Friday, April 27, 2007

French law could sever iPod-iTunes

MercuryNews.com published French law could sever iPod-iTunes link on September 27, 2006. In the article, the newly passed internet copyright law in France enforces Apple Computer Inc. to make its iPod player and iTunes online store compatible with rival offerings. The law was crafted as an effort to crack down piracy and level the market field for smaller rivals of Apple and Sony Corp. Currently music bought on iTunes can only be played in Apple's iPod. The original French law requires companies to share technical data with any rivals. However, Apple protested that opening its formats would further encourage pirates. As a result, the law was being left up to government regulators to decide on a case-by case basis, it also allows companies to seek compensation for sharing their technologies. Apple indicated that it was not willing to open its iTunes downloads to rival portable music players even with the promise of compensation. Apple may dodge the technology-sharing demand by striking individual deals with record labels and artists. Therefore, the law was expected to have little immediate effect.

In the article, Apple computer Inc. don’t allow iPod player and iTunes online store compatible with rival offerings even France enforces it. France is a host government. France government should install rules to regulate international business. Apple should comply when the France regulations do not unduly constrain their preferred mode of operations, when benefits are sufficiently attractive despite the France regulations or when Apple cannot alter the regulations with their advantage. This article demonstrates Apple should share their technologies with their rivals. Apple has a strong bargaining position in France when they control certain type of assets include: Technology, marketing expertise, export performance, product diversity, and the value of FDI. Apple has high technology to produce iPod is deemed to the countries’ economic development.

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