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."'"
Slashdot Loves Apple! (Score:4, Interesting)
Re:EU Fines (Score:3, Interesting)
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 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.
Important development (Score:3, Interesting)
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.
Re:good old EU (Score:3, Interesting)
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 ;-)
Re:Correct me if I'm wrong... (Score:3, Interesting)
Re:good old EU (Score:2, Interesting)
1) The Commission has now confirmed that their target is not Apple, but the labels, but Apple has to be joined to the case, because it is the supplier/agent of the labels.
2) This is indeed a single market issue. It is not illegal to sell products at different prices in different EU states, but any EU resident has the right to buy that product in any of the states, if they pay the local rate of value-added (ie sales) tax (VAT), and for their own use (ie not for commercial resale), and import it into his own country without further tax. (There are separate arguments over whether a pickup full of French bought wine coming into the UK can possibly be for non-commercial personal use, but the principle is clear, and clearly covers buying a few albums of down-loaded music). I can buy CDs by mail order in France and have them posted to me by the retailer. And it has absolutely nothing to do with DRM.
3) In principle therefore, iTunes should be able to have a single EU wide operation, based in any EU country, paying VAT at the local level, and corporate taxes to the local government. As noted above, they have in fact located the iTunes Europe operation legally and corporately in Luxembourg, but the actual operations (servers, content handling, promotional activities such as free or advance downloads etc) could easily be somewhere else: Luxembourg has a long history of lawyer-led company registration.
4) But the different countries in the EU still operate different rights management systems, and the labels treat them as different markets and have presumably refused Apple the single store option, leaving them between rock 1 and hard place 1: if they were to sell at all in the EU, they had to do it on a country by country basis. That might have been OK (in EU terms) if they had allowed me (in the UK) to buy a record by a Galician folk-rock bagpiper not released on their UK store from the Spanish one, but their credit card handling processes (in the same way as for a Canadian trying to buy from the US store) in practice block me. Whether that was a careless carry over of the existing North American model, or the result of specific pressure from the labels, only access to the emails will tell. Possibly it was a trap set by Apple for the labels, to provoke just the Commission action we are finally seeing, to give them the benefits of a single operation, and cutting out some of the overhead on what we all are told is at best a marginally profitably operation.
5) So a simple answer may be simply for the Commission to order Apple to accept any EU credit card in any EU iTunes store. This would do for me. And may be the initial ruling from the Commission, against which the labels and or Apple would have to appeal, but could have no obvious grounds for doing.
6) But the big fish for the Commission is probably the single market in recorded music rights, which would inevitably lead to similar provisions for performing and broadcasting rights. This could be more controversial, in part because it might trigger the French national neurosis about protecting their cultural/linguistic special status, and the right to subsidise French artists, and to insist on a certain proportion of French-produced content on radio and TV. And as noted somewhere above, it's not a long way then to film and other video rights. That promises to be a real earner for the lawyers, and to take a pretty long time.
IANAL