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European Commission and Apple in antitrust dispute
Dean Mortlock
0 comments 06 April 2007
The EU are at it again. This time they’ve launched an antitrust claim against Apple, saying that its iTunes Store violates the European Union’s competition rules.
An antitrust law is one that prohibits anti-competitive business behaviour. In the case of Apple, the European Commission claim that the iTunes Store is illegal in Europe as it doesn’t allow users in one country from downloading music from another one to take advantage of the cheaper charges.
For example, a single song in the UK costs 79p (which converts to 1.16 euros or $1.55), while in Denmark you’ll pay 8 Kroner (1.07 euros or $1.44). Those countries using the euro currency pay just 0.99 euros a track (which converts to about 67p or 1.32 dollars), which would save you £1.30 an album in the UK if you were able to buy it abroad. As we all know, the US is the cheapest of the lot, as a single there costs 99 cents, which converts to just 50p.
"The music industry is built on having very clear delineation across borders," says Mark Mulligan, an analyst with Jupiter Research. "This investigation won't just deal with Apple or the major record labels, it goes right throughout the music value chain and it could be very disruptive."
In a statement issued by Apple, they claim that they’ve always wanted to offer one store for the whole of Europe, but where unable to do so because of the restrictions of the record companies.
“Apple has always tried to operate a single pan-European iTunes stores 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,” they said.
A later report claims that the European Commission is likely to settle the dispute with Apple long before sanctions are imposed. Apple have two months to defend their case against the charges and, if found guilty, can be charged up to 10 per cent of their annual worldwide turnover.
Story via MarketWatch and Forbes. For the original stories go here and here.
For more information about the antitrust laws, go here.
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