updated 06:55 pm EDT, Mon April 2, 2007
Apple may face £323m fine
Despite a landmark agreement with EMI to offer DRM-free music via iTunes, European Union regulators are investigating Apple's iTunes Store for possibly violating competition laws, and said that they object to the Cupertino-based company's practice of forcing consumers to purchase songs from its iTunes Store only in their home country. The European Commission sent a letter outlining the accusations to Apple as well as major record companies -- including Sony BMG Music Entertainment, Universal Music Group, Warner Music, and EMI Group, according to the Associated Press. A spokesman for the EU competition commissioner says Apple's arrangements restrict music sales because "consumers can only buy music from the iTunes store in their country of residence." Companies that breach competition law face a fine of up to 10 percent of annual turnover, which according to the Times Online would total roughly £323 million.
Apple spokesman Steve Dowling said the Cupertino-based company originally wanted to run a Europe-wide store, but music labels and publishers feared legal concerns as well as copyright complications.
"We will continue to work with the EU to resolve this matter," Dowling said.
EMI said it doesn't believe it has breached European competition law, and will make its case strongly to the commission.