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Palm's WebOS 'Media Sync' iTunes Integration Revisited

I arrived in San Francisco this afternoon on my trip to WWDC 2009. The weather is great, I’m very jet-lagged after the flight(s) from Melbourne to SF, and I’ve finally had a chance to respond to the ongoing debate on Palm’s WebOS ‘Media Sync’ iTunes integration.

In response to my last post, Gruber wrote:

I disagree with Forge that an analogy to Microsoft and SMB is apt. Being the clear market leader doesn’t necessarily mean that Apple holds a monopoly, a term which has been thrown around far too loosely in the aftermath of Microsoft’s court cases in the U.S. and E.U. Many markets have a clear leader, but very few market leaders hold a monopoly.

The EU doesn’t refer to Microsoft as having a ‘monopoly’ in most of the literature regarding the recent EU Microsoft Antitrust Case, they refer to the abuse of a dominant market position. The fact that the iPod doesn’t have a technical monopoly doesn’t mean that they don’t have what the EU would consider a dominant market position, which is apparently enough to pursue antitrust proceedings.

What monopoly does Apple hold, specifically? A monopoly in “portable media players” wouldn’t seem relevant — it is iTunes, the Mac and Windows software, that WebOS interfaces with, not iPods. Does iTunes (not the store, but the desktop app) constitute a monopoly? I would say no, not even close.

I would argue that when you buy an iPod, you aren’t just buying the hardware. You are buying the functionality that you get from the combination of an iPod and iTunes. And an iPod with iTunes is indisputably the market dominant combination of portable media player and media library software.

Does the fact that Apple gives away the iTunes part of that combination for free mean that iTunes itself is immune from anti-competitive regulation?

From another angle, it would be hard to argue that iTunes doesn’t have a monopoly (or at the very least, a dominant market position) in music playing software itself on OS X. Microsoft’s recent brush with the EU was related to their bundling of Windows Media Player with Windows - it isn’t hard to see how the EU could potentially take issue with Apple aggressively breaking compatibility between iTunes and 3rd party players.

I’m not a lawyer, so I have no idea of the legal validity of these arguments, but I don’t think the issue is as black and white as many people seem to think.

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