Virgin Accuses Apple of Abusing Monopoly

worm eater writes "The Register reports that VirginMega (Virgin Group's online music venture in France) is asking the French antitrust authorities to force Apple to license the FairPlay DRM. If France agrees with Virgin, will this be a blessing in disguise for Apple, making their DRM format the defacto standard, or will it be the downfall of the mighty iTunes Music Store?"

Comments

This Raises An Excellent Question

[ackthpt]

If France agrees with Virgin, will this be a blessing in disguise for Apple, making their DRM format the defacto standard, or will it be the downfall of the mighty iTunes Music Store?"

This raises and excellent question: Is Apple a:

A) Technology (I.P.) Company
or

B) Hardware Company
or

C) Service Company

Apple started as A & B and has dabbled in C, but IMS is solidy B & C. With their deals with Motorola (iPod tech in phones) and HP (own brand of iPod) they further A & C. If FairPlay becomes the defacto standard this places them squarely in the A camp again, which actually benefits Motorola and HP, among others who make hardware for them. Will Apple ever allow the Mac line to be made outside the company again, as it was in the Jean Louis Gassée days?

While it all looks rosy for Apple, I can plainly see now how both Sony and Microsoft want to plough into this market, so they can get it all wrong, make people mad (ATRAC3? I thought it said 8 Track!) (my mPod has been 0wn3d!) and lose lots of money.

Re:This Raises An Excellent Question

[Anonymous Coward]

In this case, Apple is C). And, it's very very hard to say they have a 'monopoly' position, especially coming from a RECORD LABEL.

If said RECORD LABEL wants the monopoly to end, they should maybe consider the (literally) hundreds of companies willing to get into the online music distribution business. After all, a RECORD LABEL would have the power to license songs to any other business they choose.

This is absurd. If Apple has a monopoly, it's because the RECORD LABELS gave it to them. This is called playing both sides against the middle.

Re:This Raises An Excellent Question

[proj_2501]

VirginMega is a store, not a record label. Virgin Records isn't actually owned by the Virgin Group. It was sold off to EMI in 92, and V2 Records is now their record label, started in 96 after Branson's non-compete clause expired.

Re:This Raises An Excellent Question

[mblase]

Will Apple ever allow the Mac line to be made outside the company again, as it was in the Jean Louis Gassée days?

When Apple licensed clones of their computers, it was intended to broaden the MacOS userbase. What happened instead was the MacOS userbase remained the same size, and Apple lost money to the clonemakers. Thus they soon rescinded the licenses and went back to doing what they always did.

Doubtless this is part of the reason Apple's reluctant to license FairPlay. As long as they control both it and the iPod hardware, they can keep the iPod/iTunes experience Insanely Great(TM) and make more money to boot. But until the iPod and iTMS actually reach monopoly levels of domination, licensing FairPlay would just decrease the quality of that experience without increasing Apple's marketshare.

Re:This Raises An Excellent Question

[harlows_monkeys]

When Apple licensed clones of their computers, it was intended to broaden the MacOS userbase. What happened instead was the MacOS userbase remained the same size, and Apple lost money to the clonemakers

Indeed, and the reason for this is that the cloners were very limited in what they were allowed to do. They weren't allowed to design their own motherboards, for example, but rather had to buy them from Apple. The rest of their design had to be approved by Apple.

So it is not surprising they failed to grow the Mac userbase, since Apple would only let them produce machines that were essentially exactly the same as Apple's Macs. One of the cloners (Power Computing, I believe) showed off at trade shows a couple prototypes, including a cool laptop back when Apple didn't have any cool PPC laptops, that would have taken the Mac to new markets, and begged Apple to allow them to sell them, but Apple said no.

Re:This Raises An Excellent Question

[macdaddy]

Will Apple ever allow the Mac line to be made outside the company again, as it was in the Jean Louis Gassée days?

No, they never will. At least they won't if they value their company, their products, their income, and the people who support all that. The Apple clone market was a resounding fuckup. That idiot CEO should be flogged for what he did. He caused an absolute nightmare for support. People didn't call Epson or Umax for tech support. Oh no. They saw the Apple logo and called Apple for support. The Umax and Epson clones were the worst of the lot. At an Apple Service Center I worked at we had racks of dead Epson and Umax clones. They couldn't be fixed. The companies refused to honor the warranties. They were POSs. DayStar and Power Computing did a pretty damned good job of making clones (especially the SMP DayStar boxes) but that still didn't fix the support issue. The Radius machines were also junk. The clone "experiment" was far and away a horrible fuckup that we all should hope never happens again.

And it wasn't Jean that licensed the OS and CHRP platform to the cloners. It was Spindler.

Am I missing something?

[r_glen]

...will this be a blessing in disguise for Apple, making their DRM format the defacto standard

How exactly would this be a blessing in disguise? Wouldn't it just open the door to more iTunes-compatible players to compete with? Or does Apple stand to make a pretty penny by licensing FairPlay to the world?

Holy!

[darth_MALL]

Virgins!?! Apples!?!? It's all sounding very biblical to me. Leave it up to the Big Man to decide.

IE-only shoppe

[jez9999]

Le navigateur que vous utlisez ne vous permet de surfer sur ce site.
Pour surfer sur ce site nous vous recommandons d'utiliser Internet Explorer comme navigateur.

Looks like they don't want you using anything but IE to access their rather shitty site. Going in with IE, I can tell you it doesn't seem like there are any Windows-only features there that would justify not accepting other browsers; just doubtless lazy web design. Good example of a site to quote when somebody asks you for a major site that is incompatible with non-IE browsers.

Re:IE-only shoppe

[armyofone]

"Just use the User-Agent Switcher, works for me."

Terrible advice IMHO. The more that other browsers identify as IE, the less likely these lazy designers will ever catch a clue. Do the world a favor and send them an e-mail explaining why you won't be back instead. It might not get through to them, but acquiescing definitely won't.

Just my 40% of a nickel...

What is Apple dominant in?

[SuperKendall]

Virgin claims that Apple is abusing a "dominant" position by not licensing its own DRM.

But "dominant" is not really applcable yet. Are they dominant in music sales overall? No way. Are they dominant in being able to play music you buy online? Not even that is true, since the percentage of PC's is so much larger than Macs.

Perhaps at some distant point, when online music sales erally exceed physical CD sales (if ever?) then Apple might be called "dominant". In this case it's like a black hole calling the kettle black.

There is even an out if they REALLY want to sell music that can play on an iPod - MP3. Just because that format lacks technological features they would like, does that really give them cause to proclaim Apple is a monopoly that should be forced to share?

It will be interesting to see what the courts make of it.

Re:What is Apple dominant in?

[afidel]

I don't know French law but under US law you have to abuse a monopoly position in order to get your wrist slapped (see Microsoft), simply having a monopoly does not place any burden on you. Natural monopolies are not a bad thing, if you have a superior product and the market naturally flows most of the business your way then you have been a good capatalist and produced a superior product at a price point that most of the market will bear.

Re:What is Apple dominant in?

[Durandal64]

What's stopping other stores from selling their music in MP3 format? That plays on iPods just fine. Oh, the record labels won't license unless you use DRM? Well I don't really see how the record labels' policy is Apple's problem.

It might not change much...

[brainstyle]

...at least for now. Unless Virgin can offer a music buying experience that works as seamlessly with the iPod as Apple's - since it's clear that they're trying to sell their tunes to iPod owners - then they'll still be missing the point. I suspect what most people dig most about the iTunes store is integration and ease of use. They aren't terribly concerned about file formats and rights managements schemes. Sure, some are - plenty here on Slashdot, for instance - but I doubt the average person is too concerned by that.

Plus, Apple's the cool music company right now. I just saw someone on the street this morning walking with her nice custom-made iPod purse which still clearly had an Apple logo on it, so you knew it was an iPod in there, and that she dug Apple. I suspect she'd use the iTunes store (except I'm in Canada, alas).

But then, I may be underestimating the tech literacy of the average person. I'd be glad if that were the case.

Scope is way too narrow...

[sockonafish]

Apple has just as much as a monopoly on FairPlay as Nike has on Air Jordans. That is, they have a monopoly on a product, not a monopoly on the music player/music store market. By revenue, Apple has a 55 percent market share for mp3 players. By units, only 31 percent. I don't know how much of a market share iTunes has, but FairPlay songs are only able to be played on 31 percent of mp3 players. Good luck crying monopoly in court on a company whose market share isn't even close to a majority.

They do have competitors, and those competitors are obliged to compete. If they can't, tough.

by extension?

[crono_deus]

Hrm.
Ok, so, say for instance, a compay makes software that runs on only one platform. The software is an incredible hit and fuels the sale of this platform. Other companies want this killer app on their platform. Do they have a right to force the original company to make the software for their platforms?

Draw your own conclusions, but my opinion is thusly: hells freakin' no. Say my company makes software for Apple hardware (and by extension OSX) and it's so freakin' incredible that everyone goes out and buys OSX. No on, but _no one_ has the right to force me to port my app to their platform. It's _my_ software.

I see a similar thing here: Apple has this "app" (AAC wrapped in FairPlay) and it works on the iPod. Apple hasn't stopped anyone from writing other "apps" for the iPod (within the specs of the iPod, of course, just like you'd have to write hardware specific stuff for PPC), but it shouldn't be forced to license that "app" to anyone else.
Now, it _may_ be really good for them to let other people use FairPlay, but I don't feel I have the information I need to make that call.

VirginMega?!?

[JBMcB]

I think it's funny that a company called VirginMega is suing a company for being a monopoly. "Globex MegaCorp PanGalactic Enterprises is being harmed by Frank's PC Haus monopoly on the computer service business in Saginaw, Michigan. We are suing!"

I bet the French government will back Virgin just 'cause Apple's DRM wasn't programmed in French or something.

That is to say...

[FredFnord]

Indeed, and the reason for this is that the cloners were very limited in what they were allowed to do. They weren't allowed to design their own motherboards, for example, but rather had to buy them from Apple.

First: that's misleading. They bought motherboard DESIGNS from Apple, not motherboards.

Second: let's just look at this for a second. One of the StarMax machines included a custom-made PCI card with ethernet and something else (video? SCSI?) on it. The drivers were from Motorola. When the next version of the Mac OS came out, the card simply stopped working because of the way they'd written the drivers. Apple was called over the next week by hundreds of irate StarMax owners.

But I'm sure that if they had just been able to design their own motherboards, everything would have just worked fine and there wouldn't have been any problems with compatibility or anything.

As for the idea that the PowerTowers were the end-all and be-all of Mac-hood, only two things to say. One: they were cheaply made. Things broke. Hardware failed. The case was a generic PC case with flimsy drive-bay doors with plastic fittings that broke off under the slightest bit of pressure. The actual basic design was nice, but the execution *sucked*. And two, especially at that year's MacWorld Expo, PowerComputing sold significantly below cost, because they wanted to entice as many people away from buying a high-end Mac and into their camp. When Apple had really hired people on to cover the low-end while they tried to get the high-end business. Now, you can decide that this was a slimy thing for Apple to do, to try to get someone to shore up their weaknesses rather than steal their best customers. And that's a valid point of view, I suppose. But when it turned around and Apple saw a whole lot of lost sales to people who otherwise would have definitely been buying the highest-end Mac kit, they got miffed.

I would've too. And having worked on a number of Mac clones back then, as a techie, I have to say that none of them were engineered even as well as the PM8500. Which in and of itself was one of the most bone-headed piece of engineering as I have ever seen in all my days.

But at least it was STURDY bone-headed engineering.

-fred