EU Commission Threatens Anti-Trust Action Against i-Tunes

by Robin Pilgrim, LawAndTax-News.com, London

05 April 2007

The European Commission said on Tuesday it had opened an antitrust probe into Apple's iTunes and the agreements the company has with record labels, which may be contrary to EU law.

In Europe, users of iTunes can download music only from the iTunes site in the country where they are resident, which on the face of it would certainly appear to infringe the EU's single market and competition rules. Apple itself has said from the beginning that it would have preferred to open just one, Europe-wide music store, but that the record companies put forward a number of objections centering on copyright problems.

The Financial Times had reported on Monday that the Commission had sent a 'statement of objections' last week to Apple and a number of record companies including Sony BMG Music Entertainment, Universal Music Group, Warner Music and EMI Group.

The commission said the recipients of the letter have two months to answer its questions.

An Apple spokesperson said: "We don't believe Apple did anything to violate EU law. We will continue to work with the EU to resolve this matter."

Last month it had appeared that Competition Commissioner Neelie Kroes was relaxed about iTunes after the newly-appointed Bulgarian Commissioner for Consumer Affairs, Meglena Kuneva softened her criticism of iTunes' incompatibility with other technologies, saying that she had worked closely with Neelie Kroes. Kroes' department is on record as saying that there were no problems with Apple's use of digital rights technology.

Meglena Kuneva had previously told German magazine Focus: "Do you think it's fine that a CD plays in all CD players but that an iTunes song only plays in an iPod? I don't. Something has to change."

Responding to criticism of the inclusion of a Digital Rights Management 'lock' on downloadable music sold through iTunes, Apple and EMI this week announced that EMI tracks and albums would in future be available without the 'lock'. Individual tracks will cost more, but albums will cost the same as previously.

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