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:
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
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
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
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.
quote: I don't think that anyone will be able to force Apple to adopt flash, since it is merely a business decision by Apple not to include that feature in their product.
quote: Government interference in the marketplace for reasons other than safety or health is inefficient and wrong
quote: EU doesn't need any of this money, they get all of their from the members tax payers.
quote: they only do what's best for themselves and holding onto and growing their power and control