EU Launches Antitrust Probe Into iTunes 318
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."'"
Re:good old EU (Score:5, Insightful)
Realizing that the UK is getting ripped off yet again the EU tries to do something about it
Once again we see the problem of the old system (Score:5, Insightful)
Region coding, DRM, lawsuits...they are all just desperate ploys--putting fingers in the dike of inevitable change.
Good! WTO next? (Score:4, Insightful)
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.
Correct me if I'm wrong... (Score:5, Insightful)
Also, fuck the RIAA.
Re:EU Fines (Score:5, Insightful)
Re:Good! WTO next? (Score:2, Insightful)
Re:EU Fines (Score:5, Insightful)
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)
Apple has the spin angle of claiming to work with the EU to force the music cartels to open up.
Re:Correct me if I'm wrong... (Score:2, Insightful)
The ball is clearly in the court of the record companies.
Re:Good (Score:1, Insightful)
Re:Once again we see the problem of the old system (Score:5, Insightful)
Re:Correct me if I'm wrong... (Score:5, Insightful)
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:EU Fines (Score:4, Insightful)
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:good old EU (Score:5, Insightful)
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!"
Re:EU Fines (Score:2, Insightful)
The problem is not that Apple charge different prices in different stores. The problem is that they prevent people in one country from purchasing music in another countries iTunes store.
The EU is meant to be a single common market, without restrictions on where people from one country can buy stuff. If it's cheaper to buy a car in Germany than in France then there shouldn't be any barrier preventing a frenchman from going to Germany to buy a car. Similarly if music from iTunes is cheaper in France than the UK there shouldn't be any barrier to someone from the UK going to the French iTunes site to buy their music.
Re:Apple "pushing DRM"? (Score:5, Insightful)
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?
Since no ones seems to grasp what this is about... (Score:5, Insightful)
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.
Stop blaming the contract (Score:2, Insightful)
Re:Easier than taking on Iran (Score:3, Insightful)
One of the nicer "guarantees" about living in the US is that if you get stranded somewhere, or in a bind, the US Government will do all it can to get you out... regardless of why you were there. Whenever a revolution or violence starts up in some country, the first thing you hear about is how the US is trying to find and evacuate all US citizens to someplace more stable.
If I lived in the EU, and I found that the EU doesn't give a flying whit whether you were captured by extremists or not, I wouldn't feel very confident.
Re:Good! WTO next? (Score:1, Insightful)
Re:Lots of misunderstandings here (Score:5, Insightful)
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.
Re:EU Fines (Score:3, Insightful)
I seriously doubt Apple would care. The labels would, obviously. Don't know what would happen to the deals between Apple and the labels in such a case.
Re:good old EU (Score:3, Insightful)
There's nothing wrong with being a large part of the market. It's if you abuse that monopoly that deserves prosecution. Like when Microsoft threatened OEMs not to sell competing products on their computers or face raised Windows license fees. Because Windows owned the market, OEMs had to play along.
Apple doesn't do that with the iPod. Stores can sell whatever they want. Consumers have chosen the iPod, and a few Euro-socialists want to feel clever by hating success, as though it's their duty to "even out" the market. Fuck that.
Re:Correct me if I'm wrong... (Score:3, Insightful)
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.
Re:EU Fines (Score:3, Insightful)
In, which case they are almost certainly breaking copyright law in the country of the downloader.
I can travel to france, buy a french cd and bring it back to germany with me. Perfectly legal. I bought the cd in france under french copyright law.
Now, if the server stands in france, a french credit-card-handler is used for payment, am i buying my digital music in france? If yes, it's a great day for all people, because then there will be vast competition within the EU (and allofmp3.com would be legal
Re:good old EU (Score:2, Insightful)
Re:good old EU (Score:3, Insightful)
Apple can try to defend itself using other tactics, but invoking the contract with the labels won't stick for sure. The EC regards only how the product is presented to the consumer, it does not deal with how the company came to get hold of it. From the EC point of view, Apple is enforcing regional discriminatory pricing for goods, which is something strictly forbidden by the Rome Treaty.
They can use discriminatory pricing, but they can't forbid me, a Portuguese, from purchasing a song from the German iTMS. Not that I could do that, they speak gibberish out there ;-)
But the thing is that Apple want to lose this case. They'd much prefer to run a single store with every song available everywhere in Europe. It's a lot less administration and they don't like having to explain why songs are available in the UK but not in Ireland (no free single of the week for us either).
The record labels mostly don't care either. They get paid either way. It's the distributors that are the ones at fault. If Apple could have they would have started selling music worldwide from day one. It's obvious. Video is an even bigger thing. But Apple had to agree when the labels insisted -- under pressure from the distributors -- to these measures because they couldn't exactly sue the labels while begging them to allow music to be sold online.
This is perfect. If Apple lose they are forced to sell music to people they're not allowed to. Distributors don't really have much place in the iTS model. They're anachronistic middlemen. The EU are now threatening to get rid of their influence. Break out the champagne!
Remember it's the distributors who held up iTS Australia and Japan, even recently. DRM was always an inconvenience to Apple. It's fundamentally a restriction and it can only decrease the user experience. The fact that they find DRM distasteful is why they're far and away the best at selling it. With Apple it's always been about as little restrictions as they can get away with.