Apple battles Scandinavian competition zealots

Stan Beer
Wednesday, 02 August 2006 20:24

Opinion and Analysis

Apple wants the right to restrict the music it sells through its online store iTunes to its music players the iPods. Norway, Sweden and Denmark want to force Apple to allow the music it sells to play on rival players. This has become a case of regulatory zealots misunderstanding the concept of free enterprise.

For some reason, there seems to be a strong movement underfoot in the governments of well to do parts of Europe, such as France and the Scandinavian countries, to interfere with the business models of successful companies. They do this in the name of competition and protecting innovation but in reality it has nothing to do with either of those two things.

Over the years, Apple has been one of the most innovative technology companies in the world. The current period is one of the most innovative and succesful times in its history.

Through its own enterprise and inventiveness, Apple has not only founded and built up a unique business in the audio visual entertainment devices industry, it has single-handedly helped to stamp out online music piracy. In the process, its established its own intellectual property, products and business model.

Apple's business model is to sell downloaded music cheaply online and make that music available to be played on computers, CD and the iPod portable music player.

Consumers all over the world liked what they saw, downloaded songs by the hundreds of millions and bought tens of millions of iPods. The iPods are where Apple makes its money - not iTunes.

Despite the fact that most consumers have no problem with Apple's business model, Scandinavian and French regulators do. Apple's popularity and growing dominance in the European market scares them. Thus, they're demanding that Apple change the business model that has made the company successful. They want Apple to allow its competitors to walk in and enjoy the fruits of its labour and take business away from the company.

Apparently, competition in France and Scandinavia means giving your competitors a free ride and voluntarily making yourself less successful.

Naturally Apple would not like to lose these high net worth markets but if the company is backed into a corner it would have no choice but to shut down iTunes in those countries. However, if this what needs to be done, the company will be forced to do it and leave the governments of those countries to face the hordes of angry consumers who wished that they would stick their beaks in areas that should concern them.