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WinInfo Daily UPDATE, April 3, 2007: EU Reveals Apple Antitrust Investigation

WinInfo Daily UPDATE, April 3, 2007: EU Reveals Apple Antitrust Investigation

EU Reveals Apple Antitrust Investigation

Today the European Union (EU) announced that it's investigating Apple Computer for antitrust violations related to the pricing of music sold via its iTunes Store service. The European Commission (EC) has sent a statement of objections to Apple, spelling out how the company (and the four major recording companies who supply it with music) are violating EU antitrust laws.

At issue is the way Apple charges different prices in iTunes Store for the same content in different countries. This, the EU says, unfairly penalizes those consumers in EU countries where the content is more expensive.

"The European Commission can confirm that it has sent a Statement of Objections to major record companies and Apple in relation to agreements between each record company and Apple that restrict music sales," a memo issued by the EC reads. "Consumers can only buy music from the iTunes online store in their country of residence. Consumers are thus restricted in their choice of where to buy music and consequently what music is available and at what price."

The memo notes that Apple's distribution agreements with the record companies violate the EC Treaty. Apple puts the blame squarely at the feet of its record industry partners.

"Apple has always wanted to operate a single pan European iTunes Store accessible by anyone from any member state," an Apple spokesperson said. "We were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us. We don't think Apple did anything to violate EU law."

Notably, the EC pointed out that the investigation was not about Apple's dominant position in the digital music market or its proprietary digital rights management (DRM) scheme which has come under fire in various EU countries including Norway and France. Apple's quick embrace of EMI's decision yesterday to sell DRM less music was expected to quell those types of complaints, though Apple's dominance of the music market is expected to continue regardless of whether that dominance was legally obtained.


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