EC to investigate cross-border iTunes restrictions

The European Commission is investigating cross-border ecommerce restrictions applied by Apple against its European iTunes user base.

The news follows last week’s revelation that EMI Group is to remove DRM copy protection from its online music portfolio through download outlets such as Apple’s iTunes Store.

The inability of EU-based iTunes users to purchase online music from neighbouring European territories – which all have their own specific iTunes Stores – has led the European Commission to dispatch formal charges to unnamed major record companies and Apple Inc. citing the illegal restriction of music sales across Europe.

“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 Commission spokesman Jonathan Todd in reference to the existing trade deals between Apple and music distributors, which the Commission claims are in direct violation of EU laws governing restrictive business practice.

In response, Apple has issued a statement outlining that while it wished to implement a singular Europe-wide iTunes service for its customers, conditions applied by the music companies have stunted that ambition.

The European Commission’s investigation has arisen following an initial complaint logged by consumer group Which? back in 2005; a complaint that shone the spotlight of contention on the fact that French and Germany-based iTunes Store users were paying €0,99 Euro cents (the equivalent of £0.67 pence in the UK), while UK-based iTunes users were being unfairly hit with a £0.79 pence per song rate.

Subsequently, the Commission has since revealed that a “Statement of Objections” has been delivered to certain as-yet unconfirmed record companies, and, of course, Apple. However, there are also much wider implications likely to form against the legality of restricting cross-border sales in general, physical, virtual, or otherwise. 

If the European Commission (already the bane of non-compliant Microsoft in the interoperability arena) decrees that restrictive business practices are being applied it could consequently gut punch Apple and its partnering music distributors for fines equating to as much as 10% of their global turnover.