iPod is not anticompetitive, Virgin told

By | November 10, 2004 at 12:00 AM

The French Competition Council has dismissed the case brought by Virgin’s French arm, Virginmega.fr, against Apple for alleged abuse of market dominance. The French download site wanted to force Cupertino to lift the lid on its DRM, to enable Virgin to make its downloads compatible with the iPod.

Apple has always refused to open up its proprietary Fairplay – the system DRM that allows songs from the iTunes store to only be played on iPods – to competitors. Virginmega.fr, on the other hand, has opted for Microsoft’s DRM – which means its downloads can’t be played on iPods at all.

Due to a lack of “sufficiently convincing elements”, the Council rejected Virgin’s case and call for action. Its members noted that “access to the Fairplay DRM isn’t indispensable to the development of legal platforms for the downloading of online music.” According to them, the market is “in rapid expansion… and very dynamic, in France as well as in other European countries and the US”.

The Council did however note that lack of interoperability between different download sites and music players is “a disadvantage for consumers” but added “situations like this recur in sectors linked to information technology,” and weren’t necessarily affected by competition law.

Furthermore, it also highlighted that “the link in causality between the Apple’s possibly dominant position in the hard disc music player market and the competition situation with regard to the download market isn’t established.”

According to its analysis “various models of music player, with or without hard disc, that integrate with Microsoft’s DRM system and are compatible with Virginmega.fr’s platform are appearing on the French market”, adding that players with a hard disc, like the iPod “are and will remain dominant for a long time” over players with Flash memory.

Virgin and Apple declined to comment.

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