Who Will Cave In?

DRM has been a controversial issue in the U.S. news lately, but could Europe finally be the deciding factor? Apple struggles daily to separate itself from its competition- Microsoft. Each Apple commercial makes a point to see that viewers are aware that Apple is far superior to Microsoft. Too bad it is not working for European viewers who are pinpointing Apple as the next corporate enemy, in company with Microsoft.

Itunes’ once powerful reign over Europe is slacking, and the cause is said to be the DRM on iTunes downloads. In Norway Apple’s DRM is under investigation due to its possible violation of Norwegian law. Other countries performing investigations include Finland, France, Sweden, Denmark, and Germany. If the results prove a violation of law, there could be a big change in Apple’s business.

The case is likened to that against Microsoft, accusing Microsoft of preventing competition through bundling media players and web browsers in Windows. Despite U.S. claims, it was Europe who convinced Microsoft to unbundle the products, and it could be Europe once again that convinces Jobs to remove DRM from Apple Downloads. In Apple’s case the bundling would be iTunes and the iPod, where iTunes can only be played on iPods, and iPods can only play iTunes or DRM free music.

If Apple fails to comply, it could be affected by its loss of 70% of the digital market in Europe. Just with European sales, Apple showed a 30% increase last year. Whether the trend will continue though, is doubtful. With 98% of people against DRM, and recent protest groups, the sales could start to level off. A group called Defective by Design pickets Apple stores in London, and is involving Bono and Parliament in supporting its cause- the ability to have interoperable software. Jobs still has a good excuse for his failure to provide this interoperability though, and he made this clear in his “Thoughts on Music” posted on the Apple website. Basically, he reminds the customers that it is the major music labels that are forcing him to uphold DRM on iTunes downloads. Three of these labels are out of Europe. It will be interesting to see whether Jobs can still keep his image of the “good guy” throughout this battle, and whether consumers will turn to blame only the major labels.