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Can the EU Make Apple, Adobe, and Others Interoperate?

07.05.2010
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We haven't heard much from the European Commission and its current VP Neelie Kroes since the Oracle/Sun-MySQL fiasco, but quietly Kroes is preparing an initiative that could bring major changes to the IT industry.  Open Source advocate Florian Mueller wrote four blog posts relating to the new European interoperability law that would, if enacted, force all "significant market players" to provide access to interfaces and data formats.  Pricing constraints are also "likely" according to Kroes.  

Kroes stated her objective for this bill: "Any kind of IT product should be able to communicate with any type of service in the future."  Mueller says that Kroes' objective could be viewed as similar to the Microsoft case where the company was ordered to provide the information necessary for competing networking software to interact fully with Windows desktops and servers.

The EU deals with four main areas of competition: cartels, mergers, state aid, and the abuse of a dominant market position.  Currently, the EU can only take action if a company clearly dominates a market and uses that position to shut out competitors (e.g. refusing to disclose technical interoperability information or wielding patents to stop all interoperability engineering).  Courts rarely will consider some very large companies to be market dominators.  However, this law would presumably lower the bar to "significant player".  Mueller says that this would force companies like Oracle (which he considers dominant) and Apple cease any hindrances to technical interoperability.

"In the total worldwide market for mobile phones, Apple would probably not be considered dominant because Nokia still sells more units, the collective volume of Android-based phones is quite high, and RIM (BlackBerry) is also strong. But in a more narrowly defined subset of the market, Apple's market share could be considered to be much higher. Also, Apple could be considered dominant as an online music distributor or as a distributor of iPhone/iPad applications...

There should be a general obligation affecting not only dominant players but also the much wider circle of "significant market players", many of whom could also use their intellectual property rights (especially patents) to limit choice and stifle innovation." --Florian Mueller


Although the finer points of this initiative are not fully clear, the supporters basically want to "ensure that companies don't monopolize their data formats and interfaces," says Mueller.  The pricing constraints that Kroes refers to in her mentioning of the initiative likely has to do with the royalties on interoperability patents.  

The process of submitting the bill could take some years, proposals in the bill may be decided this year.   If the initiative seems feasible, then the lawmaking process would begin in 2012.

Do you think this legislation is good for software?  Or does it go too far?

 

Comments

Jeroen Wenting replied on Wed, 2010/07/07 - 3:56am

I've not seen any EU intervention in the market for the last decade at least that didn't do a lot more harm than good. The EU is the ultimate of government control over everyday life (corporate and private) gone berserk, regulations for the sake of regulating, and placing restrictions on non-EU companies for no other reason than to make it harder if not impossible for them to do business in the EU, allowing EU companies with inferior or overpriced products to force those onto EU customers without those pesky foreigners coming in with their superior products and forcing the EU company to adapt or go under.
I'm not talking about any specific case here, but that's the general trend and the overal gameplan.

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