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EU targets iTunes after Microsoft legal win

updated 02:55 pm EDT, Mon September 17, 2007

EU targets iTunes

Emboldened by the European Court's rejection of Microsoft's appeal against a 2004 European Commission ruling that declared the company in violation of European anti-trust regulations, the EU is taking square aim at Apple's iTunes according to several reports. Starting this Wednesday, the European Commission will begin holding hearings on the pricing structure of Apple's online store. The basis of the complaint is this: Apple charges different prices to European consumers dependent on their country of purchase. The consequences for a decision against Apple in this matter could be steep: the regulators have the ability to fine companies up to 10% of their global revenue if they are found to be in violation of antitrust law.

The Wall Street Journal reports "So why does the iTunes store charge some Europeans more than others to download a song? In an April WSJ story, Apple blamed the music companies. 'Apple has always wanted to operate a single pan-European iTunes Store accessible by anyone from any member state,' said an Apple spokesman. 'We don�t think Apple did anything to violate EU law.'"

Meanwhile, the EU also blames record labels, apparently considering Apple to be more or less a conduit of the record companies' wrongs rather than an active violator. An EU spokesperson said "this is an arrangement imposed on Apple by the record companies [...] The main focus of our attention is the major record companies."

In June, the EU said that Apple had only two days to respond to an anti-trust charges alleging that the company restricted online sales of music in Europe. The European Commission originally set a deadline of early June for the response, but granted a two-week extension at the request of Apple and three of the four record companies also implicated; the fourth record company had already submitted a written response to the charges. Apple's response was that it has always wanted to offer a standard pricing structure across Europe, but is unable to do so because of record company policy.

by MacNN Staff

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Peter Bonte
Fresh-Faced Recruit

Joined: Aug 2001

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09/17, 03:24pm | report spam | close Reply |
Good

Opening up the European market for all EU country's is a good thing, not Apple's fault and the Commission seem to know this.

ClevelandAdv
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Joined: Jul 2004

0

09/17, 03:29pm | report spam | close Reply |
Music companies

Going Apple over iTunes pricing is like going after a gas station owner over high priced gas.

The problem is, with the European courts they have a good chance of winning this case

Apple could be fined up to 10% of their worldwide revenue! That would amount to a penalty of 150x what they make on worldwide music sales, hardly a fair fine, even if they were guilty.

slider
Mac Elite

Joined: Oct 1999

0

09/17, 03:52pm | report spam | close Reply |
So pass the buck?

So instead of going after the record labels they go after iTunes and put the battle between Apple and the record labels. Seem Apple should just pull out of the European market then and just pass the buck on down to the European consumer. The EU is going after the wrong Apple.

Spacemoose
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Joined: Feb 2004

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09/17, 03:55pm | report spam | close Reply |
Read the article idiots

clevelandadv/slider why don't you take a moment to retract your heads from their warm, moist, caves and read the article:

An EU spokesperson said "this is an arrangement imposed on Apple by the record companies [...] The main focus of our attention is the major record companies."

sixcolors
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Joined: Oct 2001

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09/17, 04:04pm | report spam | close Reply |
f*** the EU

the EU are a bunch of children, crying because the other kids have it better than them. F�cking socialist a$$holes!

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

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09/17, 04:07pm | report spam | close Reply |
..and the computers/ipods

Apple also charges differential prices for their hardware, software. Whose fault is that?

The actual goods are shipped more or less directly from China where they are made, so how come consumers closer to source actually pay more than the USA?

Actually purely software based material such as the music represents a clear case against differential prices. Many shareware companies charge a flat price, the only difference being what you pay for the currency exchange.

Only the majors such as Apple, Microsoft and Adobe charge on a per country basis. In Adobe's case hugely so.

VinitaBoy
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Joined: Oct 2001

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09/17, 04:33pm | report spam | close Reply |
Next Time . . .

The next time Russia, Germany, Iran, Islam, et al. , have a go at the rest of good old Europe, let 'em have it. Get our kids out of Germany, England, Bosnia, Iraq, and all other such h*** holes and bring 'em home. Let the b******* fend for themselves from now on and invent their own operating systems and music services. THEN watch the Euro's value against the dollar.

"Atlas Shrugged" is finally coming home to roost in my mind, at least.

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

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09/17, 05:21pm | report spam | close Reply |
next time...

The next time the USA invades another country to secure its addiction to oil at the behest of corrupt industry monopolies, let it cop the consequences.

Oh it's happened already!

Clive
Mac Enthusiast

Joined: Jan 2001

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09/17, 05:27pm | report spam | close Reply |
jingoistic zealots

They must have some pretty poor schooling in the USA to breed so many jingoistic zealots who are unable to read and understand what is put in front of them.

One day you're cheering on the EU for taking on Microsoft, the next day its as if the EU had declared war on the USA - just because the focus of its attention has switched to Apple. But, what most of you fail to understand is that Apple is breaking EU law - just as it would probably be breaking US law if it refused to sell to some US states.

All that is being asked is that all EU citizens (in fact, anyone visiting or living temporarily in the EU) can choose to buy from whichever Apple outlet they like. If you're in Spain you should be able to buy from the German iTunes store, if you are in the UK you should be able to buy from the Greek store. That's what free movement of goods and services in the EU means.

If you want to trade in that market that's the law you have to work within.

As to vinitaboy's comments, if Apple and Microsoft pulled out of Europe the end result would be more expensive hardware and software for Americans, because the R&D costs would be spread over fewer end-users and a smaller userbase would not generate the same economies of scale.

That would put the US$ in a worse state than it already is, and cost you even more money to buy stuff from China.

Will53
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09/17, 05:33pm | report spam | close Reply |
Pricing

It seems that EU has got it right about Apple, this time, at least when it comes to music. But rubayat puts the finger on a very sore point and I don't understand Apple's policy here: the difference in prices of their hardware. Some of it can be blamed on the varying level of VAT in Europe, but not all. What is most important is that Apple would increase their sales much more than they would lose on pricing their hardware more in harmony with what they pay in the US (and let's forget this childish game about throwing old, tired arguments about wars etc., shall we?). Like in the US, there's an increasing interest around the brand but too many are put off by the prices. If these were equal to the US-prices, I bet a lot more would fall for the temptation and go Mac.

Not to mention Brazil where they charge horrible prices! A MacBook can cost close to twice of what it does in the USA! Now, that is absurd and a sure way to abandon a huge potential market as the country's economy is steadily improving.

Maybe a bit off-topic, but...

Guest
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09/17, 05:34pm | report spam | close Reply |
As a side note...

While I agree that any organization wishing to draw revenue from a country beyond its own borders should be expected to conduct business within the regulations of that country, what exactly gives the EU the right to charge that company 10% of their *global* revenue for an infraction against EU regulations? I could understand a fine based on a percentage of revenues with the union itself, as compensation for perceived damage to the European economy. But how can factoring in revenues from non-EU countries possibly be legal?

Peter Bonte
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09/17, 05:42pm | report spam | close Reply |
@ rubaiyat

Hardware en boxed digital material isn't a problem, we can just buy it in the other country. Only digital content is a problem because the buyer can be restricted to buy everything in 1 country and that is against EU regulations.

Peter Bonte
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09/17, 05:47pm | report spam | close Reply |
@ Guest

The US can charge a company a big fine if it does business with Cuba via other country's or via sister company's, its more political but basically the same.

MuppetFloss
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09/17, 05:55pm | report spam | close Reply |
Whiskey Tango Foxtrot!

How did *politics* ever enter the comments on this one? And where in the world is it possible to imagine 'socialist' is an insult. It's like being called a 'democrat.'

And how can 2 people both be upset and angry because a government is actually representing the interests of the people it governs, even though those interests conflict with the interests of very big corporations. You seem to be saying, hurray for multinational record companies, down with the EU, and down with representative government. Is that it?

Incidentally, the EU *did* invent their own operating system. It's called Linux. And yes, it too is socialist.

urapns
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09/17, 05:58pm | report spam | close Reply |
Pricing

Brazil is expensive because of the import duties placed on the product, this is not something Apple has any say in but something that should be taken up with the Government. As far as regional stores in the EU, the rights to the individual songs can be held by different people in every country...Apple in some cases is forced to negotiate with multiple parties for the same song on a by country basis. Since each one of these parties only controls the pricing in their country they keep Apple from using a pan EU price. The EU needs to get it's act together on copyrights before they go after Apple.

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

0

09/17, 06:31pm | report spam | close Reply |
as an aside...

The truth, unbeknownst to the poorly educated and informed occupants, is that the USA is in decline and will be very quickly eclipsed by China and possibly India.

Most of the trouble we see now is the USA having a mid-life crisis and struggling with its fading dominance, whilst it is still armed to the teeth.

The reason the USA will probably never go to war with China is that even 2 decades ago 90% of all screws and bolts were manufactured there. It would be even worse now and not just for screws and bolts. Soon as the States needed parts for their tanks and planes they'd be stuffed.

Feathers
Grizzled Veteran

Joined: Oct 1999

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09/17, 06:38pm | report spam | close Reply |
war with china?

The reason they can't go to war with China is because 65% of them can't point it out on a map of the world. Fact!

bhuot
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09/17, 06:40pm | report spam | close Reply |
go after MS first

The way I feel about this (and yes I do use Linux too and it was the whole world who worked on it thanks to the Internet which is an anarchy not a socialist rule) is that if Europe wants to do what will be equally damaging to Microsoft than by all mean go after Apple. First, do the only thing that will make Microsoft ever consider following any nations laws - ban all Microsoft products from Europe permanently. Just fining Microsoft a billion dollars is like the library fining a $.10 fine against people who keep their books out too long and is equally ineffective.

bhuot
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09/17, 06:52pm | report spam | close Reply |
Europe as bad as Bush

"The reason the USA will probably never go to war with China is that even 2 decades ago 90% of all screws and bolts were manufactured there. It would be even worse now and not just for screws and bolts. Soon as the States needed parts for their tanks and planes they'd be stuffed."

The reason the US government will fight China, itself, and Europe is that they are all addicted to oil and people in all industrialized countries will fight for to the death for the luxury of personal transportation. You have to realize that most of the US never voted for Bush - the Supreme Court installed him before counting all the votes. Everyone I voted for since I was of age never got elected - if they did, then the US wouldn't have invaded Iraq.

I don't see why the US even under Bush is any worse than the damage Europe has done to the world over the last 500 years. Iraq would never had been in the situation it was if not for the way the British and French divided up the Middle East. And the people who caused the problems in America were mostly of European descent.

MiMiC
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Joined: Jun 2007

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09/17, 07:39pm | report spam | close Reply |
Talk About Ignorance:

I'm not sure how this board entered into a US Bash Fest, but let me address some points here please.

--------- "ext time... The next time the USA invades another country to secure its addiction to oil at the behest of corrupt industry monopolies, let it cop the consequences.

Oh it's happened already! posted by rubaiyat " ---------

rubaiyat, your ignorance of World history, politics, and facts is quite concerning. First, let us remember that Iraq sells the US VERY LITTLE oil and the fact is, it produces very little oil and only by the US will it produce more as we help upgrade their facilities. If you take a look, we import the majority of our imported oil from Canada, Mexico, Saudi, and Venezuela.

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

So educate yourself a bit before speaking- Okay?

--------- Soon as the States needed parts for their tanks and planes they'd be stuffed. posted by rubaiyat ---------

As I recall, we were an industrial nation once. I'm quite sure we can figure it out again.

--------- The actual goods are shipped more or less directly from China where they are made, so how come consumers closer to source actually pay more than the USA? ---------

Um, Tariff perhaps? And I really don't know, but different Countries charge different tariffs.

--------- They must have some pretty poor schooling in the USA to breed so many jingoistic zealots who are unable to read and understand what is put in front of them. posted by clive ---------

Yeah, okay!

--------- But how can factoring in revenues from non-EU countries possibly be legal? posted by guest ---------

AGREED! This is VERY wrong!

--------- ou have to realize that most of the US never voted for Bush - the Supreme Court installed him before counting all the votes.posted by bhuot ---------

Yet another Ignorant statement. If most did not, then how was it contested, thus making it to the SC? Fact is, both received near 50% thus the recount.

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

0

09/17, 08:01pm | report spam | close Reply |
Really off topic

bhout: You may not realise but the cult of the car is not universal nor inbred, but is an artifact of 100 years of non-stop marketing propaganda. largely originating from the USA. As is that for exploitative agribusiness, fattening processed food, unhealthy "labor-saving" consumerism, mindless entertainment and "news" that is indistinguishable from mindless entertainment.

The USA fought to be independent of Europe over 200 years ago, I'd say by now it is responsible for its own actions and corrupt politics.

True the British and French imperialists stuffed up Iraq. It is hard to see how they could have carved up the Ottoman provinces in any way that wouldn't have caused trouble. The Arabs have fractured and preyed on each other at every opportunity ever since.

Most ex-colonies except those which already had a free and democratic culture previously have failed to acquire one.

Since they acquired "independence" many were targeted by the States if they possessed something America wanted. Iran was a classic case, where the USA overthrew a genuine democrat who simply tried to control Iran's own resources. Check the CIA "Fact Book" on Iran and see how that period is neatly omitted. Americans mostly seem unaware just how much is tipexed out of its "free press".

Europe it is true is responsible for a great many good and bad things, including the USA, but the heritage they left behind in their ex-colonies around the world stands on its own merits.

The neglect that much of that fell into on their exit, can be only accounted for by the "freedom fighters" who replaced them.

Clive
Mac Enthusiast

Joined: Jan 2001

0

09/17, 08:25pm | report spam | close Reply |
EU extended reach

The EU�s courts are able to reach out to account for fines based on global turnover (hey, is anyone complaining about this happening to Microsoft?) in the same way that other jurisdictions give themselves powers. For example the US trying to control global trade with Cuba by potentially seizing the US assets of any company, based anywhere in the world. Or, where US courts awards damages against sovereign states for terrorism against US citizens - where the terrorism occurred outside the USA.

Another example is the UK being able to prosecute those that have s** with what the UK would consider minors, even though such may be legal in a third country (where the "offence" took place), so as to crack down on "s** tourism".

Oh, and it always cracks me up when you silly yanks go on about Europe, even saying that many of the founders of the USA were of European descent and thus the ills of the early USA (genocide of the plains indians, slavery, etc) were created by Europeans! Hey, but you missed out that the War of Independence, the constitution, your whole body of law and your entire cultural heritage was lead by and created by those same useless b******* of European ancestry!

What a joke.

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

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09/17, 10:14pm | report spam | close Reply |
Hypocracy rules...

Clive you remind me that one of the many reasons the Americans broke with Britain was that it respected the treaties it made with the Indian tribes and tried to stop the colonialists breaking them whenever they felt like it.

If the Europeans were the root of all the evil how come they were the ones who ended slavery whilst the USA continued the practice? Slaves had to flee to Canada to get protection from the evil imperialists.

Even when the USA finally outlawed slavery, it has continued it in a virtual form right up to today with the exploitation of immigrants, blacks and the working poor. It has been such a noble tradition the USA has exported the practice around the world under the guise of "Economic Rationalism".

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

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09/17, 10:39pm | report spam | close Reply |
Hmmm time do yr homework

"rubaiyat, your ignorance of World history, politics, and facts is quite concerning. First, let us remember that Iraq sells the US VERY LITTLE oil and the fact is, it produces very little oil and only by the US will it produce more as we help upgrade their facilities. If you take a look, we import the majority of our imported oil from Canada, Mexico, Saudi, and Venezuela."

Greenspan and virtually everybody with a few grey cells left to rub together doesn't buy the "helpful USA" nonsense. Not that the story EVER made sense, no matter how often it was altered. The clueless US citizen's short attention span seems to have not noticed, how many lies he has been told, and in which order.

Iraq WAS a major exporter before the USA "helped upgrade" it.

Iraqi oil is now controlled by US corporations and always formed part of the world supply, every bit of which influences every other.

Including neighboring Saudi Arabia and Kuwait which feed the US addiction to pointless waste and stuffing up the environment to meet a consumerist fetish that leaves you no happier no matter how much you buy and throw away.

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

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09/17, 10:53pm | report spam | close Reply |
A little reminder

This current love fest was, as usual, kicked off by yet another xenophobic and hypocritical American diatribe.

The question is does the rest of the world fear and hate the USA as much as the USA seems to fear and hate the rest of the world of which it knows very little.

tortenteufel
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09/18, 04:53am | report spam | close Reply |
Admit it guys

These are the best comments ever published on MacNN ! A little history, a little politics, economics. Keep it up !

deVilliers
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09/18, 09:22am | report spam | close Reply |
EU law

Even as a Frenchman, I am a little taken aback by the vehemence of the criticism of the United States. However, I am also a little disappointed when citizens of the United States think that the EU is a communist state.

In principle and practice, regulation is sometimes, but not always, necessary to protect competition. The purpose of regulation is to promote competition, not to supplant it. This is recognised in the United States which has its own competition laws. From Adam Smith to Hayek, many pro-market (not pro-business) writers and institutions accept that regulation is sometimes needed to ensure that companies compete and compete fairly.

However, this EU issue is slightly different. It is the law of the EU that within the EU there exists a common market. The common market entails freedom of movement within EU member states of persons, goods and money without barriers. A company that sells a product in one Member State must allow that product to be purchased by a person in another Member State. The free movement of persons and goods is a fundamental principle that underpins the common market within the EU.

There is some concern in the European Commission that the Apple iTunes system does not comply with this fundamental principle. Therefore, it has decided to investigate. No conclusions have yet been reached. No blame has yet been laid. No party has yet been found in breach.

de Villiers

horvatic
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09/18, 09:56am | report spam | close Reply |
They need to clarify

EU needs to clarify just who they are going after. It clearly states that there going after iTunes which is Apple. If it is the record labels they are going after then why do all the headlines say they are going after iTunes and Apple. Apple can only influence the price, but the record labels have the last word as to what the prices will be. So the record labels should be fined, not Apple. Apple is only providing them with the best means to sell there records, not control the prices. Although Steve Jobs would very much like to control them and lower them but his hands are tied.

lockhartt
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09/18, 09:58am | report spam | close Reply |
@rubaiyat

Prices of hardware are affected by import tariffs, distribution costs, etc. - can't really compare unless all these "external" costs are equal.

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

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09/18, 01:06pm | report spam | close Reply |
@lockhardt

Yes I am aware of the import tariffs etc.

Australia now has a Free Trade Agreement with the USA so tariffs have been eliminated. There is a flat 10% GST applied to all manufactured goods and services and I have allowed for that.

There are Federal, State and local taxes applied in the States as well, the combination of these varies considerably and is usually quoted separately.

Perhaps a few posters from different locales in the States can tell us what applies in their areas.

rubaiyat
Dedicated MacNNer

Joined: Feb 2006

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09/19, 10:26am | report spam | close Reply |
To clarify

By States I meant the United States, not the Australian states which do not have any extra taxing power. Not on goods or income anyway.

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EU targets iTunes after Microsoft legal win

updated 02:55 pm EDT, Mon September 17, 2007

EU targets iTunes

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Recent Articles

Good

Music companies

So pass the buck?

Read the article idiots

f*** the EU

..and the computers/ipods

Next Time . . .

next time...

jingoistic zealots

Pricing

As a side note...

@ rubaiyat

@ Guest

Whiskey Tango Foxtrot!

Pricing

as an aside...

war with china?

go after MS first

Europe as bad as Bush

Talk About Ignorance:

Really off topic

EU extended reach

Hypocracy rules...

Hmmm time do yr homework

A little reminder

Admit it guys

EU law

They need to clarify

@rubaiyat

@lockhardt

To clarify

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