Bad News for Apple

by on January 24, 2007 · 14 comments

From the Financial Times:

Apple was dealt a blow in Europe on Wednesday when Norway’s powerful consumer ombudsman ruled that its iTunes online music store was illegal because it did not allow downloaded songs to be played on rival technology companies’ devices.

The decision is the first time any jurisdiction has concluded iTunes breaks its consumer protection laws and could prompt other European countries to review the situation.

The ombudsman has set a deadline of October 1 for the Apple to make its codes available to other technology companies so that it abides by Norwegian law. If it fails to do so, it will be taken to court, fined and eventually closed down.

Apple, whose iTunes dominates the legal download market, has its proprietory system Fairplay. Songs and tunes downloaded through iTunes are designed to work with Apple’s MP3 player iPod, but cannot be played on rival devices.

Although I applaud the goal of increasing competition in the legal download market, I don’t think having Norwegian bureaucrats overseeing Apple’s software development process is a good solution. But as I’ve pointed out before: this should be a surprise. Regulatory schemes like the DMCA (and the EUCD in Europe) frequently have unintended consequences. And often, those unintended consequences are often cited as a justification for enacting more regulations to mitigate the harms caused by the previous round of regulation.

What we need, instead, is deregulation: Congress should repeal the anti-circumvention provisions of the DMCA, so that companies are free to reverse-engineer Apple’s products in order to build compatible devices.

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