The complaint was filed in June and concerned software, known as
Fairplay, which controls the type of music that can be played on
the iPod.
To date Apple has been zealous in keeping it secret –
effectively restricting the downloaded music playable on the device
to that which can be purchased from Apple's iTunes – and has
refused to license the technology to other on-line digital music
retailers.
According to reports, the Conseil de la Concurrence did not find
this refusal to be in breach of competition rules because, while
the Conseil could not rule out the possibility that Apple was
dominant in the market for the supply of portable music players,
access to the Fairplay software was not essential in order to
support the development of the on-line download market.
The market contains other music players using Microsoft's DRM
system, which Virgin Mega's site is currently compatible with, and
consumers can access Virgin Mega's downloads through these, said
the Conseil.
Consumers could also get round the iPod interoperability issue
by burning the music onto CD, it added.
According to Nicholas Francis of consultancy firm Reckon, which
specialises in the interactions between markets and regulatory
institutions, the key to the decision seems to be how music
downloads are used.
"In effect," said Francis, "the Conseil found that competition
in the supply of music downloads currently takes a broad form, in
which suppliers of content in different secured formats compete
against each other to reach customers who are not, on the whole,
restricted to any one particular format."
"In the future," he warned, "the relative importance of
transfers to portable music players can be expected to increase as
penetration of devices such as the iPod rises. Going forward, one
might be able to identify separate relevant markets for the supply
of music downloads that are to be used on portable music players.
In that case, the relevant customers could well be tied to
particular DRM technologies."
