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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."'"
That should be,
Realizing that the UK is getting ripped off yet again the EU tries to do something about it
thank God the internet isn't a human right.
Region coding, DRM, lawsuits...they are all just desperate ploys--putting fingers in the dike of inevitable change.
SJW: Someone who has run out of real oppression, and has to fake it.
For once the EU seems to be applying one of the more useful laws they made. It always seemed wrong to me that you could blatently discriminate customers on the basis of their nationality. I don't think a judge is going to buy the "record labels made me do it" defence. IANAL, but I just cannot see how that's going to be an excuse.
I wonder if the WTO could also go after them for charging different prices to US and non-US customers. I know there are many other web stores that do that so that's probably allowed. I understand why a marketeer would like to have different prices for different areas but it is just hampering price transparency and free trade.
Within the US would you be allowed to charge someone from, say, NY a different price than someone from NJ? (apart from tax & shipping?) Would any US judge care if you said the record labels made you do that? I think they just price differentiated because they thought they could get away with it.
This sig is just as redundant as the rest of this posting
But "They told me I had to do it like this" doesn't really sound very compelling. You do business on foreign soil according to the laws of the land, and if the laws of the land say you can't change the availability of your product based on locale then don't just hide behind the music industry's rhetoric in order to make a quick buck. Do the right thing.
Also, fuck the RIAA.
UK iTunes customers currently pay 79p per track. That's the equivalent of around $1.50.
Hmm, maybe it's the other way around ..
maybe it's just the companies aren't used to play by the law.
DVD zoning puts all of the EU in one zone, so it doesn't violate EU rules.
Have you ever looked into the situation. It has been years since the EU ordered the different music licensing cartels across Europe to offer a single, pan-european license and those record company groups have ignored them. Now they're demanding Apple charge the same amount in different countries, when Apple pays a different amount in different countries, because the EU has done nothing about their previous edict. It is idiocy. Should Apple raise prices in some places and lower them in others to cover costs and effectively subsidize pricing in some countries with money from customers in other countries? Does anyone believe Apple will still be selling any music in poorer countries when they're forced to raise prices drastically above what CDs cost in those countries?
If the EU wants to be one big economic cluster, great. Pass some fricking laws forcing the record companies to charge one flat license fee for Europe and pass some laws requiring all EU countries to tax music the same. Then if Apple is still charging different prices (something they don't want to do in the first place) you can threaten them with legal action.
The current laws are sufficient, and if you Apple eye-glasses wasn't so narrow you have noticed that the new antitrust case is not against Apple, but against Apple and 3 music cartels.
Apple has the spin angle of claiming to work with the EU to force the music cartels to open up.
This has nothing to do with discouraging businesses from selling games consoles within the EU. The fact is that the EU has a single, regulated market. Price discrimination against customers based on their nationality or location within the EU is illegal. Apple knew this very well (you think they didn't consult their lawyers before opening EU Itunes stores?), and chose to ignore the law. Whatever contracts Apple signed with the RIAA are irrelevant; contracts between companies cannot supercede the law of the land.
As an aside to the Americans who think this is an example of EU socialism bashing a successful American company, consider this: what would your government do if Apple had different stores for each state, or for people of different races, each with varying music and pricing? I doubt you would be so accepting.
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
I think you'll find that the labels are the ones that have set the regional limits and pricing standards. Apple is bound by the contracts the labels were willing to negotiate, and the labels didn't want to negotiate liberal contracts when the iTunes stores were first being set up.
Having to run multiple, mutually exclusive stores is probably a dead loss for Apple all around. There's the massive duplication of effort in making each store run and managing the inventories, there's the effort of barring people in one region from using the store for another region, and there's the dissatisfaction from customers who can't get the music they want if it's only for sale in another region.
Apple runs the iTunes store as a value-added service for the iPod. The more music that's available, and the easier the stuff is to obtain, the more value it adds. How could it possibly hurt Apple to run a single store for everyone in the world, with all the music equally availble to everyone?
Given the track records of the players in question, I doubt that an investigation will find that Apple were the ones who went to the negotiating table saying, "hey, let's waste a lot of resources and piss off a lot of customers by making a patchwork of regional stores, offering different inventories at different prices in each one, and making people in one region wait six months longer to get access to their store than their neighbors 50 kilometers away!"
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.
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Ask him back about the time the iPod was released if he wouldn't rather have an open format which didn't restrict which player you could play your music on after you bought it, and didn't keep you from moving the music around and I am fairly willing to bet you would get a different answer. Or let people use iTunes more easily with non Apple players... See where I'm heading? No, because when the iPod was released, it didn't support any DRM, and the only thing "locking" you to the iPod was that it was one of the first players that could handle AAC.
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
Have you ever looked into the situation. It has been years since the EU ordered the different music licensing cartels across Europe to offer a single, pan-european license and those record company groups have ignored them. Now they're demanding Apple charge the same amount in different countries, when Apple pays a different amount in different countries
Yes, I have looked into the situation, but you obviously haven't, since you completely fail to understand what this case is all about. Apple can charge whatever the hell it wants in each individual country. Want to charge the two euros per track in france and four in germany? Fine.
What the commission is complaining about, and what may very well be determined illegal under EU law, is restricting the sale of French priced tracks only to people with credit cards issued in France. That's what the case is about. If iTunes France wants to charge half the German price, that's fine, but they are not allowed to stop people with German issued credit cards logging on and buying tracks. 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.
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.
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. In the end, of course, that will be for the courts to decide.
"I realise this is not a very popular opinion but it's the truth, and there for needs to be said" -Bill Hicks
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.