10 Ways To Stifle Tech Competition - InformationWeek

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08:32 PM
Thomas Claburn
Thomas Claburn
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10 Ways To Stifle Tech Competition

Competition happens, unless you can avoid it. From Microsoft Windows RT to Google Chrome, here's how today's giants safeguard their turf.

4. Facebook's Social Graph
For years, Facebook helped users import their contacts from email services like Gmail without providing a reciprocal export capability. In late 2010, Google began preventing Facebook from grabbing Gmail contacts because Facebook didn't offer an export option. Facebook last August relented, but not really: It allows users to export friends' email addresses--addresses that the user initially entered--if the friend has granted permission. And this option is unchecked by default in a menu the friend has probably never seen.

5. Google's AdWords
Google protects its crown jewels in the same way that Facebook does. But Google isn't concerned about anyone copying its Google+ social graph, at least not yet. Google is an advertising company and thus seeks to protect its ad business. That's why Google's AdWords API terms ban automated access to AdWords data.

6. Oracle's Java
Java is free for anyone to use, except when you need a license. The Java APIs are copyrighted, or so Oracle claimed when it sued Google for copying its APIs in Android. The judge hearing Oracle's claim may soon decide whether APIs can be copyrighted. While you wait, ponder the meaning of free.

7. Sony's PS3
Like many companies, Sony relies on the Digital Millennium Copyright Act to prevent people from modifying its products. The U.S. Copyright Office held a hearing Friday about whether it should continue to allow a copyright law exemption for circumventing access-control technology. Sony doesn't want the exemption to be allowed for game consoles. In comments submitted to the Copyright Office, Sony's legal representative argued, "If the exemption is granted, it is virtually certain that successful hackers, under the guise of the exemption, will create the tools that enable even novice users to make, distribute, download, and play back illegal copies of [PlayStation 3] games."

Sony argued that its restrictions help sustain PS3 game prices. "The hacking of software on the PS3 or any other video game platform will result in an increase in the number of unlawful copies, which will, in turn, decrease the sales of authorized copies, thereby stifling video game developers' and publishers' incentives to create and distribute games," Sony's legal representative argued.

In other words, too much competition is bad for business.

8. Comcast's Xfinity
Comcast plans to exempt its "Xfinity On Demand" service from broadband data caps. Senator Al Franken recently expressed concern that this appears to be a violation of the agreement Comcast made to secure approval of its NBCUniversal acquisition. Exempting your own data services from rules imposed on competitors doesn't sound very fair. But isn't that the idea?

9. Google's Android
Android is open and free. That's the party line. But really it's just less closed than the alternatives, at least until Mozilla's B2G launches. "Less closed," however, falls short of "open." Android comes with strings attached if you're a mobile carrier: anti-fragmentation clauses and default Google Apps. Android is open source of a sort. It's delayed source, released at Google's leisure. Google welcomes competition, but insists on a head start.

10. Amazon Publishing
Amazon's Kindle represents a reprise of what Apple did with its iPod and iTunes--it's a self-reinforcing software/hardware ecosystem. The Department of Justice recently went after Apple and its publishing partners for price fixing, but many in the industry believe Amazon should have been the DOJ's target. The Author's Guild claims that Amazon used its power in the print industry to gain control over the e-book market and has been selling e-books at a loss to weaken competitors.

"A truly competitive, open market has no indispensable player that can call the shots," the Author's Guild says, lamenting the threat Amazon poses to Barnes & Noble.

If you see a truly competitive, open market in the wild, take a good look. Chances are someone is already working on erecting barriers to entry.

High-profile breaches against cloud-based services have forced tougher security and closer scrutiny of what to put in the cloud. In our Dark Side Of The Cloud report, we explain the risks. (Free registration required.)

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User Rank: Strategist
5/15/2012 | 4:13:15 PM
re: 10 Ways To Stifle Tech Competition
Noone likes or supports fair competition and this is not restricted to the tech industry. We need to look only as far as the New Orleans Saints, the black books in the gambling industries, or Bernie Madoff to mention only a few and see the extent to which some will go to tip the balance of the scale favorably.

Your article comes shortly after reading the statement from Judge O'Grady, presiding over the Kim Dotcom trial, in which the judge states the trial may never be held because the accused was never served. One has to wonder if there was not a little sigh of relief from the cloud storage vendors as competition was eliminated with the seizure of assets. Was the Justice system knowing or unknowingly used to benefit a few in the online (cloud) storage industry (in effect wasn't Megaupload simply a cloud storage vendor)? Whatever the case this competitor is now out of the competition.
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