Championing “openness” is in vogue now, be it net neutrality (in the telecom sense) or what is occurring in France with its online copyright bill that would mandate the sharing of proprietary digital rights management systems (call it DRM Neutrality?). But do we really want openness mandated by government? What happens to the freedom to innovate via closed systems?
Being “open” sounds great in theory. But it seems to me that the notion of openness has been hijacked by competitors (and those politicians that receive Dollars or Euros from these competitors) of those successful companies that employ closed systems.
Why be pro-closed? Well, it is often closed systems that can deliver greater value to consumers and society. One of the benefits of closed systems is to take what appears to be separate parts and bundle them together into one easy to consume package.
Let me state the obvious. iTunes was designed primarily to play Apple’s proprietary, rights restricted media and to interoperate with Apple’s own iPod hardware device:and consumers love it! Unfortunately, many regulators overlook the benefits of bundling and tying products together. This was a subject of a recent article of mine.
Innovation prospers when we allow firms to engage in different cost recovery strategies. Check out this history of iPod–Apple has clearly been innovative to the benefit of consumers.
But we know that this really isn’t about consumers – in Europe, competition law is about harm to competitors whereas in the U.S. the legal standard refers to consumer harm. Sometimes, though, helping competitors in the name of competition may hurt consumers. How is iTunes going to convince the music and movie industries to license it content if there’s no assurance that Apple can make of down-the-line protection?
Interestingly, the French law addresses copyright, not competition law. According to a Reuters news article, a French politician said that this modification to copyright law “should prevent the emergence of a monopoly in the supply of online culture.” Why effectuate competition law through copyright law? If there is anticompetitive behavior, it seems to me that the more principled route is through direct enforcement of antitrust law, not broad-strokes legislation in a different (albeit related) area of the law.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
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