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Pending EU legislation may force Apple to open up its platform to rivals like Adobe.
Change in antitrust laws could have serious implications for many other companies as well

The European Union's European Commission, under the guidance of commissioner Neelie Kroes, has had no qualms with slamming U.S firms with massive antitrust fines.  Now it's preparing a massive new initiative which just may have a major effect on some U.S. firms.

The new measure, called the Digital Agenda, raises many points, but one of the most significant is to redefine what companies can be subject to scrutiny over abuse of their market position.  The Agenda looks to change the necessary language from "dominant" to "significant".  Its text, found here, includes the passage:

Since not all pervasive technologies are based on standards the benefits of interoperability risk being lost in such areas. The Commission will examine the feasibility of measures that could lead significant market players to license interoperability information while at the same time promoting innovation and competition.

This proclamation may affect a number of key players in the tech industry by forcing them to open their gates or face massive fines.  

Perhaps the biggest example is Apple, Inc.  Apple is being probed by U.S. government antitrust investigators over its decision to ban Flash from its iPad and iPhone.  The problem is that Apple can easily argue that it does not have a "dominant" position to abuse when it comes to the iPhone.  And even the iPad, the new clear leader in the tablet industry could stake make similar claims -- after all the term "dominance" is loosely defined.

However, there's little doubt that it plays a "significant" role in the tablet and smartphone industries.

Under the new measure, if the language is approved, the EU may gain the power to force Apple to allow Flash onboard.  It may also be able to finally force Apple to allow third-party devices -- like Android smartphones, the Palm Pre, or rival MP3 players – to sync with iTunes.  The EU has long complained about Apple's efforts to block such syncing.

If the measure forces the hands of companies like Apple, they may feel compelled to eventually embrace similar measures in the U.S.  The U.S. is slowly trending towards a policy of stricter antitrust enforcement, following in the EU's line.

Ultimately the issue boils down to whether the market's largest players have a responsibility to "leave the door open" when it comes to interoperability.  This may come at a small expense to firms to publish documentation, which they could likely cover with licensing fees.  However, what they ultimately truly stand to lose is a tool against their competitors.  

By tightly controlling their platforms and various products' ties, companies like Apple can build their brand in the eyes of the consume -- a key part of the so-called "halo effect" which has driven purchasers of one Apple product to pick up more Apple gadgets.  It's remarkably similar to the inside track that Microsoft Word and Microsoft Internet Explorer were given with Windows -- which landed Microsoft in hot water with U.S. antitrust investigators around the turn of the millennia.  Ultimately, such maneuvers don't even need a monopoly -- as Apple's extensive use of them has proven.  They merely require a significant market share to start; hence the EU's claim.

So is interoperability something that should be mandatory?  Or should companies be allowed to close their platforms tightly?  Advocates of a more laissez faire government would certainly argue the latter, but the EU and Kroes seem convinced of the former, a platform that may have a big impact on some of the tech industry's top firms in the U.S. and abroad.

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be careful with the language
By GruntboyX on 7/2/2010 9:42:18 AM , Rating: 2
While breaking the Itunes/Ipod tie in is a good thing. The language needs to be carefully worded. In the current language they want to open up Itunes. but this doesnt help any of the consumers who purchased Ipods. It would perpetuate a system in which anything could sync with itunes, but only itunes could sync with the ipod. It doesnt help retailers who sell music get access to a large faction of the market. In my mind this is a much bigger deal then forcing other players to sync with itunes.

I am sure the music industry would agree as well :b

RE: be careful with the language
By HrilL on 7/2/2010 10:44:47 AM , Rating: 5
That was completely my thought. I personally hate iTunes and wish I never had to use it again. It is the most bloated POS music player on the market. It does nothing special. Who in the wold needs 6 services for a music player. It forces you to install quicktime(the actual player btw) and the updates always try to trick you into installing Safari...(That box should always be unchecked by default) There are itunes alternatives for the ipod and iphone but they don't work that great and Apple tries to break them with every new update. (Completely anti-competitive and anti-consumer) I'll never own another apple product. I've only owned 2 in my life first and second iphones.

RE: be careful with the language
By reader1 on 7/2/10, Rating: -1
By MindParadox on 7/2/2010 4:01:56 PM , Rating: 3
anticompetitive does not only mean that you lock a person into using only your product (you can only buy the iphone) it can also mean that you only have one option of usage with the product as well (even though there are many alternative media programs out there) itunes is the only one that can be used with the iphone, for example. this is anti competitive, as WMP and Winamp both have a sync capability for devices as well

RE: be careful with the language
By KCjoker on 7/2/2010 6:38:20 PM , Rating: 3
Remember that the next time you whine about Microsoft.

"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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