EU probe Apple on music download costs

Consumers being restricted

3 April 2007 12:57 GMT / By Stuart Miles

The day after EMI has announced that it will offer Digital Rights Management free songs via iTunes and the honeymoon is over.

The EU has today accused Apple of violating competition rules stating that iTunes songs are not freely available to download across Europe, and that prices vary between countries.

Apple has been given 2 months to reply to formal charges of violating EU competition rules.

According to the Commission, agreements between Apple and major record labels could be violating Europe's strict rules against restrictive business practices.

The European Commission said the focus of its antitrust inquiry, first raised 2 years ago, into the pricing of songs on Apple's music store will be major music companies.

European Commission spokesman Jonathan Todd said that consumers were "restricted in their choice of where to buy music and consequently what music is available, and at what price".

The charges centre on the fact that iTunes prevents users in one country from downloading from one of their websites in another European Union country.

Currently Apple restricts customers accessing the stores depending on country of origin meaning UK customers can't buy goods from the Belgium store for example.

Likewise Apple charge UK customers 79 pence compared to European customers .99 Euro per track, a difference of 12 pence for living 22 miles across the channel.

The Commission has sent Apple a "statement of objections" alleging that its agreements with record labels "contain territorial sales restrictions which violate" EU competition rules.

According to AP, the fines could be as much as 10% of Apple's worldwide annual revenue.

"We don't believe Apple did anything to violate EU law", the company said.

Apple said that while it "always wanted to operate a single, pan-European iTunes store accessible by anyone from any member state", it was "advised by the music labels and publishers that there were certain legal limits to the rights" they could be granted.

"We will continue to work with the EU to resolve this matter", it added.