with a bunch of cool features that are not available on Pismo. That's not rumor-mongering or irresponsible speculation -- it's just common sense deduction.

"The rumor sites are not the biggest factor on Apple's stock and performance," says Michael, "but they do have an influence. An influence that we can't measure concretely, which paves the way for denial. But we cannot dismiss something just because we can't write directly on paper. It has an indirect effect on the public and Apple's image."

Just what are you getting at here, Michael? Yes, I suppose the rumor sites do have "an influence." So what? Are you suggesting that they shouldn't have the constitutional right to free speech and freedom of the press? If so on what grounds? Oh, right, "the indirect effect on the public and Apple's image," and its stock price.

I find it difficult to credit the notion that Wall Street hangs on every word uttered by Ryan Meader or the people at AppleInsider or Mac The Knife. However, worrying about Apple's stock price ups and downs is not my job as a journalist or a consumer in any case.

"Remember how strong Mac OS Rumors was in 1997," asks Michael," we all went there to get our news because we couldn't get anything interesting from Apple itself. That affected a lot of people's buying habits because they wondered what would happen and kept away from new Macs because of everything they read from informal sources."

Um - remember how much smaller the Internet was in 1997, like about 1/4 or 1/8 the the size it is today? Whatever, it was a lot less of a factor. I think it was stories about Apple in TIME Magazine and The Wall Street Journal that were getting most people worried back then -- not MOSR. And even at that, would Michael suggest that TIME and the WSJ were out of line in reporting the very real trouble at Cupertino? Apple's problems in the mid'90s were caused mainly by poor management decisions, not the mainstream press, and certainly not Mac OS Rumors, and I would strenuously argue that the public -- consumers and stockholders -- had every right to know about it.

Now let me say in closing that I'm delighted Apple is doing well, increasing its market share, and making lots of money. It doesn't bother me a bit that Steve Jobs has a new jet. That's all great, and I genuinely hope that they keep making even more money, and that the stockholders all get rich. But it's not my responsibility as a journalist to run everything I say or write through a "how-will-this-affect-Apple's-image-and/or-profitability" filter. Indeed, it is my job as a journalist covering the Mac beat to criticize Apple when I think they mess up, as well as praising them when they do good, and I do both. Check the archives. I call them as I see them. And when I criticize, I know to expect letters from folks who suggest that I'm being too "negative" about Apple. Sorry, wrong department, you're looking for Public Relations -- down the hall and to your left.

Charles W. Moore

.

Saturday, 26-May-2012 16:32:11 EDT