APPLE and the world’s five major record labels have been formally accused by European regulators of anti-competitive behaviour stemming from distribution practices of the iTunes music download service.
The European Commission confirmed yesterday it had sent a statement of objection to the companies over agreements between the record companies and Apple that restricts where and how users can access the iTunes site.
The EC says the companies are artificially restricting users from one European country from accessing the iTunes service in another, restricting cross-border transactions.
It says the record labels – Vivendi's Universal Music Group, Sony BMG, EMI and Warner Music – were forcing Apple to restrict users to only accessing the iTunes site in their own country, thus restricting choice and forcing prices up.
The Commission says the agreements between Apple and the record companies violates EC Treaty rules prohibiting restrictive business practices.
“The Statement of Objections alleges that distribution agreements between Apple and major record companies contain territorial sales restrictions which violate Article 81 of the EC Treaty,” the EC said in a statement.
“iTunes verifies consumers' country of residence through their credit card details. For example, in order to buy a music download from the iTunes' Belgian on-line store a consumer must use a credit card issued by a bank with an address in Belgium.”
The iTunes services charges different amounts for songs in different European countries.
The Statement of Objections does not allege that Apple is in a dominant market position and is not about Apple's use of its proprietary Digital Rights Management (DRM) to control usage rights for downloads from the iTunes on-line store.
