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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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RE: Apple
By reader1 on 7/2/2010 1:25:56 PM , Rating: -1
Kin was yet another failed attempt by Microsoft to be hip and cool. The ads were unbelievably creepy.

Apple is the only tech company that understands average users. Google and Microsoft products only appeal to geeks.


RE: Apple
By Helbore on 7/2/2010 4:36:50 PM , Rating: 2
You know what, I actually kinda partially agree with a Reader1 comment! I wonder if the world really is coming to an end?

Apple certainly understands that the average consumer doesn't understand tech companies. That's why they don't sell any of their hardware based on what it can do, but rather on how shiny it is.

Just look at the old iPod commercials. It was just a bunch of dancing sillouhettes against a bunch of different colours. The point of the advert? Our music player is in different colours. Hardly a testament to its quality as a piece of tech, but it certainly makes the Average Joe go "oooh, pretty."

Like em or not, Apple do have an effective marketing department. If only their after-sales PR was as good.


RE: Apple
By jabber on 7/4/2010 7:27:19 AM , Rating: 2
This is what Apple boils down to -

Average products for the average customer at an above average price.

Anyone else goes elsewhere.


RE: Apple
By edgardcastro on 7/7/2010 7:00:34 AM , Rating: 2
Apparently there's a lot of Geeks out there then.

While the "average" user is bought 3 million iPads in 80 days, a million PCs is sold EVERY DAY.

Whats the definition of average again?


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