EU charges Apple over iTunes pricing

 

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By Simon Aughton

Posted on 3 Apr 2007 at 08:18

The European Commission has issued formal charges against Apple and the major record companies, alleging they have violated EU rules on restrictive business practices.

The Commission has sent a Statement of Objection to Apple and unidentified record companies, believed to be the 'big four' of EMI, Sony BMG, Universal Music and Warner Music.

Chief among the Commissions concerns is the fact that consumers can only buy music from the local version of online stores. In December 2004 the UK's Office of Fair Trading asked the Commission to investigate the higher price for music downloads in the UK compared to the Euro zone: 79p per track compared to €0.99, around 67p.

'Consumers can only buy music from the iTunes online stores in their country of residence and are therefore restricted in their choice of where to buy music, and consequently what music is available and at what price,' said Jonathan Todd, European Commission spokesman.

Apple said that it does not believe that it has violated EU law and pointed out that the record companies had given it no option but to operate separate iTunes stores with separate prices.

'Apple has always wanted to operate a single, pan-European iTunes store, accessible by anyone from any member state,' the company said in a statement. 'But we were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us.'

But while it is concerned about pricing differentials, the Commission stressed that it does not believe Apple has a dominant market position, nor is it concerned about its use of DRM, something that worries regulators in individual countries, notably Norway. Of course DRM on music could soon become old news, should record companies follow EMI's lead and abandon their insistence on copy restrictions for downloads.