Thomas W. Hazlett, a professor of law and economics at George Mason University, has written an editorial for the Financial Times in which he implored Europe’s anti-trust regulators to “listen to reason” when dealing with iTunes.
“While the [new French] law allows Apple to retain iTunes exclusivity if it gains copyright permission, this escape hatch could prove treacherous,” he wrote. “Record companies want to renegotiate their iTunes deals upwards, and regulation sends its own signal.”
Mr. Hazlett noted that the market has spoken in terms of the type of music system it prefers. “Regulators ignore what is efficient, as testified to by the most ruthless of Apple’s rivals,” he explained. “Microsoft has been flailing at the iTunes market since it launched, providing software for iPod competitors such as Sony and Samsung. The platform is open to independent device makers near and far — just the type of market structure that makes regulators feel warm and fuzzy. Yet customers have given it scarcely a listen.”
He added: “Voting with their money, customers prefer Apple’s package. Were Apple to truly exploit its customers, its market would be ripe for an upstart. Microsoft is, let us put this calmly, a well-equipped upstart. Their counter iPod offerings — giving customers a choice of hardware — should rock.”
The columnist concluded: “The French law aims to disrupt a process that was enhancing the wealth of nations. From the rubble of file sharing, with its Pirates of the Caribbean business model and its ‘junkyard’ user experience, emerged a spiffy iTunes marketplace where songs and their listeners embrace, 99 cents a hug.
“The format brought artists together with users, ending their conflict and forming a virtuous circle of co-operation. A rival field of dreams is now being built by the Microsofts, Sonys, Dells, Amazons and T-Mobiles, stomachs growling and each eager to devour a little Apple. Antitrust regulators should stand back and let Apple feast or be eaten.”