Transcript Does DRM Affect the Mobile Application Market

Does DRM Affect the Mobile
Application Market
Tihomir Katulić, Faculty of Law
Kruno Golubić, University Computing
Center
University of Zagreb
Digital content
• Protected by copyright/droit d’auteur
• Distribution of digital content is a key aspect
of electronic commerce.
• Rampant digital piracy
• DRM technologies are used to prevent
unauthorized reproduction, distribution and
use of protected works
Intellectual property vs. Competition
• Intellectual property – a statutory monopole
to promote creative activities in culture,
technology, business
• Competition rules foster market competition
and benefit consumers and society
• An evergreen of European private law
What is Digital Rights Management DRM?
• "Digital rights management (DRM) is a type of server software
developed to enable secure distribution - and perhaps more
importantly, to disable illegal distribution - of paid content over the
Web”
• DRM covers the description, identification, trading, protecting,
monitoring and tracking of all forms of usages over both tangible
and intangible assets“
• Digital Rights Management stands for technical measures, material
(hardware) or immaterial (software) products whose purpose is to
allow the legitimate user limited access to protected content in
digital form.
• Encompassing term for several different technologies used to
enforce pre-defined limitations on how to access and use protected
digital content
DRM in multilateral agreements and
international legislation
• Historically DRM has been regulated as a
technical measures and rights management
information
– Article 6, EU InfoSoc Directive (Directive 2001/29/EC
of the European Parliament and of the Council on the
harmonisation of certain aspects of copyright and
related rights in the information society)
– Articles 11 and 12 of the WIPO Copyright Treaty
– Articles 18 and 19 of the WIPO Performances and
Phonographs Treaties.
DRM vs. Technical protection
measures
• Often, DRM and TPM are considered the same
• Some choose to differentiate between DRM
and TPM by defining technical protection
measures as the technology used to control
and restrict access
• Accordingly, DRM would then be technology
that relies on TPM implement these controls
and restrictions
Intellectual property v. Competition,
round 2
• Virgin Mega v. Apple
• Intellectual property rights are being curtailed
by the application of competition principles in
common law legal systems
• This idea is contested in the European
continental legal systems, along with other
issues concerning applicability of IP rights
(principle of territoriality)
Specific challanges of mobile
application licencing
• A fundamentally different model of
application distribution
– Download and installation of applications through
the official market
– Higher level of quality control and application
security through approval process, however...
– Applications can be revoked from markets and
devices
DRM markets
• DRM technology itself presents an important
market
– Technology is a product
– Preventing a competitor to obtain effective DRM is a
market violation in itself
• DRM protected works markets
– Content with functionality simultaneously in digital
and analogue form
– Content that exists in two forms but has full
funcionality in the digital form
– Content that only functions in digital form
Case study: Apple Fairplay/iTunes
• iTunes allows users licensing and access to music
(albums and individual songs), films, television series
episodes, radio broadcasts, podcasts
• the most popular digital distribution system in history,
but does it represent a market violation?
– terms and conditions in the iTunes user's licence
agreement
– limit or deny access to licenced content in the event of
closing the iTunes service
– the user is limited in copying licensed content and
authorizing additional devices to access licensed content
– how does Apple's behaviour, and indeed the whole
iTunes/AppStore/iOS eco-system affect competition?
Market creating effect of DRM
• By preventing users from accessing and using licensed content in a
manner of their own choosing – Apple created a new market - the market
of content for Apple devices
• Never before has licensing of content, music, movies or computer
software implied a limitation on the actual model of device being used to
access content
• Apple managed to control the devices and download services
monopolizing the market of Apple devices in terms of content distribution
• In hindsight, Microsoft's quasi-monopoly in the desktop and server
operating system market has shown to be much less dangerous and
competition, coming both from Apple and Google as well as from the Free
Software/Open Source community has successfully developed competing
products and business models.
• Apple's behaviour and usage of DRM technology resembles the effects of
a tie-in agreement - a well understood practice of selling a product or a
service as a mandatory addition to a purchase of another product or
service
Of Cathedrals and Bazaars
• the rise of two distinct models of application
distribution
• one governed by a single entity (the cathedral)
• one open to parallel input from different,
competing or cooperating sources (the bazaar)
Conclusion
•
Considering the success of mobile application eco-systems developed around the
App Store/Marketplace model and the central role of DRM technology in all but
one of the competing systems it is safe to conclude that DRM technology can
exhibit a strong anti-competition effect
•
This is not the case against adopting and further refining DRM technology. The
technology itself is neutral and can be put to constructive use as well.
Effective DRM technology can enable individual authors - artists, journalists,
programmers - to develop and monetize their work online without the need for
intermediaries like publishing houses or collective rights management societies
Closed off application markets of today with their anti-market DRM
implementation are often a more affordable and effective choice for today's
authors.
DRM and developing content management systems hold the promise to finally
turn the tide of rights management from collective to individual - for the first time
since the invention of the printing press.
•
•
•
Thank you for your attention!
[email protected]
[email protected]