UK govt takes iTunes gripe to Europe

The UK's Office of Fair Trading (OFT) has reported Apple's iTunes Music Store to the European Commission (EC) on the grounds that the service may infringe European trade regulations.

The reason for the move lies in Apple's refusal to allow buyers in one country to purchase music from another nation's iTunes store. While UK consumers pay 79p for songs, customers in France and Germany pay €0.99. At current exchange rates, that comes to 68p. Unfortunately, Apple prevents UK buyers from going to the French store and buying songs there, more cheaply than from the local iTunes store.

That ban may well run contrary to European laws which govern the free movement of goods and services between EU member states - the single market.

Apple has maintained in the past that its hands are tied. Different states have different music licensing regimes and it's the terms of its licences that prevent it from selling, say, a France-sourced version of song to a UK consumer. The differential pricing is also a result of this licensing mess, and from differing tax regimes between EU member states.

Indeed, the EC is itself aware of the problem, and earlier this year effectively told the Union's various rights agencies to devise a standard, cross-border licensing scheme.

In April this year, a month before its UK launch, Napster said it had been "frustrated" by the mass of different licensing hoops it would have to jump through to open online music stores throughout Europe. In the end, unlike Apple, it settled for a UK-only launch. At the time, Apple Europe chief Pascal Cagni made a similar complaint.

However, Apple's own cross-border store, which sells to a number of European countries, including Spain, Italy and the Netherlands, has clouded the company's argument. If Spanish and Belgian buyers can acquire the same song from the one store, why can't British or German buyers do the same?

The OFT's move follows an investigation begun in September this year at the behest of UK consumers' association, Which? ®

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