Is Online Music Locked in by Leveraging?

Communications & Strategies, 2006

10 Pages Posted: 9 Jan 2007

See all articles by Francois Leveque

Francois Leveque

École Nationale Supérieure des Mines de Paris - Centre d'Économie Industrielle (CERNA)

Abstract

Pay-to-play online music distribution, digital rights management (DRM) systems and hard-drive-based digital music players are new industries. However, they have already attracted several judgments and enquiries from the competition authorities. The first of these is already six years old. In October 2000, the European Commission approved the merger between Time Warner and AOL1 on the condition that AOL break its tie with Bertelsmann and its music catalogue. That remedy was intended to eliminate the risk, identified by the Commission, that the merged company would dominate the online music distribution market. In November 2004, France's competition watchdog, the Conseil de la Concurrence, dismissed a claim by VirginMega against Apple. VirginMega manages a download platform on the Internet. Apple refused to grant the plaintiff a license to use Fairplay, Apple's proprietary digital rights management software. These two cases will be used to show how to perform an economic analysis of the anticompetitive effects of vertical integration.

Keywords: foreclosure, online music, antitrust, refusal to license

JEL Classification: L22, L42

Suggested Citation

Leveque, Francois, Is Online Music Locked in by Leveraging?. Communications & Strategies, 2006, Available at SSRN: https://ssrn.com/abstract=951893

Francois Leveque (Contact Author)

École Nationale Supérieure des Mines de Paris - Centre d'Économie Industrielle (CERNA) ( email )

60, boulevard Saint Michel
75272 Paris Cedex 06, 75272
France

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