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EU Launches Antitrust Probe Into iTunes
Macthorpe writes "ABC News is reporting that the EU has started an antitrust probe into the way that Apple sells music on iTunes. As you can only purchase from the store of the country where your credit or debit card is registered, the price differences and availability differences between iTunes stores for different EU countries constitute a violation of EU competition laws which forbid territorial sales restrictions.'Apple spokesman Steve Dowling said Monday the company wanted to operate a single store for all of Europe, but music labels and publishers said there were limits to the rights that could they could grant to Apple. "We don't believe Apple did anything to violate EU law," he said. "We will continue to work with the EU to resolve this matter."'"
Oh, the EU has fined so many companies for price fixing, I don't even know where to begin--Bayer & Chemtura, Siemens, Dow, escalator firms, Heineken, Aventis, animal feed companies, the Deutsche Post, many vitamin producers, Nintendo and, of course, the well known case of Microsoft.
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I'm not saying that none of these fines are unjustified but I am saying that, if I may opine, the EU has been issuing a lot of fines. With this recent Apple one, it does seem as though Apple had no choice and if they aren't given an alternative to losing their contracts with record companies for the sake of running one Europe encompassing store, then I don't blame them. On the surface, the EU Commissions seem to be discouraging big businesses from selling things like XBoxes, PS3s or iTunes inside all of the countries. Is this a good thing or a bad thing? I guess time will tell
My work here is dung.
UK iTunes customers currently pay 79p per track. That's the equivalent of around $1.50.
DVD zoning puts all of the EU in one zone, so it doesn't violate EU rules.
It's nothing to do with developing a competitor. Ever since the EEC was founded by the Treaty of Rome, there have been a series of binding legal agreements on member states to enforce free trade. With a few minor exceptions, it is illegal for a member state, or an organisation operating inside the EU, to create barriers against the free movement of people, goods or services. Differential pricing can be seen as an impediment to free trade between members and therefore falls under the remit of EC Law (EEC, EC and EU - yep it's complicated).
If there is thought to be a case against Apple and the record companies then the EU Commission can refer the case to the European Court of Justice for a decision. If they are found to be in breach then the EU has the power to impose penalties on the companies.
What Apple has been doing with iTMS in Europe is so flagrantly in breach of the principles underlying the single market I'm frankly amazed it's taken the commission this long to get round to investigating them. I'd love to know who's been giving Apple their legal advice - I assume they're going to try to run an argument that they're providing a service rather than selling goods and therefore aren't caught in the single market rules - and will be very interested to see how this one turns out. We've not had a good free movement of goods case for a while...
1) Its not about coding. Having different release dates in different languages would be fine, even within the EU.
2) Its not about DRM. Locking to players may or may not be OK in the EU, but its a different issue.
3) Its not about having the same price. No-one says you have to sell for the same price everywhere.
4) Its not about Apple being forced to do things by the record companies. It doesn't matter who wanted it or didn't.
5) It is not the same as buying stuff in Japan and the US, because, you see, Japan and the US are not part of a single market established by treaty and with a transnational body, the Commission, regulating conduct of companies.
What is it about then?
It is unlawful in the EU to restrict imports and exports from one country to another, because that is in restraint of trade and anti competitive. You can sell it for 600 in Germany and 300 in France. But what you cannot do is prevent the Germans from buying the stuff in France.
Consequently, it makes no difference what the record companies or Apple think or say to each other. Apple cannot enter into an agreement to restrict sales from its UK sites to UK cardholders. If it did sign such an agreement, it is unlawful. It will have entered into a conspiracy to commit anti competitive behaviour. Along with whoever it signed the agreement with. They will both be fried for it. If it just did it off its own initiative, only it committed the unlawful acts. If it really did.
So please guys, stop blaming the record companies and exonerating Apple, its all irrelevant. We have, allegedly, one or more parties engaged in anti competitive practices which are unlawful in the EU. If so, one or both are going to get busted. Whoever instigated it is irrelevant.
If you want to get a better handle on it, think violating FTC rules on interstate commerce in the US.
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
The coverage by the Belgian/Flemish national news service says indeed that the price differences are reportedly required by the labels, and that (according to the Financial Times) the probe specifically targets EMI, Sony and Warner, who have two months to formulate an answer. And if the Commission doesn't like their answer, it reserves the right to confiscate 10% of the labels' revenue (from Internet sales, presumably). It doesn't say anything about sanctions against Apple.
Donate free food here
"Little does he know, but there is no 'I' in 'Idiot'!"
This is called "due diligence" to prevent contributory copyright infringement charges leveled against Apple.
The EU garuntees free movement of goods, services and people between its member states. Shutting out consumers based on where their cards are issued may well be in violation of this.So here's the problem. The right to copy a song onto your personal computer in France is considered, under EU law, a different service than the right to download that same song onto your personal computer in Germany because the right to copy it (copyright) is enforced separately in each country. So if Apple did not restrict the sale of a song from the French store to people with a French credit card, then sure a German could purchase the copyright with their German card, but assuming they are in Germany, it would be illegal for them to actually download the song in Germany, because their license to copy only applies in France and they aren't in France.
Your mistake is trying to equate a download with a CD, when those two things are treated completely differently by EU law. Under EU law, you cannot transfer a copyright (download license) in one country to another, while you can transfer a copy itself (CD).
Now, you may disagree, and think that imposing this restriction is not in violation of EU law. Fine. But you are grossly misrepresenting the situaton by claiming the EU commission wants Apple to charge the same amount in every country.The EU commission is bringing charges against Apple for selling what EU law defines as different services, for different prices. The problem is most of the people involved only understand things in terms of analogies, like CDs and don't understand that the problem is with EU law and the recording industry's exploitation thereof. Apple has exactly zero power to solve this. If they did as you suggest, they'd simply be misleading people into thinking they had a legal right to download a song, when they almost certainly did not, and as a result Apple would be liable for damages because of their knowingly profiting from this illegal behavior.
Incidently, I agree with the commission on this one. I think refusing to process a credit card tranaction because the card was issued in a different EU state is probably a violation of the single market regulations.It is entirely probable that it is a violation, technically. The problem is that accepting payments from foreign cards is also probably illegal. The EU has created a situation where selling music downloads online, is probably illegal no matter which way Apple chooses to do business. All of this, however, would be a moot point if the EU would simply enforce their own edict that requires the recording companies to offer to sell Apple and everyone else a single license at a single price that applies across Europe, so that the copyright license in Germany and in France were the same service. Right now, under EU law, they are not.