European Commission investigates Apple's European prices

The representatives of the European Commission (EC) had a closed meeting
last week with Apple and other four major record companies, regarding the
different pricing schemes used in different countries in Europe.

The meeting should have lasted for two days, but two record companies EMI
Group and Warner Music Group decided they didn’t need to show up in the oral
hearings, considering the EC had been “persuaded that they are not
responsible for how Apple prices songs”. Therefore the meeting lasted just
one day with Apple’s iTunes global president Eddy Cue and general counsel
Donald Rosenberg that joined Universal Music and Sony BMG.

According to a Reuters source, an Apple representative said during the
meeting that “there was nothing in its contract with Universal obliging it
to operate national stores or to set a higher price in countries such as
Britain. Apple, according to the observer, said it had made unilateral
decisions, in part because doing business in Europe turned out to be more
complex than in the United States.”

But Steve Jobs, that was present at the iPhone’s German launch in Berlin had
a conciliatory tone on this topic: “We think prices should be the same. We
think anybody in Europe should buy off any store.”

As previously reported by EDRI-gram, EC main concern is that “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, and
consequently what music is available, and at what price. The Commission
alleges in the Statement of Objections that these agreements violate the EC
Treaty’s rules prohibiting restrictive business practices (Article 81).”

The case is not related with the Apple’s dominant position in the EU online
music market, its DRM-related practices or its lock down problems
investigated by pro-consumers associations from all over Europe.

The case will now be referred to the competition commissioner Neelie Kroes
that will decide if a penalty should be applied with the maximum being a
fine of 10% of the companies’ global turnover.

Apple and record companies to face Brussels over EU music distribution
(18.09.2007)
http://euobserver.com/9/24787

Apple defends iTunes in Berlin, Brussels (19.09.2007)
http://investing.reuters.co.uk/news/articleinvesting.aspx?type=media&storyID=nL19356655

Apple Blames Labels, Then Taxes For European iTunes Woes; Antitrust
Attention May Intensify (20.09.2007)
http://www.forbes.com/technology/2007/09/20/apple-itunes-europe-tech-cx_pco_0920paidcontent.html

EDRI-gram: Free-DRM music by iTunes, but EC starts official investigation
(12.04.2007)
http://www.edri.org/edrigram/number5.7/ituned-free-drm