EU alleges restrictive practice in iTunes service

3 Apr 2007

The European Commission has sent a Statement of Objections against alleged restrictive practice in the online music market to the major record companies and Apple.

The Statement of Objections relates to the situation whereby iTunes customers can only buy music from the iTunes’ online store in their country of residence. The commission maintains that as a result consumers are restricted in their choice of where to buy music, what music is available and at what price. It alleges that this violates Article 81 of the EC Treaty’s rules prohibiting restrictive business practices.

Apple operates a series of iTunes online stores in the European Economic Area (EEA) which sell music downloads. The iTunes service verifies consumers’ country of residence through their credit card details. To purchase from the UK store, for example, you must have a credit card issued by a bank with a UK address.

The companies will have two months to defend themselves in writing, after which the commission will make a final decision on the matter. This final decision could potentially comprise fines up to 10pc of the companies’ worldwide annual turnover.

Yesterday, Apple and EMI announced they have struck a deal whereby EMI’s entire digital catalogue of music will be available for purchase on iTunes free of digital rights management, meaning downloads can be played on a plethora of digital music devices, albeit at a higher price of €1.29. The issuing of the Statement of Objections does not relate to this development.

By Niall Byrne