FCC on Apple, DOJ on Google — the Feds tackle tech

Paul Suarez
22 September, 2009
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Watch out, libertarian techies—big government has upped its ante in a number of tech issues dominating headlines. In the near future we could see the Feds impact the future of unfettered Internet access, electronic books, and Apple policy for how its products are used.

Darn those Democrats—it seems like a liberal administration is a prerequisite for government involvement in tech business. (Calm down—this is a nonpartisan blog … stay with me.)

But then again, is government regulation as bad a thing as some make it out to be?

In 2001 the Department of Justice reached a settlement in Microsoft’s antitrust case. Competitors had been griping about Microsoft’s business practices for years but the government didn’t take a critical look at things until 1998 under the Clinton administration. At the time government involvement in technology business operations was virtually unheard of. The settlement (which was recently extended for 18 months) forced Microsoft to play nice with computer manufacturers and third-party browsers, e-mail clients, media players, and instant messaging software.

Fast forward eight years. A financial meltdown has left the global economy in shambles. The Obama administration, while attempting to restore governmental oversight in the financial system, figures that while it’s in the mood it might as well take a look at tech issues.

On Monday, FCC chairman Julius Genachowski announced a plan to formalise net neutrality, which was one of President Obama’s campaign promises. The plan will prevent service providers from charging customers for bandwidth based on what they use it for, and prevent content limitations based on who you buy access from.

Also, the DOJ filed a 32-page objection to the Google Books settlement, arguing it violates class action, antitrust, and copyright law. DOJ admits that an online library of out of print works would benefit the public, but declares that the current settlement doesn’t do enough to protect copyright owners.

And of course, it would be hard to talk about government involvement in the tech industry without mentioning the FCC looking into Apple’s decision to reject the Google Voice App from the App Store.

The fiasco recently heated up after Google made its report to the FCC public. The report said that Apple directly informed the company of the rejection, which contradicted Apple’s claim that it hadn’t rejected the VoIP App, but was still studying it.

The heart of the issue is whether Apple can prevent use of third-party applications that offer similar services to its own programs. Based on the Microsoft ruling, it doesn’t look like it. The feds forced Microsoft, in the antitrust settlement, to provide the same development access to third-party software companies that it would to its own Windows developers. The idea was to prevent Microsoft from making its software options such as Windows Media Player from integrating better than third-party software such as WinAmp.

Yes, Apple does give great access to developers for the iPhone, but doesn’t acting as the gatekeeper to the App Store prevent true competition with third-party vendors?

I’ll admit that the government sticks its nose where it doesn’t belong from time to time, but protecting individual rights is its responsibility. For that reason the Obama administration is asking these companies to justify their actions.

It’s unlikely that the government will order Apple or Google around in these two cases, but flexing its antitrust muscles might make companies think twice before attempting to prevent competition at the expense of consumers.

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