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Tuesday, April 03, 2007
EU Charges Record Companies, Apple On Record Sales

The European Commission has sent formal charges to major record companies and Apple, alleging they are restricting music sales in Europe, a Commission spokesman said on Monday.

European Commission spokesman said agreements between Apple and the record companies violate the European Union's rules that prohibit restrictive business practices.

"Consumers can only buy music from the iTunes online stores in their country of residence and are therefore restricted in their choice of where to buy music, and consequently what music is available and at what price," said Jonathan Todd, European Commission spokesman, in an interview with Reuters.

Apple said it wanted to offer a pan-European store but was hemmed in by the music companies' demands.

"Apple has always tried to operate a single pan-European iTunes stores accessible by anyone from any member state. But we were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us," its statement said.

The Commission's probe grow out of a 2005 complaint by the British consumer group Which?, which said that iTunes purchasers in France and Germany need pay only 99 euro cents ($1.32) for each song they download, compared with the higher 79 British pence ($1.56) paid by those living in Great Britain.

The European Commission said it has sent a Statement of Objections in the past week to Apple and unidentified major record companies.

The world's four major record companies are Vivendi's Universal Music Group, Sony BMG Music Entertainment, EMI Group and Warner Music Group.

The move by the Commission is unrelated to a deal announced on Monday, under which EMI agreed to make its music available online without anti-piracy protection, becoming the first major music group to take the risk in a bid to increase digital sales. It is partnering with Apple's iTunes on the initiative but said it will also work with other digital stores.

The European Commission's Todd said that the Commission does not allege that Apple has a dominant market position, nor does it dispute Apple's right to use digital rights management (DRM) in its downloads.

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