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Regulation Customer Demand

Many American commentators have a very particular view of the EU and regulation. Usually the view is that the EU are wrong but in many ways it’s just different from regulation in the US.

This is on daringfireball:

Apple is getting away what some describe as “malicious compliance” because they’re under no popular demand from their actual customers to comply in any other way.

I don’t mean to single out Gruber; this is a common opinion. It’s true in the sense that customers are not demanding it but wrong in the sense that, well, let’s ask Steve Jobs1:

It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.

Maybe alternative app stores and browser engines are not the solution, but lack of customer demand doesn’t necessarily indicate that it’s wrong.

Competition law in the US is pretty much only focused on the price to consumers. Remember when Apple were taken to court over the “agency model” of selling books? Amazon was selling ebooks below cost.

Is that good for consumers? Immediately at the point of sale, yes. It’s an objective measure, and I think that’s why it looks appealing.

But you also have to consider that other companies can’t afford to sell books below cost. Amazon’s goal wasn’t to offer the best deal for consumers. It was to drive out competition. Once everyone else had bowed out the ebook business, Amazon would be free to set prices as they wish.

Now, you could categorise the above as pure speculation. If you asked Amazon, they’d say they loved competition and that, no, they had no plans to raise prices. Of course they’d say that.

Once you get past analysing only the price, things become much more speculative. You’re looking at the intent of an action or gaming what a company is planning to do in one version of the future.

If you consider only what the consumer is asking for, it had the veneer of being objective. It’s simpler and easier but it’s absolutely not the whole story. The EUs method means that companies could effectively be constrained for thought-crimes. But the US model deliberately ignores factors that we all know are at play.

There’s no right answer here. Let’s not pretend that either method of regulation is objectively correct. Personally, I think the EU model is more effective but I don’t pretend that it’s perfect.


  1. The quote I actually thought of was this one: “If I had asked people what they wanted, they would have said faster horses.” But it turns out that it’s neither by Ford or Jobs↩︎