Recently, a French effort originally designed to "open up" Apple's iTunes software to rival MP3 players went into effect. Because of an intervention from the Conseil Constitutionnel, and some aggressive lobbying, the law's impact is in doubt. Rather than promoting interoperability, it may well end up thwarting it by hampering reverse engineering.
There has been some smart legal commentary on these developments already (here, here, and here). . . and I hope someone is thinking about whether the French court's angle on IP "takings" might create a constitutionalized "ratchet effect" of IP expansion here. But for now, I'd like to focus a bit on the policy here...particularly on Professor Wright's and Hazlett's argument that government intervention is unnecessary because rival services are likely to develop without it. I just want to challenge their rationale for diversity in services here, evoking hermeneutical economics (a narrative approach which their George Mason colleague Tyler Cowen has used in several enlightening and important works).
The Phenomenology of Digital Music Consumption
Let's stipulate that, in Hazlett's words, "rival field[s] of dreams [are] now being built by the Microsofts, Sonys, Dells, Amazons and T-Mobiles" to displace the iTunes/iPod juggernaut. Let's say each of them develops proprietary DRMs that prevent interoperability, and runs off to negotiate deals with the major labels. Do you really relish a world where you'll be trying to figure out which digital music player a) has the best software and b) has negotiated the best deals with the major labels? What if your preferred player is all of a sudden cut off by its label? (Echoes of Medicare Part D, anyone?). And what if one major hardware player bought up one or two of the major labels as subsidiaries? In other words, how far can vertical integration go before some alarm bells start going off?
Frankly, rather than rival fields of dreams, I can foresee rival "Biosphere 2" projects arising out of this type of no-holds-barred, verticalized competition...rather like the decay of pressPlay and musicNet. Just as one ought to doubt the ability of any team of scientists to figure out how life should play out in a "closed system," I doubt any one business's ability to plan out perfectly all my aural needs once I buy into its system. I just can't see why the competitive strategy of Apple (or any dominant player) should hinge on this type of hardware-software integration. I hope to research the situation in some Asian countries (where I believe another brand is dominant) to see what's happening there (particularly in S. Korea, which is way ahead of us re all sorts of electronics).