“The French take pride in their revolutions, which are usually hard to miss — mass uprisings, heads rolling and such. So, with the scent of tear gas in the air this past month from the giant protests against a youth labor law, it was easy to overlook the French National Assembly’s approval of a bill that would require Apple Computer to crack open the software codes of its iTunes music store and let the files work on players other than the iPod,” Austan Goolsbee writes for The New York Times. “While seemingly minor, the move is actually rather startling and has left many experts wondering (as ever): What has possessed the French?”
“In their fervor to free listeners from the shackles of their iPods, French politicians have abandoned one of the guiding principles of antitrust economics: penalize companies that harm consumers, not the ones that succeed by building better products,” Goolsbee writes. “Antitrust authorities normally follow well-established procedures when considering such moves. They weigh the loss to consumers of not being able to play iTunes songs on other players against the damage that forcing iTunes to open might have on innovation. France’s own Competition Council did a similar analysis in 2004 and ruled that Apple’s refusal to share the iTunes codes did not harm consumers. The legislature paid no mind to such analysis and seems not to have considered innovation at all. Therein lies the danger.”
“iTunes keeps getting better. Apple has added video capability, celebrity play lists, exclusive music, the ability to convert home movies into iPod format, and many other features — all free,” Goolsbee writes. “If the French gave away the codes, Apple would lose much of its rationale for improving iTunes. Right now, after the royalty payment to the label (around 65 cents) and the processing fee to the credit card company (as high as 23 cents), not to mention other costs, Apple’s margin on 99-cent music is thin. Yet it continues to add free features to iTunes because it helps sell iPods. Opening the codes threatens that link. Apple would need to pay for iTunes features with profits from iTunes itself. Prices would rise. Innovation would slow.”
“Usually, rich countries don’t meddle with others’ intellectual property because they fear retaliation. So why don’t the French fear retaliation now? One reason may be that they have concluded France will never really compete. If the Internet will always have an American accent, why not go after it? Sometimes, the red flag of revolution is surprisingly hard to distinguish from the white flag of surrender,” Goolsbee writes. “The fate of France’s budding intellectual property revolution now rests with the French Senate, which will decide in the coming days whether to proceed. Before declaring pre-emptive war on iTunes, however, perhaps the French would do best to remember a lesson from 1789. Sometimes the very people calling for revolution are the ones who end up losing their heads.”
Full article with much more and highly recommended here.
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French Trade Minister: Apple’s iTunes must play fair in French music market – April 14, 2006
JP Morgan: French DRM law will have limited impact on Apple Computer – March 28, 2006
Dvorak: What the French got right with proposed DRM law – March 28, 2006
Will Apple’s Steve Jobs bid France adieu? – March 22, 2006
Wired’s Kahney: Proposed French copyright protection law a good thing for consumers in the long run – March 22, 2006
Apple calls proposed French DRM law ‘state-sponsored piracy,’ predicts iPod sales increase – March 21, 2006
French National Assembly approves digital copyright bill; could affect Apple’s FairPlay DRM – March 21, 2006