Apple, Sony sued over DRM in France

[James Fee]

<div class='os_post_top_link'><a href='http://news.com.com/Apple%2C+Sony+sued+over+DRM+in+France/2100-1027_3-5575417.html?tag=nefd.top' target='_blank'>http://news.com.com/Apple%2C+Sony+sued+over+DRM+in+France/2100-1027_3-5575417.html?tag=nefd.top</a><br /><br /></div><i>" French consumer association Union Federale des Consommateurs-Que Choisir has launched legal action over the two companies' proprietary music formats, claiming that the respective digital rights management used by both Sony and Apple, which prevent songs bought from their online music shops from being played on other manufacturers' media players, is limiting consumers' choice. The consumer group announced that it would take legal action against the pair after conducting interoperability tests last year between a selection of download services and digital music players. The group criticized the two companies' lack of interoperable DRM. "</i><br /><br />Well it was only a matter of time before this happened. But lets be honest, nothing will come of this. Incompatible formats have been around since <a href="http://ei.cs.vt.edu/~history/Babbage.html">Babbage's</a> time and will be for many more years to come. Let the marketplace decide what formats people will use and in the end that is better for consumers. Legislating compatibility never works.

[Felix Torres]

Not sure how far they'll get with interoperability as their accusation.
Now *tying* just might stick...
...on Apple, anyway...
Sony's stuff is still essentially irrelevant in the marketplace, no?
(You have to be a player before you can be sued...)

But Apple, well, that's a different story...
If you buy their hype of market dominance then they are ripe for calling to account.

But realistically they should not be sued into opening up "Fairplay".

Why do them any favors? :twisted:

[Crocuta]

Legislating compatibility never works.

I'm not particularly supportive of this lawsuit, but I couldn't help commenting on this statement. Just consider that early in the mobile phone industry, the EU legislated GSM as the technology all companies would use. Now, you can go to any of over 120 countries in the world (excluding the US), and use your standard GSM phone right off the plane. You can buy a GSM phone to use with one company, then change companies simply by changing out the SIM card. I used to rent a SIM card when I spent time in South Africa, but still used my same phone (with all the numbers and customized features still intact.) Contrast that to the totally screwed up US situation in which you have a whole slew of different technologies competing and driving up costs. You can't even use the same phone for two different companies or go buy the phone you really like then sign up for the company you really like.

So while I wouldn't say we should always do so, sometimes legislating compatibility does work and sometimes not doing it leads to failure. Anyone who's used mobile phone both in the US and abroad knows just what I mean.

[James Fee]

So while I wouldn't say we should always do so, sometimes legislating compatibility does work and sometimes not doing it leads to failure. Anyone who's used mobile phone both in the US and abroad knows just what I mean.True, but if that means haveing to give up my CDMA phone, no thanks. Europe can keep their GSM phones for all I care. :p

Just because you can force people to use one format, doesn't mean that it it good for consumers. As I said above, letting the marketplace decide is best for consumers. IF GSM really is better than other formats it will win out in the long run.

[Felix Torres]

Just because you can force people to use one format, doesn't mean that it it good for consumers. As I said above, letting the marketplace decide is best for consumers. IF GSM really is better than other formats it will win out in the long run.

All true.

But you do have to understand that present day europeans don't believe in market forces; they believe in "dirigisme" and having the government choose winners and losers. Preferably locals. :-)

This is an old issue: european antitrust law is *not* about what is good for consumers but rather what is good for competitors. Corporations, not individuals. By definition their laws assume consumers do *not* know what is best for them.

Different strokes for different folks and different social contracts on both sides of the pond. On this side, we're willing to put up with a bit of risk in life.

[Crocuta]

So while I wouldn't say we should always do so, sometimes legislating compatibility does work and sometimes not doing it leads to failure. Anyone who's used mobile phone both in the US and abroad knows just what I mean.True, but if that means haveing to give up my CDMA phone, no thanks. Europe can keep their GSM phones for all I care. :p

Just because you can force people to use one format, doesn't mean that it it good for consumers. As I said above, letting the marketplace decide is best for consumers. IF GSM really is better than other formats it will win out in the long run.

You're confusing two concepts. Competition between firms is good for consumers. Competition between standards is not. One of the major assumptions underlying the efficiency of competition is that firms and technologies have free entry and exit in markets. Technologies that have high up-front capital costs and long investment payback times are exceptionally inefficient at being vetted through a competitive marketplace.

Imagine if the US had five different electrical systems. Some places used 120v/60cycle and others used 240v/50cycles while still others used 200v/50 cycles and so on. And this isn't even a state-by-state thing but just scattered around as different companies formed. Given the immense investment in infrastructure necessary to bring electricity to all households and places of business, having different systems like this would hold prices high, result in significant costs from lost economies of scale and would cost consumers extra time and effort as they tried to keep straight what they could and could not buy to operate on their system.

While it may be fun to snipe at Europeans about competition (right now they're kicking our butts in a very competitive world marketplace), the simple truth is that you benefit every day from these same types of decisions in dozens of areas of your life. Your electricity standard, your television standard, your standard for auto fuel, your standard for radio frequencies and broadcast modulation, your standard for location via GPS, even which side of the road you drive on... are all standards chosen by our government for the benefit of consumers. You'd never have seen HDTV if the FCC hadn't decided it for you, and if the market had done it on its own, moving from Atlanta to Boston might have meant having to buy a new TV.

This idea of saying that all competition in everything is better for consumers would be fine in economics 101 where you live in a two-good world with a dozen unrealistic assumptions constraining behavior, but the real world is different. Real economics depends on which assumptions hold and which don't. You may debate whether you'd prefer CDMA or GSM on a technical basis, but the simple truth is that you'd pay less money for better service if all mobile phone companies in the US used the same standard, and even less still if everyone around the world used a single standard. We're five years behind the rest of the world in mobile phone technology and it's because of our lack of standards. 'Can you hear me now?' People in most countries wouldn't even understand what that commercial is about.

[James Fee]

You're confusing two concepts. Competition between firms is good for consumers. Competition between standards is not. One of the major assumptions underlying the efficiency of competition is that firms and technologies have free entry and exit in markets. Technologies that have high up-front capital costs and long investment payback times are exceptionally inefficient at being vetted through a competitive marketplace.So where would the innovation come from? Forcing companies to use a format that politicians decide is the best does no one any good.
Imagine if the US had five different electrical systems. Some places used 120v/60cycle and others used 240v/50cycles while still others used 200v/50 cycles and so on. And this isn't even a state-by-state thing but just scattered around as different companies formed. Given the immense investment in infrastructure necessary to bring electricity to all households and places of business, having different systems like this would hold prices high, result in significant costs from lost economies of scale and would cost consumers extra time and effort as they tried to keep straight what they could and could not buy to operate on their system.Actually at first they did have many different types of electricity. Some cities had AC and others had DC. AC ended up beating out DC because between the innovation of Tesla and Westinghouse, it was figured out that it could transport current much farther and than DC could. The only reason 60 hertz was used in the U.S. was because Tesla determined that 60 hertz as the lowest frequency that would not cause street lighting to flicker visibly. It wasn't until the 50s that appliances required electrical companies to standardize on the 120v/60hertz that consumers wanted. At no time did the U.S. government ever force companies to standardize on 120v/60hertz. It was the consumers who did that.
While it may be fun to snipe at Europeans about competition (right now they're kicking our butts in a very competitive world marketplace), the simple truth is that you benefit every day from these same types of decisions in dozens of areas of your life. Your electricity standard, your television standard, your standard for auto fuel, your standard for radio frequencies and broadcast modulation, your standard for location via GPS, even which side of the road you drive on... are all standards chosen by our government for the benefit of consumers. You'd never have seen HDTV if the FCC hadn't decided it for you, and if the market had done it on its own, moving from Atlanta to Boston might have meant having to buy a new TV.In the end these standards where all decided by consumers. In unsure of how the Europeans are "kicking our butts" on regulation is a good thing for consumers. :?:
This idea of saying that all competition in everything is better for consumers would be fine in economics 101 where you live in a two-good world with a dozen unrealistic assumptions constraining behavior, but the real world is different.Again I'm not talking about economics 101 here. Plain facts are that most standards are chosen by consumers. In the digital world this has changed as standards are proposed before they are generally accepted as a standard the same way they were in the 20th century, but it doesn't change a thing. Consumers will choose the formats that work better for them, not the ones that have a sticker on the box. Real economics depends on which assumptions hold and which don't. You may debate whether you'd prefer CDMA or GSM on a technical basis, but the simple truth is that you'd pay less money for better service if all mobile phone companies in the US used the same standard, and even less still if everyone around the world used a single standard. We're five years behind the rest of the world in mobile phone technology and it's because of our lack of standards. 'Can you hear me now?' People in most countries wouldn't even understand what that commercial is about.I don't follow. The fact that I can't use my phone in Europe makes it more expensive? That couldn't be any farther from the truth. GSM or CDMA means nothing to consumers in the U.S. because it just doesn't matter. Cell phone service to the majority of consumers boils down to customer service, not the fact that they could use it in France. I can switch between GSM or CDMA all I wish and don't have to pay a dime for a phone. As for being behind on cell phone technology, I just dont' buy that. Again consumers don't really care that they can download video on their phones here and if that was really important, at least Verizon could accomplish it. But in the end we consider our cell phones as cell phones (well maybe the occasional upskirt photo), not PDAs.

[Felix Torres]

Committee-defined standards serve the needs of corporations, not consumers.
Simple test: do you think any corporation would allow a committee-generated standard to mandate a feature they themselves cannot profitably deliver? At a minimum, they'll dither and stall until they can cancel out the competitors' advantage.
On the other side of the divide; de-facto standards are the result of darwinian competition between vendors.
Which means some win and some *lose*.
Which is what committee-based euro-style standards are supposed to achieve; its not about delivering to consumers the best product for the lowest price; it is about minimizing the risk to manufacturers by ensuring they can't lose.

In both electricity *and* telephones North America had multiple standards, well into the 50's. In the 20's and 30's, in some cities, companies had multiple phones connected to competing networks. It was only *after* the market spoke, that a unified standard emerged. And the anti-trust lawsuits started shortly afterwards.
For that matter, european committee-standards peddling only goes so far; all the preaching over unified standard ends when local "needs" start getting trampled; to this day, europe has multiple TV standards to ensure the purity of local cultural content, no? SECAM vs PAL vs the various satellite broadcast standards...

What are the odds the EU will adopt the NorthAM ATSC HD standards?
Howsabout zero, zilch, nada?
Cause doing so would lead to the commoditization of the market and commoditization is the consumer's best friend and the corporation's enemy.

Consumer electronics, however, are all about commoditization.
CD standards existed for ten years before asian manufacturers drove the price down to where the average consumer would want to buy one. Once that happened, northam went from vynil to cd in two years flat.
DVD standards existed for years but what made the market explode was Time-Warner (a prime mover behind the tech and owner of a good chunk of the patents behind it) decided to price DVDs to sell instead of to rent; $20 instead of $50.

A-priori standards posturing is all about hiding corporate and nationalistic political agendas; the chinese recent efforts to define wireless standards has nothing to do with technical merit and everything to do with protecting local manufacturers from more advanced foreign suppliers; ditto with GSM. At the time GSZM was defined, Qualcome had a more flexible, more powerful solution that was licensed at reasonable terms.

But it was a non-euro solution to a committe was convened to offer a local alternative, just like PAL and SECAM were defined as alternatives to NTSC to protect local manufacturers.
Its all about politics, not about technology.

And above all, it is *not* about consumer's interests.
Everything else is smoke and mirrors and posturing.

[Crocuta]

Sorry guys, I'm going to have to cry 'uncle' here. I just don't have the time to continue the discussion. There's a solid body of economic literature that speaks to this issue, but things are way too busy with my work right now for me to dig into it for the sake of a casual debate.