“Apple and several major music companies are facing a European Commission antitrust probe after Brussels issued formal charges alleging that the deals that underpin the sale of music through the hugely popular iTunes platform violate competition rules,” Tobias Buck and Karl de Meyer report for The FInancial Times.
“In a surprise development, the Brussels regulator last week sent a confidential statement of objections outlining the accusations to Apple and to “major record companies”. These are understood to include Universal, Warner, EMI and Sony BMG,” Buck and de Meyer report.
Buck and de Meyer report, “The Commission’s main concern is that iTunes’ current set-up in the European market prohibits users in one country from downloading music from a website intended to serve another country.”
“‘Apple has always wanted to operate a single, pan-European iTunes store, accessible by anyone from any member state,’ an Apple spokesman said on Monday. ‘But we were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us. We do not believe the company did anything to violate EU law, and we will continue to work with the EU to resolve this matter,’ he said,” Buck and de Meyer report.
Full article here.
You give them the stars, they ask for the moon.
This sounds like a music labels’ licensing morass (old country-by-country contracts that aren’t EU-applicable), not an issue caused by Apple.
Related articles:
Apple’s DRM-free iTunes play trumps Microsoft’s huge bet on DRM – April 02, 2007
Norwegian Consumer Council senior advisor applauds Apple’s iTunes Store DRM-free music – April 02, 2007
CNBC video: Apple CEO Steve Jobs and EMI Group CEO Eric Nicoli – April 02, 2007
EMI’s Nicoli on DRM-free iTunes: ‘We have to trust our consumers,’ Apple’s Jobs: ‘right thing to do’ – April 02, 2007
Kudos to Steve Jobs and Apple for having courage to call for end of DRM and making it happen – April 02, 2007
Analyst Gartenberg: iTunes Store’s DRM-free music ‘a great win for Apple’ – April 02, 2007
Apple CEO Steve Jobs to appear live on CNBC within the hour – April 02, 2007
Apple: Higher quality 256 kbps AAC DRM-free music on iTunes Store coming in May – April 02, 2007
EMI rejects Warner Music buyout bid – March 04, 2007
EMI halts talks about selling DRM-free music – February 26, 2007
Warner Music approaches EMI in possible takeover bid – February 20, 2007
Macrovision posts pro-DRM open letter to Steve Jobs and digital entertainment industry – February 16, 2007
Warner’s DRM-loving Middlebronfman warns wireless industry it may lose music market to Apple iPhone – February 14, 2007
Monster Cable announces full support of Apple CEO Steve Jobs’ call for DRM-free music – February 13, 2007
BBC columnist doesn’t believe Steve Jobs’ Apple would stop using DRM if music labels would allow it – February 12, 2007
EMI may sell entire music catalog DRM-free – February 09, 2007
Recording Industry Association of America wants their DRM, calls for Apple to license FairPlay – February 08, 2007
Warner’s Middlebronfman: Jobs’ DRM-free music call ‘without logic and merit, we’ll not abandon DRM’ – February 08, 2007
Technology Review editor gets a lot wrong in his article about Apple CEO Jobs’ push to end DRM – February 07, 2007
Apple’s Jobs jolts music industry; Zune exec calls Jobs’ call for DRM-free music ‘irresponsible’ – February 07, 2007
Apple CEO Steve Jobs’ posts rare open letter: ‘Thoughts on Music’ – calls for DRM-free music – February 06, 2007
About time they bashed their heads together and sorted this out. Hopefully this will force the media giants into coming up with a working licensing scheme for all their product, including film and TV rights.
And regarding all of you throwing insults rather than thinking this through, do you honestly think today’s anti-DRM announcement would have happened if it weren’t for the EU making such a noise about it? The European Commission points out where business needs to get its act together. If you left the record labels to it, you’d never get any change.
To Mike
Yeah, French people want a French store, but increasing a lot of French people don’t have addresses in France, since they live in England, Spain, Germany etc. The same with any other nationality in the Union, we’re all moving around and living in each other’s countries. I think that’s kind of the point the EC is trying to make.
Whether some Americans like it or not, the EU is supposed to be a single market area with no barriers in trading of goods and services and free movement of work force (how’s that for ‘socialism’?). Which means this is just the EU working how it’s supposed to work: tearing down trade walls erected by local governments, country-specific laws, and big corporations orchestrating them. Apple can do nothing but benefit from this – they said themselves they’d like to have a pan-European iTS.
So what the heck is your problem? Could it just be vehement, irrational Euro hate that’s so alive and well among the navel-gazing, Faux News ogling, Rush-listening, warmongering, Bible-thumping, blood-thirsty, violence-good-nudity-bad, no-better-than-the-terrorists-they-hate, there-are-commies-under-my-bed, redneck part of the American population?
Some people just can’t think about anything else than ‘socialism’ when they hear the word ‘Europe’, even when facts fly right into their faces. But facts never seem to stop them anyway, whether it’s about science (evolution) or war (Iraq and those horrible, terrible WMD’s which were just as real as Microshaft vaporware).
Tryd & TTzz: right on.
Lurker_PC: “In the affected countries, Apple should either: 1) pull out entirely or 2)sell music only from the vendors that allow DRM free music to be sold. If 2) is not good enough, then implement 1).”
This is not the issue of DRM. Even if Apple gets a license to sell music DRM-free, they are still restricted to per country basis. Artists do not sign to a single Europe-wide label. An artist may signed by EMI in the UK and by Sony BMG in German. Apple must get a permission to distribute the same song on the same server from both depending on the downloaders’ location. That’s the nightmare. It’s easier to break down the store to single country stores and each store is responsible for their own license as opposed to a centralized store that can’t sell a song in 26 countries because they can’t get a license to sell it in Malta.
Funnily enough, as much as we hate big labels, the issue is not with them too. The issue is with the EU itself. Fix the laws concerning transmission of intellectual properties in a unified way and they can make companies to treat EU citizens equally.
The problem here isn’t with what the EU is trying to do, but rather that they’ve made Apple on the targets.
The record labels are the ones with the product, Apple is the one trying to sell the product–Apple is forced to make a deal with the rights holders, and the conditions here are set by those rights holders, particularly since one company may have the rights to an act in Germany, a different company in England, another one in France, etc.
The record labels are the ones with the product, Apple is the one trying to sell the product
Correct in principle, but Apple is the entity enforcing the restrictions. The internal contractual basis for that enforcement would certainly come up before any fines would be talked about, but on the face of it, Apple is the representative of the labels from the european buyer’s point of view – the commercial agent in violation of european principles.
It’s absolutely certain that Apple desperately wants this simplification at least as much as the customers do which can’t access and buy many titles in the other european iTunes Stores at this point.
There is no law that needs to be changed, but a european harmonization of national IP laws might in fact prove somewhat helpful to the labels who’ll have to try finding a way out of their own historically grown and metastasized licensing mess.
Of course I’d much prefer global access (to the american and japanese ITSs as well, for instance), but at least the common european market needs to be free of access restrictions.
ping: “Correct in principle, but Apple is the entity enforcing the restrictions. The internal contractual basis for that enforcement would certainly come up before any fines would be talked about, but on the face of it, Apple is the representative of the labels from the european buyer’s point of view – the commercial agent in violation of european principles.”
True, but the contracts enjoy the protection of the legal entities or the contracts themselves are illegal and unenforceable. If Apple is in violation of European principles, that means Apple can’t use the contracts to protect itself because they are invalid, but the contracts are valid (or else they were revoked a long time ago). Hence the contradiction of the EU’s stance. The EU cannot harmonize the IP laws across the Europe and yet they require companies that are bound by their laws to do it for them.
Norway capitulates, but the EU declares war on common sense.
The EU cannot harmonize the IP laws across the Europe and yet they require companies that are bound by their laws to do it for them.
Again: It is not the laws which force the labels to create a chaotic web of inconsistent licensing across Europe.
If they wanted (or were forced to), they could very well remedy the situation.
It’s just that their primary mode of operation is complacency. So they won’t start moving unless really forced to, And that may be exactly what’s beginning to happen now.
It is very well possible that the european courts would be asked for a judgment, possibly followed by a need to amend certain laws and/or treaties if they should pose an unacceptable impediment for either the labels or the consumers.
Proud bedpan.
“Whether some Americans like it or not, the EU is supposed to be a single market area with no barriers in trading of goods and services and free movement of work force (how’s that for ‘socialism’?). Which means this is just the EU working how it’s supposed to work: tearing down trade walls erected by local governments, country-specific laws, and big corporations orchestrating them. Apple can do nothing but benefit from this – they said themselves they’d like to have a pan-European iTS.
So what the heck is your problem? Could it just be vehement, irrational Euro hate that’s so alive and well among the navel-gazing, Faux News ogling, Rush-listening, warmongering, Bible-thumping, blood-thirsty, violence-good-nudity-bad, no-better-than-the-terrorists-they-hate, there-are-commies-under-my-bed, redneck part of the American population?
Some people just can’t think about anything else than ‘socialism’ when they hear the word ‘Europe’, even when facts fly right into their faces. But facts never seem to stop them anyway, whether it’s about science (evolution) or war (Iraq and those horrible, terrible WMD’s which were just as real as Microshaft vaporware).”
Just don’t call us the next time you have your European war.
Norway capitulates, but the EU declares war on common sense.
You’re kind of slow, aren’t you?
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It is common sense that any european customer can simply access the same library in the iTunes Store regardless of location.
The Commission does nothing but demanding that to actually happen.
Right now the selection is completely fragmented, at the frustration of the european customers and significant overhead for Apple.
What the hell is “common sense” about the current bloody mess?
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Just don’t call us the next time you have your European war.
Don’t worry, we won’t.
Fortunately the navel-gazing, Faux News ogling, Rush-listening, warmongering, Bible-thumping, blood-thirsty, violence-good-nudity-bad, no-better-than-the-terrorists-they-hate, there-are-commies-under-my-bed, redneck part of the American population is a minority – by far most americans are actually sensible people who are welcome any time around here, war or no war!
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ping: “Again: It is not the laws which force the labels to create a chaotic web of inconsistent licensing across Europe.
If they wanted (or were forced to), they could very well remedy the situation.”
No, the law does not force the licensing morass, but the law does allow it to happen. As long as it’s legal, the labels could do whatever they want and the EU can not and should not complain. That’s the basis of capitalism and competition. It’s when they “unifies” their power that consumers should be weary because rarely does such a thing benefit consumers. When they do, the law should be there to protect people’s interests.
ping: “It’s just that their primary mode of operation is complacency. So they won’t start moving unless really forced to, And that may be exactly what’s beginning to happen now.
It is very well possible that the european courts would be asked for a judgment, possibly followed by a need to amend certain laws and/or treaties if they should pose an unacceptable impediment for either the labels or the consumers.”
Forcing them to move is not what’s objectionable. What is, is that they are forcing them to move contrary to the laws which give them a protection to be complacent. If they want/have to amend certain laws and treaties, then good. By all means, amend them. But until they do, they shouldn’t probe companies for unfounded “wrongdoings”.
No, the law does not force the licensing morass, but the law does allow it to happen. As long as it’s legal, the labels could do whatever they want and the EU can not and should not complain.
Free access of consumers to the common european market is an overriding principle which can and should trump the freedom of contractual negotiation.
You cannot negotiate a contract which ends up in violation of other laws, not even under protection of said freedom of negotiation.
The creation of the common market already has in many cases and will continue to require changes in many existing commercial frameworks.
It’s when they “unifies” their power that consumers should be weary because rarely does such a thing benefit consumers.
Just keep your tin foil hat firmly affixed to your head, then – you’ll surely need it…!
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In actual fact the European Community has sometimes annoyed but still predominantly benefited the rights and freedoms of its citizens. But by no means let reality interfere with your paranoia…
WEll, most of it has been covered, but I will still add my 2 kopecs.
Europe, If you are mad at the hay, DON’T KILL the COW!!!
Apple has to work with the record companies. It does not make or license the music, only act as a pass thru that MUST follow the rules of the music companies or STOP selling music.
Please act like intelligent adults. At least please try. 🙁
ne
Don’t a lot of music contracts and ownership rights pre-date the formation of the EU. This is definitely one more item that the EU members must resolve. Why they included Apple is anyone’s guess. My own guess is that these commissioners want to use Steve Jobs as the hammer to crush the record companies’ insistance on ‘music with borders’. By including Apple in their complaint they are trying to use Apple’s leverage because they have little power of their own to change the system. Anyone with a lick of business sense would realize that it is NOT in Apple’s interest to maintain a dozen different store fronts, each with its own inventory.
ping: “Free access of consumers to the common european market is an overriding principle which can and should trump the freedom of contractual negotiation.
You cannot negotiate a contract which ends up in violation of other laws, not even under protection of said freedom of negotiation.”
OK, if Apple gets a license to sell songs by Artist A from Label B in France, can they sell it in Portugal even though they don’t have the license from Portuguese copyright holder, Label C? If Apple allows Portuguese to download the songs anyway and Label C sues Apple, who wins? Can Apple sue Label C for not licensing them the songs?
ping: “Just keep your tin foil hat firmly affixed to your head, then – you’ll surely need it…! wink
In actual fact the European Community has sometimes annoyed but still predominantly benefited the rights and freedoms of its citizens. But by no means let reality interfere with your paranoia…”
It’s not a paranoia that when companies get together and they get the power, consumers usually get screwed. That’s why there are antitrust lawsuits and probes (which is what the article is about). Cartels and trusts are usually monitored closely because companies do what companies normally do: try to maximize profits even at the expense of consumers. Does that mean the EC wears a tinfoil hat (and you, who support the EC, too)?
Don’t a lot of music contracts and ownership rights pre-date the formation of the EU.
Not really… I doubt that many are over 50 years old…
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But the common market in its current form is of course relatively recent indeed.
That’s why many industries had or still have to adapt to it, and the music industry has their number coming up right now, it appears.
Why they included Apple is anyone’s guess. My own guess is that these commissioners want to use Steve Jobs as the hammer to crush the record companies’ insistance on ‘music with borders’.
Quite certainly. I wouldn’t be surprised if EMI’s decision was at least in part a reaction to initial rumblings from various political sides…
By including Apple in their complaint they are trying to use Apple’s leverage because they have little power of their own to change the system.
Actually, the Commission has rather considerable power to change the system, especially when acting in concert with the national governments and/or the European Parliament and especially when acting consistently with already established principles.
OK, if Apple gets a license to sell songs by Artist A from Label B in France, can they sell it in Portugal even though they don’t have the license from Portuguese copyright holder, Label C?
No. The contract which aims to restrict consumer’s access along national borders would be inconsistent with european regulations and thus null and void in the end.
But things aren’t moving quite that fast, even if it’s clearly the direction.
Agreed-upon european regulations need to be implemented into national laws to actually have that power, and many of them are lagging behind.
And existing contracts which will need modification will have certain time frames within which they need to be amended.
Nobody would actually have to lose any rights they already possess. There would just have to be additional cross-licensing agreements where necessary.
It’s not a paranoia that when companies get together and they get the power, consumers usually get screwed.
Ah, okay. I thought you were referring to the EU institutions with your remarks above. Tin foil hat hereby retracted.
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ping: “Agreed-upon european regulations need to be implemented into national laws to actually have that power, and many of them are lagging behind.”
And that’s why I said currently, the EU needs to focus and work on their own reforms. It’s pretty stupid to require companies to follow an ideal that currently has no legal backings. It may be the goal to have an EC-wide market for IP downloads, but as it happens right now, Label C can and will sue Apple for allowing Portuguese to download the songs from the France-based server without a license from them. They will win, too. If iTunes Store is centralized, Label C can be a hold out and can ask Apple for an insane amount of money which will prevent Apple from selling the songs to anyone until they agree to pay. There is no legal recourse for Apple to prevent such a thing from happening. That’s the reason why iTunes Store is fractured.
So, once again, it’s pretty stupid to go after companies right now. Fix the treaties/laws and then you can use them to force companies to change their business.
It may be the goal to have an EC-wide market for IP downloads, but as it happens right now, Label C can and will sue Apple for allowing Portuguese to download the songs from the France-based server without a license from them. They will win, too.
It’s not nearly that simple.
For one thing, the european courts could well find such a suit in violation of higher principles even if the respective national governments may have failed to properly implement agreed-upon regulations.
Secondly, the Commission can make life for the labels quite uncomfortable on grounds of collusion to the detriment of the european consumer if those should attempt such a feat.
Since nobody can claim to be surprised by the long-established principles of the common market, acting consistently against those will not lead to happy shareholders – this is not something which actually costs the labels much if anything; Quite to the contrary.
The one-time effort of cleaning up their licensing messes will result in increased sales, simplified market access and better long-term stability for the labels and a much better situation for both Apple and the customers.
The iTunes Store country selector would just switch between presentation languages and probably the national default front-page title selection, but not prevent anyone from actually finding and buying the desired titles if they’re available in Europe. And that is how it should be.
“Don’t a lot of music contracts and ownership rights pre-date the formation of the EU. This is definitely one more item that the EU members must resolve. Why they included Apple is anyone’s guess. My own guess is that these commissioners want to use Steve Jobs as the hammer to crush the record companies’ insistance on ‘music with borders’. By including Apple in their complaint they are trying to use Apple’s leverage because they have little power of their own to change the system. Anyone with a lick of business sense would realize that it is NOT in Apple’s interest to maintain a dozen different store fronts, each with its own inventory.”
Spark,
Well said. While I have no sympathy for the music companies, in many cases their hands are tied by the many and varied copyright laws of the member nations. Until the copyrights expire, or until the EU implements a uniform copyright code, this mess will drag on until Armageddon. Throwing the blame at the music companies (who do deserve some, admittedly) and – incredibly, in my opinion – Apple, strikes me as self-serving.
<angry rant>And by the way, all the ignorant “Europe sucks” trolls here need to get their heads out of their asses and start reading a bit about the rest of the planet. America isn’t great because of people like you; it’s great despite people like you.
No greater testament to the genius of the U.S Constitution exists than the fact that genetic drift like you are allowed to speak, much less breed.
I’m an American, and I love America. I don’t love the fact that the country I have proudly served is filled with ignorant know-nothings whose only purpose in life – apart from occupying useful space, consuming oxygen, and reflecting photons – seems to be to embarrass the greatest nation in history by parading their stupidity on the world stage. Either get a clue or SHUT THE FUCK UP.</angry rant>
“Europe, If you are mad at the hay, DON’T KILL the COW!!! “
I got mad at hay one time.
My friends said I was just grasping at straws.
And sow, they refused to bale me out especially once I grazed my threshold.
While I have no sympathy for the music companies, in many cases their hands are tied by the many and varied copyright laws of the member nations. Until the copyrights expire, or until the EU implements a uniform copyright code, this mess will drag on until Armageddon.
Still nothing that couldn’t be resolved between the participating parties if they’re so motivated. And this motivation can be helped along by a bit of pressure in the right places.
I’m an American, and I love America. I don’t love the fact that the country I have proudly served is filled with ignorant know-nothings whose only purpose in life – apart from occupying useful space, consuming oxygen, and reflecting photons – seems to be to embarrass the greatest nation in history by parading their stupidity on the world stage. Either get a clue or SHUT THE FUCK UP.
Just don’t think for a second that there weren’t any european neanderthals… after all, the Neandertal is located in the heart of Europe, and occasionally it shows.
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Does anyone else smell Madame Kunteva’s evil hand in this? Fsckin’ wannabe M.I.L.F.!