Apple and Antitrust
by Tony Kontzer
I'm not the type to say "I told you so," especially when I don't exactly have reason to say it. But in the case of what appears to be an antitrust storm brewing over Apple's domination of the online music market, I'm darn close to having that reason.
Recently, I chimed in about Adobe's admittedly biased position that Apple plays less than fair in the mobile apps market, where it's effectively banned Adobe's Flash technology from running on iPhones or iPads, thus sending apps-makers scurrying for workarounds. I didn't even bother to get into the maelstrom of Apple's digital music strategy, a dictatorial approach requiring iPod owners to use the unwieldy iTunes software to purchase and download their favorite songs.
Turns out, however, that someone else has had an eye on that--none other than U.S. Justice Department, the same folks who spent years and millions of dollars doggedly investigating the anti-competitive practices of a similarly arrogant Microsoft.
Clearly, the digital music market is not an immediate IT concern. But this latest Apple development must strike a chord with Microsoft's many rivals, all of whom quietly (or not so quietly) cheered the Justice Department's efforts to get Bill Gates & Co. to stop bundling its own browser, Internet Explorer, with its venerable line of Windows operating systems, a practice that gave it an unfair advantage over competing browsers.
Much of the focus of the Justice Department's budding Apple inquiry apparently focuses on reports that Apple had blackmailed music labels not to give rival Amazon.com one-day exclusives on new music hitting the market by threatening to not market those songs once they appeared on iTunes. A different tactic than Microsoft's embedding of its own browser, to be sure, but driven by similar intentions: To preserve its dominant market position through bullying.
My message to IT folks is this: Don't underestimate the impact this case would have on the future of IT, should the Justice Department decide to pursue it. Not only would a successful campaign to get Apple to loosen its grip further vilify anti-competitive business practices in the technology world, it would also set a precedent that will impact mobile device users for years.
With corporate employees increasingly relying on mobile devices to stay connected and perform business tasks while on the go, the evolution of the mobile apps market is absolutely of concern to IT leaders. And don't think for a moment that an antitrust case against Apple wouldn't eventually touch upon its conduct in the mobile apps market, because it will.
As I wrote at the conclusion of my aforementioned post about the apps market, eventually, Apple will either have to learn to play nice in digital music, or it will pay a large price for its greed: It will be unable to shed its label as The New Microsoft, which will no doubt cause Steve Jobs to swallow his tongue. And then maybe I'll really have compelling reason to say, "I told you so."