EU Officials Cautious on AntiTrust Issues

An anonymous reader writes "News.com has a piece up looking at reactions from EU officials to the iTMS antitrust case. The individuals involved are wary of cracking open the DRM that protects the music sold at the iTunes Music Store." From the article: "One of the most outspoken government advocates on the issue is Norwegian consumer ombudsman Bjorn Erik Thon, who said he would act soon depending on how Apple responds to a letter the government had sent the company. If Apple can require an iPod for songs via iTunes, then music, book and film companies might restrict their products to specific players too, he said."

Comments

Media restricted to prefered player only

[Anonymous Monkey]

film companies might restrict their products to specific players too

Sounds like Sony and Blu-Ray.

Very common

[gr8_phk]

>> film companies might restrict their products to specific players too
>Sounds like Sony and Blu-Ray.

Sounds like every game console ever made.

So?

[Wordsmith]

So what? Game companies can make games that run on only one platform. The company that makes my water pitcher makes filters that can only fit in one brand of pitchers.

The problem isn't the DRM itself. Apple (and others) make intentionally crippled products, limited by this DRM junk. The consumer is free to decide if the crippled product is worth the price he/she is being asked to pay. If it's not, the product goes away, for lack of a market. Maybe some consumers DO find it a worthwhile trade, and the company can flouish because of it. Maybe some don't. If a government interferes with that process, it's interfereing with the free market.

The problem comes in when the government also interferes by making it illegal to circumvent the DRM, or do other "unauthorized" things to products people already have purchased. If Apple wants to sell me a crippled product, but I can make it better by circumventing the DRM, so be it. I haven't done anything ethically wrong until I've redistributed the product (presuming one buys into copyright as a valid concept, which we will for purposes of this dicussion). Maybe that easy circumvention is WHY it's worth it to me ot purchase the product. No one's going to tell me I can't rewire my blender to make it operate past spec, or cram together my own water filter out of parts I find in the store. It shouldn't be any different with media.

The solution is for government to butt out entirely.

"Might"? that's the freaking point!

[plasmacutter]

The whole point of DRM was never to stop piracy, but to force any and all vendors to license the use of official playback by preventing them engineering their own playback ability.

Ed Felten has pointed this out on numerous occasions, and I seriously doubt these government officials are so stupid as to not see it.

News flash corporate sellouts: you can't have your cake and eat it too..

DRM is deliberate incompatibility, and if you protect it you can't encourage interoperability at the same time!

This is ridiculous

[ostermei]

"If Apple can require an iPod for songs via iTunes, then music, book and film companies might restrict their products to specific players too, [Norwegian consumer ombudsman Bjorn Erik Thon] said."

That's such a load of crap. He may have a point if Apple were the originators of the content itself, but that's not the case. Apple is just one of many retail salepoints for songs that are produced elsewhere. If he doesn't like Apple's particular way of selling the songs, he has every right to purchase his music somewhere else (including buying the physical CD and ripping the music into whatever DRM-free format he would like... MP3, for example, which would still play on that iPod he apparently was forced to buy).

A more accurate way to argue the point he's making is to say that it would allow retailers to restrict the products they sell to specific players. For example, Barnes & Noble might start selling only ebooks in a proprietary .bn format that can only be played on their bnReader device. That won't stop you from swinging by Borders and picking up the good ol' dead-tree version, though.

Re:Because you HAVE to buy from iTunes

[MustardMan]

It's that whole leveraging a monopoly thing. Microsoft didn't hold a gun to your head and force you to use IE, either, but they got nailed for bundling it with windows. In a lot of ways, the Apple DRM is even more strong-arm than MS's inclusion of IE. But the Apple apologists always act like it's ok, because they are Apple.

I use exclusively Apple computers. I own three ipods. I bought a new macbook within a few days of launch. All my friends call me an Apple fanboy because I constantly try to convince people to switch. But I'm not so gullible to think that the ipod/itunes lockin isn't a blatant abuse of the customer. Apple has pretty much guaranteed I am going to keep downloading my music from bittorrent, by using an artificial extra layer to limit customer choice, and still have no effect on piracy.

Confusing the device provider w/content provider.

[Sierran]

This is a common trend. I'm not a fan of zealous copyright wielding, and (full disclosure) I am an iPod owner. On the other hand, around 95% of the music on my iPod is there through having been ripped off a CD collection I've been accruing over the past 15 years. The Norwegian ombudsman's quote seems to me to miss the one critical point that other posters above me have had no trouble seeing: The fact that Apple is the sole source of the player but not the content. If they were the sole source of both, that would indeed be a problem. If there were no other way to get music onto an iPod, that would indeed be a problem. If there were no other way to get downloaded music from the internet legally onto an iPod, that would be a problem. However, those aren't true. You can buy music on CD. You can get it on vinyl. You can buy it from places like eMusic.com (no, I have no affiliation other than having paid them for a month of service) and download it as DRM-free MP3s, which can happily be loaded onto Apple's iTunes and iPod.

The only part of the Apple solution that is 'locked' is the iTunes Music Store. And as we can see, everything available through there (with the exception of a few 'exclusive tracks!') is also available *elsewhere* - and there's a great deal of content that *isn't* available there. Furthermore, Apple makes no attempt to lock the iPod down from handling this other, DRM-free content (and if anyone whines 'it won't play format xxx' I slap them).

At that point, the thing that their 'lock' is protecting is their 'ease of use' consumer flow. In other words, we built this thing in such a way that the only people who can extract rents from downloading music to it (i.e. use DRM to make people pay money to download music to it) is us. If people want to invest a little energy and time, they can put music on it to their heart's content without having to cope with anybody's DRM, but if they want to accept the DRM and pay the cash for ease-of-use, they have to pay it to us.

That's what capitalism is all about. There's a perfectly good way onto the iPod for music that isn't from ITMS. If you don't want to pay Apple, don't. Buy a CD and rip it. Hell, record it yourself and load it. Your iPod will play it just fine. These bills have zip to do with protecting consumers, they have to do with protecting other businesses who want to extract their own rents in the DRM download market and want to freeload off the iPod's popularity. Screw 'em.

Re:Larger scope

[MustardMan]

The main difference is - Apple won't license FairPlay to anyone. They will build a little itunes app that can run on a phone, but it's heavily crippled. Let's see Creative or Sandisk get a license to use Apple's DRM - won't happen unless a government body forces them to.

However, with CSS, they will license the technology to just about anyone willing to spend the cash. That's why there are so many cheap no-name DVD players at Wal-Mart and such.

Re:Ignorant Government Idiots

[MustardMan]

uh... ANY lossy re-encode degrades quality. When you go from lossy format A to lossy format B, B chooses different bits to lose, and A has already lost some. Encoding to the CD itself loses quality.

Nevermind that if you rip to a lossless format, you're wasting tons of HD space and certainly not improving over the quality of your much-smaller AAC.

Re:Because you HAVE to buy from iTunes

[Overly Critical Guy]

It's that whole leveraging a monopoly thing.

No, it's not. What Microsoft did in the 90s was leveraging a monopoly, and I'll explain below.

Microsoft didn't hold a gun to your head and force you to use IE, either, but they got nailed for bundling it with windows. In a lot of ways, the Apple DRM is even more strong-arm than MS's inclusion of IE. But the Apple apologists always act like it's ok, because they are Apple.

You don't explain how exactly Apple's DRM is more strong-arm than Microsoft's inclusion of Internet Explorer. To use an iPod or iTunes, you don't even have to ever touch FairPlay, and just listen to your own MP3s. Microsoft's inclusion of Internet Explorer was targeted because it was a part of a series of behavior that included:

1.) Coercive OEM deals that threatened Windows license removals if manufacturers included rival software on new systems, including Netscape. Because of Windows dominance, a license removal would be commercial suicide.
2.) Vaporware announcements designed to lure customers away from buying existing competing products.
3.) Purposeful incompatibilities designed to make competing products appear as malfunctioning.

The big one is #1, and every time someone compares the iPod/iTunes tie-up to Microsoft's monopoly abuses of the 90s, I have to call them on it and point out Apple is doing absolutely no such thing. Apple is not calling up retail stores and telling them that if they don't remove all non-Apple music players from their shelves, Apple will no longer sell iPods through them. Apple doesn't really do anything about competing products. They, for the most part, completely ignore them and just let their own product design shine through.

But I'm not so gullible to think that the ipod/itunes lockin isn't a blatant abuse of the customer.

This is ridiculous. There is no abuse of customers going on. You're not forced to buy music from Apple, and if you do, it is of your own volition. You may also be disappointed to learn that if you buy an XBox 360, you can only play XBox games and not Playstation 2 games, even though they both use the same DVD format. Nobody is forcing the customer to do anything they don't want to do.

Apple has pretty much guaranteed I am going to keep downloading my music from bittorrent, by using an artificial extra layer to limit customer choice, and still have no effect on piracy.

You haven't explained how anybody's choice is being limited. You have free choice to buy music from Apple, with the implications that their service works only with other Apple products, as is their right. Or you have the free choice not to buy Apple's music, and just use MP3s you rip yourself. You also have the choice to buy any one of the myriad of competing music players that use PlaysForSure and other services. I fail to see what consumer choice is being limited here.

iTunes is specifically designed as part of Apple's vertical solution strategy, a medium for interacting with the iPod, and the iTunes Music Store specifically exists to provide music for people who have purchased the iPod. Apple is simply providing services to increase the value of an iPod to potential customers, just as they ship iLife only for Macs. It's adding value to a hardware purchase, just like when Nintendo releases first-party games to increase the value of a Nintendo hardware purchase. I may want to play New Super Mario Bros. on a PSP, but I'm not going to consider it monopoly abuse that I can't.

Somehow I don't think that's the issue.

[Kadin2048]

So if Apple were to agree to license out FairPlay to anyone willing to pay a "fair market value" for it, where the value of the license was equal to the number of FairPlay-compatible players the licensee planned on selling, times Apple's profit margin on an iPod, everyone would be happy? Because I'm pretty sure Apple would be okay with that. Say $75 USD a unit?

Apple is a company which exists to make money for its shareholders. I can guarantee you that they would license the FairPlay scheme to anyone who was willing to pay Apple what it's worth. Unfortunately, the problem here is that nobody -- least of all SanDisk and Creative -- can afford that.

Re:I'll be worried about this

[Golias]

Well, the PSP is made by a major movie company. Yet, oddly, you can still buy any UMD movie on other formats.

Likewise, you can buy the same albums you see in iTMS from your local CD store, or in some cases from other music download sites. So what, exactly, is the problem?

I used to buy a lot of music from iTMS, but since I've started using my computer as the main playback device on my living-room stereo, I've come to demand lossless formats. Besides, if you want the full album it's usually a better deal to hunt down a used CD.

(I now generally only buy iTMS songs if it's just one tune that I want, and I'm mostly going to be listening in the car or some other setting where I don't care about hi-fi. For example, I recently downloaded "All the Time in the World" by the Subdudes. It's a great summer crusin' song, but I don't give a crap about the rest of the album. So that amounts to about three or four songs a month, which is a fairly small fraction of my music purchases. If iTMS starts offering lossless formats, I might go back to buying large quantities from them, since it is a hell of a lot more convenient than driving to the store... but for now I'm mostly off the bandwagon.)

Ombudsman in reality a Microsoft Shill

[Been on TV]

We understand what the Norwegian Ombudsman and his department is saying, but in reality his is acting as a Microsoft shill. His department has never lifted a finger to make sure Microsoft DRM protected material is available to non-Microsoft customers in Norway.

Best example of this is the government, (mandatory) license financed "Norwegian Broadcasting Corporation" (public TV and radio) that publish all their video content in Microsoft DRM protected format. The Ombudsman has done nothing to ensure that this material truely is available to the public; only to Microsoft customers. There are other public institutions in Norway as well that publish Microsoft DRM protected content only.

If the ombudsman is eager to enforce Norwegian legislation in this area, he should first make sure the very government institutions and structure his department is a part of is in compliance with the law, before starting to go after one private company.

No, you don't, and few people do.

[Kadin2048]

...without the hassle of ripping a CD...

The only people unwilling to go through the "hassle" of ripping from a CD and who instead buy tracks at $0.99/song are people who have so much money to burn, they probably don't even know SanDisk or Creative exist, or that there are other MP3 players out there besides the iPod.

Seriously -- get a clue. The vast majority of songs on the vast majority of iPods in the world have been ripped from CDs (or downloaded illegally). The iTMS is a sideline, albeit a profitable one, but it's one that Apple would happily sacrifice in a particular market if the alternative in any way cut into their iPod hardware sales.

I don't know anyone who buys an iPod and then loads it up with music from the iTMS, or who bought an iPod because of iTMS. Who can afford to? By the time you filled that iPod up, it would be worth as much as a fairly decent, brand-new car. No, most people rip from CD, and it's dead easy to do. Frankly, sticking the CD in the drive and clicking on Import is easier, out of the box, than getting stuff from the iTMS is. (No signing up for an account, no entering your credit-card number, no high-speed internet required for good experience, etc.)

Nobody HAS to buy anything from iTMS. I'm sure there are lots and lots of people out there who can testify to the fact that they own iPods and have never bought anything from the iTMS. Personally, the only stuff I've bought was a few Audible books, and the free songs I've gotten from Pepsi caps. Even the people who download from the iTMS regularly, I'd wager, have far more songs on their computers from other sources than they do from the iTMS.

In short, you're vastly exaggerating the difficulty of ripping music from CD, and overstating the importance of the iTMS. If anything, the number of people out there with iPods is what will keep record companies from ever selling many un-rippable CDs, since so many people buy CDs and the first thing they do is stick them in their computers and rip them to their iPod.

If Apple offered a Napster-like music subscription ("all you can eat") service through the iTMS, then I would start to see your point of view: then you'd have a digital download service that was a practical source from which to fill up a HD-based music player. But at 99 cents a song, and much higher in some places in Europe, the iTMS certainly isn't it.

Re:No, you don't, and few people do.

[Fred_A]

I too don't understand what the "hassle" is...

Ripping a CD is just starting one of the many CD ripping utilities, clicking once (possibly twice depending on the utility), waiting for the disk to pop out and archiving it. That's what I do whenever I buy a new CD. Then I synced my ~/Media/sound/MP3 tree with my iRiver H320 (now lost —whine— waiting for a Creative replacement) every now and then.

Once every 3 months, I have to enter the track info myself because they don't seem to be on the freedb (or because I don't like the way they have been entered). Ok, that's sort of a minor hassle.

Maybe in Windows it's really horribly complicated but somehow I doubt it...

How is the phone not relevant?

[SuperKendall]

It seems to me the Motorola phone is the exception that proves my point. Apple is will to work with some device makers to allow playing on iTunes content outside of an iPod. They are just very picky who they allow to do so.

What's the dispute?

[WhiteWolf666]

I don't understand.

1. You don't have to buy an iPod. You can buy any music player you want; and there are plenty of vendors. Furthermore, you can use any of your music players with Windows or OS X.
2. You don't have to buy songs from iTunes. You can use any online service you want; and there are plenty of vendors. Unlike the OS scene, lower marketshare for Microsoft's online music store, or Real's online music store does != less content. Napster has 1.5 million pay-for songs on it. MSN music has millions, as does Rhapsody. Nobodies forcing you to use iTunes.
3. iTunes *will* rip MP3 or AAC without an iPod, on both Windows and OS X. iTunes *will* copy MP3s or AACs to _any_ USB block device-style MP3 player, without you having to own an iPod. However you purchase non-DRM MP3s or AACs, you can manage them with iTunes, and copy them to _any_ USB block style device; including iPods.
4. The iPod can be access without using iTunes. There's plenty of Linux tools, and a fair number of OS X and Windows tools. MP3s and/or AACs can be copied to your iPod.

The ONLY limitation on the iPod/iTunes combination is AACs purchased on iTunes protected by FairPlay. Now, if iTunes had exclusive marketing agreements with the RIAA regarding content, or if the iTunes music store was the only online music store out there, or if no one made MP3 players but Apple; then there would be an anti-trust argument. As it is, the consumer *is not hurt* in *any* way by iTunes/iPod. You can buy a Samsung MP3 player, and play the _same_ exact music from the MSN Music store as you would have purchased from iTunes. Better yet, if you purchased non-DRMd music, you could managed it via iTunes and play it on your Samsung MP3 player.

The iPod/iTunes combination is less of an anti-trust problem than Windows/Windows software, or Xbox360/Xbox games, or Blu-ray/BD-ROMS, and HD-DVD/HD-DVD disks. Out of all of these product "tie-ins", the online music market is the *only* one where you can purchase the same _exact_ content from multiple providers. It's actually a competitive landscape.

Context is very important for antitrust. It's not about principle; in no way does Apple DRM limit market availability for RIAA music, unless the RIAA decides to exclusively license Apple, which they _have not done_. Now, I do believe that DRM is bad, but antitrust legislation is not the correct way to resolve it.

Any argument you can come up with regarding iPod/iTunes applies 100 fold to Windows/Windows Media/Software/Music. Win32-only, or WMV only is a far bigger problem in terms of competition, and you can easily see that by comparing the online libraries of OS X content versus Win32 content.

That all being said, product-tie-ins is one of the weakest forms of monopoly abuse. I suspect that all this noise regarding iTunes/iPod is being generated by Microsoft funding. Nothing else really makes sense. For god sakes, Apple has even started to license FairPlay, in terms of usage on Motorola's phones; and don't forget that Apple is NOT vertically integrated with content providers (RIAA).

I'm all in favor of generalized legislation protecting the consumers right to reverse engineer DRM for us on . Should I be able to try and crack FairPlay in order to play DRMd AACs on my Rio Karma? Sure. It's retarded that reverse engineering content you've paid for for usage on a hardware you own is illegal. But legally busting Apple without going after Microsoft/Sony/Real/AACS/CSS/HDMI ? What fucking sense does that make?