In his recent speech at George Mason, Assistant Attorney General Thomas Barnett discussed Apple and its successful iPod/iTunes products and services. Barnett describes Apple as a “useful illustration of how an attack on IP rights can threaten dynamic innovation...” Based on how Apple rose from the early days of rampant P2P piracy, helped settle the nervousness from the “Studios” on perceived limitations to digital content distribution, Barnett explains that its natural to expect Apple “would be cheered for pioneering greater access to music.” However, things are different.

Apple is now under assault ...on the grounds that iTunes is too dominant and does not "interoperate" with devices other than iPods. One recent law… may require sales of music or video to operate across a wide range of devices and creates a government body that can require a digital music provider to turn over information relating to its "technological measures" to the extent needed for interoperability with other devices… the interoperable song format that is advocated -- MP3 -- is a compressed format of generally lower fidelity than iTunes files.

So what harm has Apple caused? Barnett raises and dismisses possible complaints against Apple, and shows how they are not viable given the realities of the technology industry, and Apple’s own behaviour.

o…"consumers are locked into buying songs only from the iTunes service and that they will have to pay too high a price for iTunes songs:"But there are two problems with this theory. First, consumers can upload other formats to Apple's devices, so they do not have to buy from iTunes. ..Second, it appears that Apple has been depressing per-song prices, not raising them. That sounds like a benefit to consumers.

o… "Apple is selling songs on the cheap but devices on the dear, and consumers are hurt because they are locked into buying the same expensive devices in the future:" The cheap songs/expensive device model may indeed be Apple's strategy. But …Apple's model is the opposite: consumers buy the expensive iPod device first, then have the option -- not the obligation -- to use the free iTunes software and buy the cheap iTunes songs.

o…"information just wants to be free:" … this argument is not based on competitive effects and consumer welfare. Information may want to be free, but information creators want to be paid -- they will not create without rewards. Indeed, the difficulty of protecting digital information against easy, unlawful misappropriation underscores the need for measures to protect one's investments.

o…"Apple may not be hurting consumers, but it is hurting competitors:" Apple's products are so successful that competitors want in on the party and see Apple's property as the easiest way to get a piece of the pie.

o..."(Does) letting competition in the market drive technological development does not necessarily mean less access:" The market has already disciplined Apple: remember, the iPod and iTunes originally worked only with Apple machines and FireWire ports, but Apple responded to consumer demand and opened up its technology to work on PCs and USB 2.0. .. Market discipline can be a powerful force.