2nd Jun 2020

EU targets Apple and record firms in downloading probe

The European Commission has started a legal battle with consumer icon Apple and major record companies, saying their agreements on how to sell online music in Europe violates the freedom of consumers.

"Consumers can only buy music from the iTunes' on-line store in their country of residence. Consumers are thus restricted in their choice of where to buy music," Brussels said in a statement on Tuesday (3 April), citing article 81 of the EU treaty prohibiting restrictive business practices.

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"In order to buy a music download from the iTunes' Belgian on-line store a consumer must use a credit card issued by a bank with an address in Belgium," the commission explained.

Under the current sales structure, customers who live in the eurozone pay €0.99 cents per song they download. But Apple customers in the UK, which uses the pound sterling, pay €1.17, while people in Denmark, which uses the kroner, pay €1.07 per tune.

EU officials took pains to stress its objections do not relate to Apple's dominant position in the EU online music market or the way it uses security software to limit the type of MP3 players its customers can use to play songs they buy.

The "statement of objection" sent by Brussels could see the US firm defend its actions in an oral hearing two months down the line, with the Californian company facing fines of up to 10 percent of its global turnover if it loses the case.

Based on first quarter 2007 earnings, Apple currently has a turnover of about €21 billion a year. It controls 70 percent of the global music download market, with its sleek, white iPod MP3 player visible on just about every city street in Europe today.

"We don't believe Apple did anything to violate EU law,'' the company said in its counter-statement, Bloomberg reports. "We will continue to work with the EU to resolve this matter.''

"Apple has always wanted to operate a single, pan-European iTunes store 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," the company added.

The EU objections are also targeted at the world's "major record companies" the European Commission added, without naming the other firms in question.

The world's biggest music firms are Vivendi's Universal Music Group, Sony BMG Music Entertainment, EMI Group and Warner Music Group.

"Our current view is that this is an arrangement which is imposed on Apple by the major record companies and we do not see a justification for it," commission spokesman Jonathan Todd said, Reuters reports.

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