by wchurchill
Tue Mar 21st, 2006 at 08:59:10 PM EST
This is absurd on the part of the French government.
The iPod in digital music, the Playstation 2 in video games, the BlackBerry in portable e-mail: some of the technology industry's biggest recent successes have been built around closed systems with a tight connection between hardware, content and services.
According to the industry's received wisdom, these closed systems are characteristic of new technology markets in their infancy. The tight connections make life easier for consumers, who otherwise would find it hard to tap into the new digital applications and content.
According to French legislators, however, too much success for new digital platforms might pose a threat to consumers, potentially leaving one company with excessive power as a gatekeeper in the digital media world.
IMO this kind of action makes sense in markets that are dominated by a monopolist, who utilizes a "bundling" strategy to effectively prevent competitors from entering the market. Thus in the late '60's, the US anti trust department brought suit against IBM because they were basically giving away the software (tying it into the hardware) which was slowing the development of a new software industry. There was no real competition on the hardware side, so the governement's position was basically that IBM could set their hardware prices high enough to cover the software that was tied into the package--keeping a monopoly. (this is a simplistic but reasonably accurate characterization, IMHO).
but in this case, there is no monopoly. Yes Apple has a lead in an industry where leads are notoriously lost quickly. But there are all kinds of MP3 players; all kinds of ways to download music. Apple's new product is clearly a huge success because it gives people what they want. The competitive markets will take care of this "problem (?)".
And I obviously don't understand the French political system, but what in the world is a legislature doing getting involved with this? There is an EU court for reviewing monopolies, and practises of monopolies. Why don't they address the issue? How does this make sense for a legislature, with limited understanding of competitive markets, or of technology markets, or of monopolies, or the practises of monopolies,,,,how does this make sense?
The lower house of the country's parliament on Tuesday approved a law that would break the tight link between the iTunes online music store and the iPod portable player. By requiring that songs bought from iTunes - or from any other digital music site - can be played on any music players, the French law seeks to break down the barriers created by incompatible "digital rights management" formats, the copyright protection software that limits where and how music can be played.
The decision has sent tremors through the wider technology world. Among industry analysts and groups, the proposed law has been roundly condemned as ill-conceived and potentially disruptive to the first successful business to be built around digital music.
IMHO this is a horrible example of governments sticking their big noses into business affairs where they do not belong, and are best handled by the competitive market. I would be very appreciative of someone explaining the logic, or the background of this action. Am I missing something here?
