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EU Launches Antitrust Probe Into iTunes 318

Posted by Zonk
from the equal-opportunity-headcrackers dept.
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."'"
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EU Launches Antitrust Probe Into iTunes

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  • by elrous0 (869638) * on Tuesday April 03, 2007 @09:23AM (#18586575)
    At this point, even the dinosaurs of the music and film industry HAVE to realize that the old paradigms can't hold. The old system of distribution are going to HAVE to undergo a MAJOR change in the 21st century. This includes the way music (and, probably, ALL media) is distributed to consumers (the CD is going the way of the dodo bird--face it, deal with it), the way licensing agreements are made (no more having one distribution agreement for one country, a completely different one for another), the way residuals are distributed to artists, etc.

    Region coding, DRM, lawsuits...they are all just desperate ploys--putting fingers in the dike of inevitable change.

  • EU Fines (Score:4, Informative)

    by eldavojohn (898314) * <eldavojohn.gmail@com> on Tuesday April 03, 2007 @09:23AM (#18586583) Journal
    Oh, the EU has fined so many companies for price fixing, I don't even know where to begin--Bayer & Chemtura [iht.com], Siemens [networkworld.com], Dow [cfo.com], escalator firms [bbc.co.uk], Heineken [samba.org], Aventis [in-pharmat...logist.com], animal feed companies [findarticles.com], the Deutsche Post [americanshipper.com], many vitamin producers [foodnavigator.com], Nintendo [buzzle.com] and, of course, the well known case of Microsoft [slashdot.org].

    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 ...
    • Re:EU Fines (Score:5, Insightful)

      by MaGogue (859961) on Tuesday April 03, 2007 @09:33AM (#18586705)
      Hmm, maybe it's the other way around .. maybe it's just the companies aren't used to play by the law.
      • Hmm, maybe it's the other way around .. maybe it's just the companies aren't used to play by the law.

        That's entirely possible. I could conceive very corrupt practices being in place causing the need for these fines and that would explain the number of them immediately after the EU formed. However, I read stories about delayed launches of Xboxes or PS3s and it's all in the name of the consumer ... or is it? I mean, you could be saying, "Thank god that they're protecting the consumer from price fixing" y

        • by Khazunga (176423) *

          I honestly don't think it should be but that's just me. I think Apple had the option to work this one of two ways and now the government is making that decision for them.

          You must be very very young my dear. Having lived a bit longer and experienced the alternative, where national governments and companies fixed import taxes and regional prices the way they wanted, I can assure you: If companies have their go, consumers get raped all the way to the bank.

          • by eldavojohn (898314) * <eldavojohn.gmail@com> on Tuesday April 03, 2007 @11:28AM (#18588601) Journal
            King Khazunga: You must be very very young my dear.
            eldavojohn: Man.
            King Khazunga: Man, sorry. What knight lives in that castle over there?
            eldavojohn: I'm 24.
            King Khazunga: What?
            eldavojohn: I'm 24. I'm not very very young.
            King Khazunga: Well I can't just call you "my dear".
            eldavojohn: Well you could say "eldavojohn".
            King Khazunga: I didn't know you were called eldavojohn.
            eldavojohn: Well you didn't bother to find out did you?
            King Khazunga: I did say sorry about the "very very young my dear", but from behind you looked...
            eldavojohn: What I object to is you automatically treat me like an inferior.
            King Khazunga: Well I am king.
            eldavojohn: Oh, king eh? Very nice. And how'd you get that, eh? By exploiting the workers. By hanging on to outdated imperialist dogma which perpetuates the economic and social differences in our society.
      • Re:EU Fines (Score:5, Insightful)

        by 99BottlesOfBeerInMyF (813746) on Tuesday April 03, 2007 @09:42AM (#18586835)

        Hmm, maybe it's the other way around .. maybe it's just the companies aren't used to play by the law.

        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.

        • Re:EU Fines (Score:5, Insightful)

          by Carewolf (581105) on Tuesday April 03, 2007 @09:47AM (#18586891) Homepage
          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.
          • Re:EU Fines (Score:4, Insightful)

            by Thrudheim (910314) on Tuesday April 03, 2007 @10:30AM (#18587541)
            It seems to me that you have anti-Apple eye glasses. Your assumption is that Apple somehow prefers the current system and that their comments are just spin. That doesn't hold up to logic. It would be far simpler for Apple if they could run a single European store. Having to cut individual deals for each country with all the relevant parties in each country had to have been a huge pain in the arse, but Apple didn't have a choice if it wanted content. That's the way the music deals have been made for decades. I seriously doubt that Apple's margins differ much across countries. Their margins on iTunes sales are not that large in any event. The differences in pricing come from the pricing differences that the music wholesale prices charged by the labels. If the the EU finds proof to the contrary, then naming Apple makes more sense.

            The difference now is that the internet breaks down borders, making the complexity of the old system and the resulting differences in prices readily apparent. So, yes, the EU needs to come to grips with technological change and make companies comply with EU rules. I understand why Apple is named in the suit. They are the number one seller of digital music, but the brunt of the legal action should be directed at the music rights-holders. They are the ones that need to bring cross-border consistency to their system of royalties and pricing. There is no reason to believe that Apple would oppose this in any way. Having a single EU deal would greatly reduce the complexity of running iTunes.

            Case in point. When Apple first opened its iTunes store in the UK, a consumer group filed a complaint about price gouging. They were comparing the difference in prices with France, if I recall. The assinine thing about the complaint, though, was that Apple's price for digital downloads was cheaper than any other major player in the UK at the time (considerably so if I recall). The point is they complained that *Apple* was price-gouging, when the underlying cause of the problem was that ALL music being sold in the UK was more expensive. iTunes just made the price differences more absurd since the internet does not care about political lines on a map or differences in legal systems.

            • Re: (Score:2, Offtopic)

              by 0xdeadbeef (28836)
              You can't do business with mobsters without getting your own hands dirty.

              Let it go. Apple is a corporation, it does not love you.
        • just think of the outcry if Apple charged 57% more for iTunes for customers that live in California versus those that lived in Nevada and had a different prices for each USA state.

          this is the situation in europe. The countries are all 'states' within a unified europe, akin to the united states of america. European "countries" share a currency (except a minority) and share a common legal platform.

          Quite why a digital downloaded product has such a differential is beyond me - the iTunes servers are offsho

          • Re: (Score:3, Interesting)

            by Blakey Rat (99501)
            just think of the outcry if Apple charged 57% more for iTunes for customers that live in California versus those that lived in Nevada and had a different prices for each USA state.

            this is the situation in europe.


            Ok... now explain what's *wrong* about it. In fact, given the increased taxation in California compared to Nevada, I'm mildly surprised that situation doesn't already exist.

            I think Apple should be able to charge whatever the hell they want in whatever locale they want. Just giving a little analogy w
            • Re: (Score:2, Insightful)

              by NotDeadMeat (529910)

              Ok... now explain what's *wrong* about it. In fact, given the increased taxation in California compared to Nevada, I'm mildly surprised that situation doesn't already exist.

              I think Apple should be able to charge whatever the hell they want in whatever locale they want. Just giving a little analogy without telling me what you're arguing against isn't going to convince me otherwise. And the EU's constant harassment of American companies is getting downright ridiculous. If European companies can't compete on

            • Re:EU Fines (Score:4, Informative)

              by rapiddescent (572442) on Tuesday April 03, 2007 @10:56AM (#18588019)
              in terms of "what is wrong", there is a big political debate in the UK at the moment about "rip off britain" where many commodity items and digital products are typically charged 50% more than other countries. This is the reason why there are so many stories like this going around. The BBC managed to really embarass Bill Gates on Microsoft Vista launch day asking why Vista was twice the price compared to the USA and (illegally) more expensive than France. Bill Gates was obviously poorly informed by his staff and answered poorly.

              Also, from a legal point of view; EU member states have a trade agreement that used to be called the "common market". This means that a consumer in Italy, should not be prevented from buying a product at the same price as a German or a Brit. This is why Europpeans can shop around the EU looking for the cheapest prices for products - e.g. Italians buying Mercedes in Germany, Brits buying fags (cigarettes. please!) from France and Spaniards buying mobile phones from the UK.

              Any company that prevents cross border trading, is breaking the law. The problem with iTunes, is that it does not allow a Brit to buy at French prices and so on because the user is registered in their home country and is forced to buy at the domicile prices. This restriction only happens on digital products because physical products can easily be purchased in the country of ones choosing by showing up and buying the stuff over the counter.

              I don't see this as an Anti-USA argument - it is an EU problem with the subsidiuaries of Apple, such as Apple UK and Apple DE etc not co-operating and profiteering in an illegally segmented market.

              hope that helps,

              rd

            • by Khazunga (176423) *

              I think Apple should be able to charge whatever the hell they want in whatever locale they want. Just giving a little analogy without telling me what you're arguing against isn't going to convince me otherwise. And the EU's constant harassment of American companies is getting downright ridiculous. If European companies can't compete on their own merits, they shouldn't be using the EU as their instrument to "get revenge" or whatever the hell's going on here.

              It's only harassment of American companies be

          • just think of the outcry if Apple charged 57% more for iTunes for customers that live in California versus those that lived in Nevada and had a different prices for each USA state.

            Just imagine if the US had laws that allowed the record companies to license music for different prices in different states. I'd say if the US was so stupid as to do that, then they're getting what they deserve, just as the EU is getting what they deserve for not actually enforcing their edict to require record companies to provide a single price for licensing in all of Europe.

            The countries are all 'states' within a unified europe, akin to the united states of america.

            In this regard, no they're not. In the US you register a copyright with the federal government and it applies to all of the US

        • by Toby_Tyke (797359) on Tuesday April 03, 2007 @11:05AM (#18588187) Journal
          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.

          • by 99BottlesOfBeerInMyF (813746) on Tuesday April 03, 2007 @11:31AM (#18588641)

            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.

            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.

      • by hey! (33014)
        It reminds me of something my old leftie uncle Ivan used to say. "Kid," he'd say, fixing me with a beady eye,"nobody believes in socialism. Nobody believes in capitalism. What they really want is 'socialism for me, capitalism for you.'"

        This strikes me as being the case for free trade and common markets. People don't really act like they believe in free trade; it's protectionism for me and free trade for you. Workers in a democratic society give up a lot when they agree to give up the protection of tra
    • Re:EU Fines (Score:4, Informative)

      by chrb (1083577) on Tuesday April 03, 2007 @10:07AM (#18587179)
      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.
      • by Blakey Rat (99501)
        "Price discrimination" makes no sense. Unless the EU is under the illusion that the cost of living in London is the exact same as the cost of living in, say, some small hamlet in Germany, there's no possible way that Apple could charge the same price to each customer.

        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?

        Apple doesn't, but most retail stores already do. The cost of living in Iowa is much different tha
        • by Macthorpe (960048)

          the EU is under the illusion that the cost of living in London is the exact same as the cost of living in, say, some small hamlet in Germany
          Are you under the illusion that the cost of living in a small village in Somerset is the same as the cost of living in Berlin?

          You should probably compare like for like, it's more logical.
        • by Khazunga (176423) *

          Apple doesn't, but most retail stores already do. The cost of living in Iowa is much different than the cost of living in the Bay Area, California. I'd expect that goods and services would be cheaper in Iowa, possibly even half the price... it makes perfect economic sense. The EU viewpoint doesn't make any sense... it punishes poor areas by raising their prices and subsidizes prices for rich urban areas.

          You're getting it wrong. There's no penalty for regional pricing. That's common practice over here

      • by Thrudheim (910314)

        As an aside to the Americans who think this is an example of EU socialism bashing a successful American company, consider this:

        The last time I checked, EMI, BMG and Vivendi Universal were European companies. They have been charging different prices across EU countries long before Apple opened the iTunes store. The EU, apparently, did nothing about this. Apple has to cut deals with these companies to get content. Apple is a big player in digital music, but it is still only a tiny player in terms of the

    • by Don_dumb (927108)
      Well I reckon that the EU is in the strong position here. iTunes sales in the US are 10%, presumably iTunes sales would be similar in the EU. I dont think that Apple is the wrong doer here, (it's the music industry as usual) but I dont think their defence is particularly strong "they told us we had to agree to break European law"

      If the EU demands that Apple harmonize its pricing, then Apple breaks its agreement with the record companies, so the agreement will have to change. Now you might say that the musi
    • Levying fines is a lot easier than the EU getting off their ass and actually, you know, rescuing those 15 EU citizens illegally captured by the Iranians. Or at least maybe talking about maybe doing something... maybe.
  • Good! WTO next? (Score:4, Insightful)

    by Fjan11 (649654) * on Tuesday April 03, 2007 @09:23AM (#18586597) Homepage

    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.

    • by zentinal (602572)

      Fjan11 said, "Within the US would you be allowed to charge someone from, say, NY a different price than someone from NJ? (apart from tax & shipping?)"

      Not only is it allowed to have different prices for the same product in different states, but also for the same product in different counties, different cities, different blocks, or different addresses in the same block. This works, as long as people are able to shop around and freely purchase at the lowest price. The problem then is the contractural r

      • The problem then is the contractural requirement that iTunes customers can only purchase from the iTunes store for their own country.

        But there's no requirement to purchase from iTunes at all, and Apple doesn't have a monopoly on 1) music, or even 2) online music. This can onlt be considered a monopoly if you restrict the domain of competition to iTunes itself, which is of course an Apple product. Not to mention which, one can easily burn/re-rip anyway to get music in whatever format you desire. To me,

      • by LO0G (606364)

        Not only is it allowed to have different prices for the same product in different states, but also for the same product in different counties, different cities, different blocks, or different addresses in the same block. This works, as long as people are able to shop around and freely purchase at the lowest price. The problem then is the contractural requirement that iTunes customers can only purchase from the iTunes store for their own country.

        W.R.T. your assertion of pricing differently based on "differen

    • "It always seemed wrong to me that you could blatently discriminate customers on the basis of their nationality[sic]."

      Why, exactly? Don't you think that there could be a legitimate basis for charging someone a different price based upon one's place of residence? A country might possess high tariffs against a good or service, high taxes on that good or service, or it might not be as economically feasible to sell your product there due to any other number of factors. To suggest that such economically-sound d

    • I don't know about an online store, but national US chains do charge different prices in different states. Products tend to be cheaper in lower income regions of the US. It doesn't really make sense to hold prices constant while allowing average income to differ.

      If the EU wants the music labels to set a standard EU price, expect that price to be higher than what it currently is in lower income countries in Europe. Sure the UK might get a price break, but music will be less affordable than it currently is in
      • by Khazunga (176423) *

        I don't know about an online store, but national US chains do charge different prices in different states. Products tend to be cheaper in lower income regions of the US. It doesn't really make sense to hold prices constant while allowing average income to differ.
        The question is not about regional pricing. That's ok by EU law. The question is about enforcing the pricing by forbidding customers from shopping in other countries.
    • by adavies42 (746183)

      Would you be allowed to charge someone from, say, NY a different price than someone from NJ?

      Have you ever been to New York?

    • Within the US would you be allowed to charge someone from, say, NY a different price than someone from NJ? (apart from tax & shipping?)

      This is allowed, just not tolerated by most consumers. They'll raise a stink about it, but there is nothing legal to prevent differential pricing by location.

      The EU is trying to normalize standard-of-living and currency value across all member nations, and pricing regulations are one of the methods they use.

      It's not about preventing discrimination per se, but about n

  • Last night, I had dinner at a friend's house. The family is from Italy. They had purchased for a nephew (in Sicily) an Itunes card and sent it over. He had just called yesterday wondering why he couldn't use the card in Italy. I told them that I had no idea as I would never purchase from Itunes, but that I'd investigate.

    I get into work, and voila! /. has the story I need and the answer.

    Thank you slashdot - you've saved me some legwork.
    • by Macthorpe (960048)
      You're welcome ;)
    • by Lars T. (470328)

      Last night, I had dinner at a friend's house. The family is from Italy. They had purchased for a nephew (in Sicily) an Itunes card and sent it over. He had just called yesterday wondering why he couldn't use the card in Italy. I told them that I had no idea as I would never purchase from Itunes, but that I'd investigate.

      I get into work, and voila! /. has the story I need and the answer.

      Thank you slashdot - you've saved me some legwork.

      He should be able to go to the iTS of [whereveryouare] and claim it there.

  • by rob1980 (941751) on Tuesday April 03, 2007 @09:27AM (#18586633)
    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.
    • Re: (Score:2, Insightful)

      by palmer64s (1049988)
      The laws of the land including copyright laws, and Apple can't sell downloads if the copyright holders don't grant them that right.

      The ball is clearly in the court of the record companies.

    • by cowscows (103644) on Tuesday April 03, 2007 @10:26AM (#18587487) Journal
      It looks like Apple's sort of stuck between two sets of laws that don't mesh well, and the only way to avoid running afoul of either set is pack up their stuff and leave.

      Is that the "right thing" that Apple should do? While having a fractured and confusing jumble of iTMS's is not the perfect solution, if the alternative is no iTMS, is that really any better for the citizens of the EU? Or are you suggesting that they just sell whatever music wherever, and get sued by all the music copyright holders? What other choices do they have? Send a bunch of lobbyists to try and get legislative changes? Is that a good solution?

      The record companies are the ones who really should change their priorities. And the EU should be hassling them. If Apple shuts down iTMS Europe, then the EU is just going to end up stuck with the same problems with whatever store tries to take its place.
      • Re: (Score:3, Interesting)

        by Khazunga (176423) *

        The record companies are the ones who really should change their priorities. And the EU should be hassling them. If Apple shuts down iTMS Europe, then the EU is just going to end up stuck with the same problems with whatever store tries to take its place.

        And what better way to pressure labels? Add declining CD sales to the EC ban on regional price enforcement for online sales, and you'll observe that the labels won't let iTMS 'pack up and go'. They'll concede.

      • Re: (Score:3, Insightful)

        by mpe (36238)
        Or are you suggesting that they just sell whatever music wherever, and get sued by all the music copyright holders?

        Except that these copyright holders would have to sue Apple in the EU. Sueing someone for obeying the "law of the land" isn't exactly the best of ideas.
    • fuck the RIAA.
      To quote the Futuristic Sex Robotz:
      Fuck the R I - double A
      Fuck the M P - double A
      Fuck the suits in the BSA
      Fuck 'em all for the DMCA
  • Good (Score:5, Informative)

    by EnglishTim (9662) on Tuesday April 03, 2007 @09:31AM (#18586685)
    UK iTunes customers currently pay 79p per track. That's the equivalent of around $1.50.
  • 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.
    And what about DVD zoning, which has been around for years?

    Oh, of course, DVDs are different.
  • Yeah, and I can't buy anyhthing from iTMS Japan either. That's not Apple's fault, it's the fault of the record labels (and the media industry in general) that they want to carve up territories like that.

    However, I suppose they do have a point in that according to EU laws, the same songs should be available in all of EU (I'll guess they aren't), and maybe the whole EU area should be treated as one region (with half a dozen primary languages). Again, if the music companies are telling them to restrict certai

    • by MooUK (905450)
      If I tell you to do something that is against a rule or law, are you blameless?
  • Admittedly I probably don't know as much about the EU as I should, but the biggest question for me is what happens to all this money? Is it essentially garnered to ensure the bureaucracy lives on forever?
  • I think Apple has the taint of evil for it's pushing of DRM and lock in's to it's hardware.
    I think the EU is silly for how it tries to legislate things, and often causes itself undue issues.

    Who am I supposed to be snarking at on this topic?
    • Say what? [rollingstone.com]
      • by Churla (936633)
        Jobs can come out now and say he's against DRM. That's because riding the inherent lock ins that went along with iTunes/iPod have already done their job.

        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... Se
        • by Lars T. (470328) <Lars DOT Traeger AT googlemail DOT com> on Tuesday April 03, 2007 @11:02AM (#18588133) Journal

          Jobs can come out now and say he's against DRM. That's because riding the inherent lock ins that went along with iTunes/iPod have already done their job.

          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.
  • What is not clear from the article, is whether it is the music companies driving the division, or if it is Apple. If it is the music companies, they are the ones the EU should be looking at. If it is Apple, then... if it is both, that is collusion. It doesn't help that Apple has yet to respond to the EU's questions. That might clear up a lot of stuff. In the meantime, Appleytes can gather and press for boycotts of EU goods if they like, but it would help if Apple responded to the EU's request for informatio
    • by Budenny (888916)
      It makes no difference. The one legally responsible is the one operating the sales outlets. If I am a car dealer, I cannot refuse to sell to someone from another country. If I reply that the auto maker made me do it, the auto maker will get busted too. If you engage in conspiracy to commit anti competitive behaviour, both parties are busted. Makes no difference whose idea it was.
  • by Stevecrox (962208) on Tuesday April 03, 2007 @10:12AM (#18587273) Journal
    How is this hard to understand? If I want to buy music in the EU then Company A can't sell it to france for say 99p and then prohibit me from buying from their french store forcing me to buy it in the UK one at £1.29. I can goto france and buy a DVD bring it home and play it on my UK DVD player. Itunes store activily stops me from buying from the French store, its price fixing. Apple can talk about how the music store won't let them, well sorry thats the local law if you cant obey it then you shouldn't be doing it. The EU simply expects Apple to let me use the french store and the frenchies use the UK store, it doesn't expect EU members to be able to access non eu member stores. So I still won't be able to use the USA store, I don't know about you but I think price fixing is bad, this is deliberate price fixing "because the record company's are forcing us" if thats the case I'd expect a anti trust case against the record companies next.
  • The case - European Comission (EC) v. Apple v. RIAA - in my head immediately was associated with good old movie.

    The bad, the good and the ugly.

    Badness of EC with all its accounting fraud mess is certain. Goodness of Apple is questionable, but in the party it definitely stands out. RIAA is part of deal since Apple here is retailer only (though still as retailer may bear responsibilities before consumers). And "ugly" is only descriptive adjective I can find for RIAA.

  • by Budenny (888916) on Tuesday April 03, 2007 @10:17AM (#18587361)
    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.

    • by 99BottlesOfBeerInMyF (813746) on Tuesday April 03, 2007 @11:46AM (#18588859)

      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.

      Okay, suppose you're Apple. BMG agrees to license you to make a copy of a Frank Sinatra song within France, providing you pay the $0.30 every time you do so. They agree to let you make a copy of the same Frank Sinatra song within Germany for $0.40 every time you do so. The act of making a copy is the act of allowing a person to download it and is dependent upon where the person doing the downloading is located. EU law enforces copyright separately in each country and just because you licensed the right to make a copy in France for $0.30 each copy, that does not grant you any right to do the same thing in Germany at any price.

      So you offer these songs for sale, with one Website per country and one price per country. Now, because of billing you are given extra information about the likely whereabouts of the downloader. If a person goes to the french store and uses a German credit card, the courts are likely to rule that you (Apple) should reasonably know they are actually in Germany. This means if you let them download the song after paying for a license to make a copy in France, while you know they are probably in Germany, you're just committed an act of copyright infringement and failed to perform due diligence.

      So what exactly do you expect Apple to do? According to EU law the right to make a copy in Germany is different from the right to make a copy in France. If you allow the download with the credit card you've broken copyright law in Germany. If you don't you're running afoul of the EU competition laws. Either way you're breaking the law somewhere.

      To further confuse matters, the record companies have nothing stopping them from providing you with a license that applies in all EU countries as a single license. They just don't want to and while the EU commission ordered them to do so, they ignored the order. Can you see where I might consider both the record companies and the EU the problem here. The record company can solve this by offering the license needed. The EU can solve this by forcing them to do so. Apple and all the other services, however, have no ability to force anyone to do anything. They could choose to close up shop in the EU entirely, or they can break one of the two laws.

      • by meringuoid (568297) on Tuesday April 03, 2007 @01:32PM (#18590485)
        Okay, suppose you're Apple. BMG agrees to license you to make a copy of a Frank Sinatra song within France, providing you pay the $0.30 every time you do so. They agree to let you make a copy of the same Frank Sinatra song within Germany for $0.40 every time you do so. The act of making a copy is the act of allowing a person to download it and is dependent upon where the person doing the downloading is located. EU law enforces copyright separately in each country and just because you licensed the right to make a copy in France for $0.30 each copy, that does not grant you any right to do the same thing in Germany at any price.

        Only because BMG says it doesn't grant the right. The EU says nothing on the matter. BMG can say 'We sell this licence which is good for all EU territories. In Germany we sell it at $0.40. In France we sell it at $0.30.' That would be legal. Of course savvy Germans would then buy the cheaper French licences, which is the point of having the single market and the single currency.

        If the licence sold in France is not valid in Germany, that is entirely the record company's doing. Hence this investigation into these companies, and Apple for contributory infringement of the EU citizens' rights.

  • So are they now going to go after Amazon.co.uk for refusing to sell me (in Italy) electronics? The fact is that corporations always have, and always will, do what they can to restrain free trade (DVD region coding, anyone?), while at the same time the politicians they've bought and paid for are telling us we should fall to our knees and worship the free market and its magic, invisible hand.
      If I were Apple I would want one store - worldwide. Good luck with that.
  • Update: [forbes.com]

    The European Commission said the focus of its antitrust inquiry into the pricing of songs on Apple Inc's iTunes online music store will be major music companies.

    The emphasis on the groups was outlined by a spokesman for EU competition commissioner Neelie Kroes to reporters here.

    However, he added that Apple (nasdaq: AAPL - news - people ) is also included in the investigation as the 'operator' of the service.

  • Apple is claiming that they cannot distribute the music because the actual labels have agreements in place that only permit certain music to be distributed in certain countries. While this is true, the EU knows that under WTO rules, this practice is no longer defensible. Sure you can write a contract that makes the restriction, but it can no longer be enforced. The same with DVD region codes.

    Companies that distribute for media companies, produce players and software, etc that enforce various region-based ma
  • by GauteL (29207) on Tuesday April 03, 2007 @10:43AM (#18587779)
    The current way the iTunes Music Store operates with territorial sales is clearly illegal in the European Union which is based on free flow of goods, services and money. This is one of the most fundamental reasons for the existence of the EU.

    On the other hand Apple would not be able to run the music shop if they hadn't agreed to operate in this way due to refusal from the record companies.

    I assume that Apple knew full well that the current way was illegal and started operating like this anyway. They were either prepared to pay some fines as part of the cost of doing business, or they believed that by the time the EU started fining them they would be in a much stronger position to force the record companies to agree to operate legitimately. The last reason is IMO quite morally acceptable, but still illegal.
  • It really sucks to be in Apple's shoes right now, but in some ways, it serves them right for making a deal with the devil.

    Apple didn't have much of a choice. If they would have followed the law, they would have been in breach of contract and brought to court in a lawsuit. But by following their contracts, they end up in court in violation of some anti-business law.

    Really sucks to be them.
  • Apple know full well that if a contract clause is unlawful, they are under no obligation to abide by it. And it seems pretty clear that any clause the music publishers put in about market segmentation within Europe is unlawful. Their legal guys should have spotted this years back.

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