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Why we don’t have to fear Apple’s controlling ways

April 6, 2011

Yesterday’s post about how I like the iPad (and other tablets) really irked some people, which is not surprising since it touched on copyright. Here’s some advice: if you’re just starting to date someone, don’t bring up religion, politics or Apple. With any of those topics, you run even odds of getting your head torn off.

The point I tried to make is that the fears of Apple trying to dictate what movies, music and other media people could or couldn’t put on their iPad just haven’t been realized, nor do I think they ever will be. So far, there are apps officially available through Apple that let you put whatever media you want onto it, and where it’s not official there are usually workarounds so users don’t have to get their content from just Apple (Handbrake, for example, converts movies so you can watch them on the iPad or iPhone nicely, if you don’t have VLC).

A number of folks expressed concerns with those views. The issue, they say, is actually deeper than just copying TV shows and songs onto devices, it’s about having full control over those devices to start with - something big companies such as Apple, Sony and the like are supposedly trying to erode by lobbying the government. This is dangerous because it is eating away at our property rights, which will lead to a situation where we don’t actually own what we think we own.

A very good example of this is the current situation regarding Sony and the PlayStation 3. As I mentioned yesterday, the PS3 - because of its impressive hardware - was eventually cracked and used for purposes that Sony didn’t intend, such as helping crunch astrophysics problems and for running open-source operating systems such as Linux. Sony moved against this and blocked cracked consoles from accessing the internet, thereby earning the wrath of hackers. Sony’s justification is that it was moving to prevent people from playing illegally hacked games, but a whole bunch of folks who were simply cracking the console to do cool-and-not-necessarily-illegal stuff - like astrophysics - unfortunately got caught in the net.

It’s a crappy situation that is potentially alarming for even regular folks. Imagine you go out and buy a gadget with the intention of using it for certain purposes. Everything is fine for a few months, but then the company that sold it to you remotely disables one of the functions you initially bought it for. Suddenly, you’re stuck with something that’s less than what you bought, or even useless. You wouldn’t be too happy.

The fear is that without the proper copyright laws in place, this sort of thing will become the norm - big technology companies will be able to change the stuff we own via internet updates, to the point where our property rights become sublimated to their copyright rights.

The big issue when it comes to Canadian copyright law is a clause included in the past few legislative proposals that would make it illegal for consumers to break any locks placed on devices. In the above case, if Sony said users couldn’t hack the PS3, then that’s that. It wouldn’t matter whether the console was hacked to play pirated games or to do astrophysics, it would be all the same - illegal - under the law.

There seemed to be a rational consensus building before the election was called and the current copyright bill scrapped about creating an exception to the clause where it would be okay to break such locks for “non-infringing” purposes. That means the intent for which the cracking takes place would enter into the equation. While I’m not a lawyer, I take that to mean that cracking a PS3 to play pirated games would still be out, but doing astrophysics on it would probably be okay. Entertainment and some technology companies understandably oppose such a compromise because they would then have to prove a cracker’s intent during any court action, which can be tough. Nevertheless, it sounds like a reasonable measure to me and hopefully some form of it enters into the next round of proposed legislation.

In any event, debating copyright law versus property law is almost pointless given the nature of technology and the level of competition in the field. Some commenters wondered yesterday why I’m so hard on the telecom industry but I’m okay with what’s going on in the technology business, but the answer is simple: the first has very high barriers to entry and is therefore uncompetitive by nature, while the second is perhaps the most competitive industry there is, so market forces can be reasonably expected to keep abuses in check. To enter the telecom business in any country, you need really deep pockets, all sorts of regulatory permissions and, in cases like wireless, scarce assets such as wireless spectrum. To go into the technology business, whether it’s hardware or software, you need considerably less than that, which is why Silicon Valley is rife with venture capitalists looking for the next big thing. Succeeding in the technology business may be hard, but getting in is relatively easy.

Because of that, monopolies in the technology world tend to either be a) short-lived, or b) not really monopolies. In the first case, the life-span of monopolies is actually getting shorter and shorter. In the days when computer hardware was all-important - from the 1950s to the 1980s - IBM ruled the roost and had the numerous anti-trust bruises to show for it. Next up was the software era that Microsoft dominated, from the 1980s until late 1990s, and the results were the same. Today, we’re in the internet era and cases are being made that Google is a monopoly. The company argues that it can’t really be a monopoly because users can easily switch to a competitor with only a mouse click. While Google may perhaps wield an uncomfortable amount of power in determining internet ad rates, fundamentally I’d be inclined to agree.

The same charge is leveled at other internet companies, such as Facebook and even possibly Twitter. Because they have grown so large in their respective businesses, they meet the textbook definition of a monopoly. A real monopoly, however, is one that provides necessary services that can’t be avoided or attained from a competitor. Again, in telecom there are only a few providers with little hope of others popping up. In the technology world, new and better players spring up all the time. Keep in mind that Google is only 13 years old while many other so-called monopolies are younger still. They are not proper monopolies - they are merely market creators who have yet to be properly challenged. But they will, if not by direct competitors, than by whatever is next. Google may very well be supplanted by a company that leads whatever the next technological era will be.

The same holds true in the current hardware world. Although the players are considerably older and well established, they are equally as competitive and subject to ebb and flow, as anyone who has ever been to a trade show such as CES can attest to. Such events can make your head spin with the sheer volume of new products competing for attention.

That brings us to Apple. The company is currently the technology world’s golden child, but it’s important to remember the company does not have monopoly power - or it has only temporary monopoly power - in every market it’s in. Despite nearly 40 years of operation, the company still has a relatively small slice - 10% - of the computer market. Despite having the most hyped phone in history, Apple looks destined to have only a small share of the smartphone market, with Android surging ahead. This position will severely affect its lone area of monopoly market share - music players - as every smartphone out there doubles as an iPod. I don’t know about you, but I can’t remember the last time I used my actual iPod - it’s a device category that is rapidly headed for obsolescence. Apple also has a strong position in digital media sales with the iTunes store, but that too is being diminished by hordes of competing companies and business models, including Amazon, Netflix, Pandora and so on. Apple is, of course, the early leader in tablets but given everything else in this paragraph, it’s reasonable to expect that probably won’t be the case in five years.

So how can anyone be worried about Apple being, as one commenter put it yesterday, “the only game in town?” Judging by the way the company has historically operated, Apple is content to be a premium-priced niche competitor. That brings us back to how restrictive Apple wants to be with its content and devices. A good - or should I say stupid - way to drive customers into the arms of competitors is to be even more controlling. I’m not saying the company isn’t dumb enough to do that - it clearly hasn’t learned from its computer business to play nice with others, or just doesn’t care to - but at the end of the day, it doesn’t really matter. Unless Apple becomes more open with its devices, it is destined to be a small competitor in every business without much power.

Returning to Sony, its PS3 adventures have pretty much guaranteed that anyone who cares about openness and control over the products they own won’t be buying the company’s goods any time soon. I remember swearing off Sony products for some time after the whole rootkit fiasco a few years back, where the company’s CDs covertly installed spyware on computers. With Sony’s long history of promoting its own proprietary standards and locks, I’m actually surprised that anyone was put off by the latest controversy. Have they not learned their lessons? Ironically, as if in direct response, Microsoft is endorsing the hacking of its Xbox Kinect.

If enough people care and don’t buy Sony’s stuff, the company will learn its lesson and be nicer. If not enough people care, well there isn’t much of a problem then, is there?

Finally, we come to the accelerating pace of technological advancement. The main reason why trying to govern technology with laws is somewhat pointless is because legislators can’t possibly keep up. The Canadian government, for one, has spent years trying to figure out the proper laws to govern the copying of song files onto an iPod, yet that same device is on the verge of becoming obsolete before anyone can even make up their minds. Technology is simply moving too quickly.

The continued existence of torrent king The Pirate Bay in the face of serious, concerted efforts to shut it down is living, breathing proof that law cannot keep up with or beat technology. In that vein, there will always be ways to crack locked content and devices no matter what the law says. If the copyright holder finds a way to block or detect a crack, the hackers will up their game and the cycle will repeat. The bottom line is, people have always been able to fiddle around and deconstruct content and devices - there’s no reason to expect they won’t be able to continue to do so, no matter how much lobbying the big companies do.

Okay, I think I’ve gone on long enough and touched on way too many areas there, probably doing none of them justice. I’m sure the most ardent critics are unlikely to be swayed by any of this and there will be further accusations of me not understanding the issue, dismissing it or possibly even being in league with the entertainment/technology industry. Whatever happened to simply not buying the things you don’t like and not dissing someone else for doing so?

  1. April 6, 2011 at 7:55 am | #1

    I’ll state the obvious, and say that I don’t agree that market share and consumer choice are a solution to these legal/political issues.

    All I ask people to do is re-read Peter’s article and substitute “Phoenix Homes” (A home builder that operates in the Ottawa Region) for “Apple”, and see if the article still makes sense.

    That is the short form — and here is the long form :-)

    Phoenix has a tiny market share globally, and thus is even a smaller player than the smallest of the technology companies that support non-owner locks on our technology.

    Under the logic that consumer choice solves all problems, having Phoenix retain the keys to our homes, and deny them from the owner, would not be a problem. People would be free to buy a home from someone else. They would even be free to leave Ottawa.

    The suggestion would be that no government would need to step in as they do for rental agreements and regulate the relationship to ensure it is fair. The claim would be there is no need for a “Landlord Tennant Act” equivalents for this new and quite odd relationship between the home builder and home owner.

    What if it became the norm in the industry to deny the keys to home owners? Naw, that clearly wouldn’t be a problem — see: there are home builders that aren’t doing denying keys to homes today, so…

    At what percentage of the market of home builders retaining the keys to homes does government, on behalf of society, step in and regulate? Do we look at vacancy rates, or just a theoretical existance of owner locked homes? Do we just leave the market to being a wild-west forever?

    It isn’t a matter of one player owning the entire market — that was never the issue. (IE: This isn’t about Apple, Sony, Microsoft or other specific ESA/BSA member - but about a legal and industry trend). I don’t think citizens should be expected to blindly trust any manufacturer/builder who wants to deny them the keys to what they own. Some people may have that trust, but should this relationship be forced on an increasing percentage of the population?

    Would people with owner locked homes be allowed to buy insurance, electricity, and other such things? Would they be denied access to an increasing number of related services, just as owner locked technology owners are increasingly denied access to lawful entertainment channels?

    While some Android-based phones are “open” (however you define that :-) , not all are owner locked or unlocked. This often gets missed when discussing Android. Android is licensed such that anyone can take that code and use it to build whatever type of device they want. That includes a handset manufacturer building a non-owner locked phone. The hardware manufacturer can decide to not allow access to the Android Marketplace or any other way to add third-party applications not approved by the handset manufacturer. An Android-based phone, tablet or other device can be as open or as closed as the manufacturer desires.

    Is it lawful for the owner of this hardware to remove the software that came with it and install a fully owner locked operating system? Well — that depends on a lot of complex factors, doesn’t it? That is what the debate was at C-32 committee. Jason and I could debate for years and disagree on those factors, as well as what the law should be. I also don’t think we would agree on what the impact of “non-infringing purposes” would be either, or whether I should have been confident that such an amendment would make it into the final passed bill.

    Should it be so complex, or should the law clearly protect the rights of the owner of some hardware to erase the software that came with it and install software of their own choice? How is that different than the owner of a home calling up a locksmith and asking them to change the locks: ensuring that the owner now has the keys, and that third parties (including the builder) no longer has lawful access?

    If the builder wants to retain the keys, why can’t they retain ownership and make use of the well understood and appropriately regulated rental arrangement? Why is there this desire to obfuscate the relationship in ways that will only push people to the courts for inevitable disputes?

    It should also be noted that both Handbrake and VLC include (or have as options) libraries which circumvent technical measures applied to various content including DVD’s. These tools are bad examples to use considering some the device compatibility/interoperability that they offer is part of what is being targeted by the changes in law proposed by ESA/BSA. And don’t get me started on software patents in codecs, brought to us by the same folks, which puts the legality of many of these transcoders into question for additional reasons.

    Is it possible that you are encouraging people to violate the very laws we are discussing, as part of the suggestion that these legal changes aren’t important?

  2. Chris
    April 6, 2011 at 8:43 am | #2

    To enter the telecom business in any country, you need really deep pockets, all sorts of regulatory permissions and, in cases like wireless, scarce assets such as wireless spectrum. To go into the technology business, whether it’s hardware or software, you need considerably less than that, which is why Silicon Valley is rife with venture capitalists looking for the next big thing. Succeeding in the technology business may be hard, but getting in is relatively easy.

    With all due respect, you are missing the point! It’s not about HARDWARE, heck, even your grandma (with a few pointers) can build a computer. But there are only very few players when it comes to operating systems, the software that CONTROLS computers, and the trend for the past 10 years has been to SEVERELY RESTRICT what users can and cannot do with their OWN machines, under the guise of security, when, in reality, it’s all about insuring unending revenue streams to those who control the copyrights, and, as you well know, we’re not talking about artists and creators!!!

    PS I’m not sure how the code will work for quoting, I just guessed what to do to get this effect, as there is no preview available here ;)

  3. Hub
    April 6, 2011 at 10:53 am | #3

    You got the PS3 story wrong.

    The PS3 had the “other OS” option that allowed to install Linux that made it a nice choice for cluster nodes on parallel computing.

    It is just that recently Sony decided to remove the option, even for those that where enjoying, by way of a firmware update. It got taken away. A now Sony sue those who dared to crack the system to restore the “other OS” option.

    This little detail matters.

  4. nowhere
    April 6, 2011 at 11:42 am | #4

    If enough people care and don’t buy Sony’s stuff, the company will learn its lesson and be nicer. If not enough people care, well there isn’t much of a problem then, is there?

    I think you’re missing that everyone who bought a PS3 already is forced to live with Sony’s decision. They could care all they want about the Other OS option being removed and not buy Sony’s products for the rest of their lives but it doesn’t look like Sony is ever going to put the option back on the PS3. Removing features from products after a consumer has bought them is a problem because there’s no remedy for the consumer. With no way to return changed products if you bought a PS3 for the Other OS feature and then it’s removed, you’re stuck with possibly a 700$ paperweight.

    Also, if only you cared about the rootkit being installed on your computer but that was because only you really understood what it meant for everyone that had had it installed without their knowledge then wouldn’t it still be a problem?

    Large amounts of people who use computers who had Sony’s rootkit installed have probably never removed it because they simply didn’t know that Sony ever did anything like installing it. It was still a problem though because it increased the vulnerability of everyone’s, people who cared and people who didn’t care, computer.

  5. April 6, 2011 at 11:42 am | #5

    Hate to say it, but what Apple does is just the start of a long and scary journey.

    Lots of people have a reverence for Apple because they market so well and produce aesthetically pleasing, trendy devices. Heck, lots of people go so far as to laud their software efforts.

    The truth is:
    o Apple produces a proprietary (and extremely poorly designed) operating system. If you’re really bored, look up XNU and the BSD Server it runs.
    o Apple sells PC hardware typically at least 6 months behind the curve for prices higher than what they went for at the same time.
    o While it’s fair that Apple only wants OSX running on Apple computers, this ultimately conveys a very troubling message. It’s somewhat elitist, but the final takeaway is “we don’t want you running our operating system”. Yet I can get Linux (Ubuntu) running on PPC and x86/x86-64 based machines for free.

    These are all signs of a company with bad intentions for regular users. I would caution anyone who thinks that they software side of Apple is an example of excellence. It is hardly different than it’s cousin Microsoft.

    Why pay more for less power, less performance as a result of your OS and less functionality? Linux outstrips OSX on all these and costs 100% less.

  6. Chris
    April 6, 2011 at 12:57 pm | #6

    Alex :
    I would caution anyone who thinks that they software side of Apple is an example of excellence. It is hardly different than it’s cousin Microsoft.

    Hear, hear! Microsoft’s OSes used to be a power user’s dream over 10 years ago but certainly not anymore. It never ceases to am(aze/use) me how Microsoft and Apple fanboys are just as strongly opposed to each other today, when in reality the operating systems and the technology is practically the same now, which is to say, lame and intentionally shackled.

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