Apple Settles Antitrust Case With EU

Apple settles antitrust case with EU

BRUSSELS — U.S. electronic manufacturer AppleInc. on Wednesday settled an antitrust case with the European Commission concerning its iTunes online music store, after agreeing to cut the price of music downloads across Europe within the first half of this year.

The commission launched an antitrust investigation into Apple in April 2007 after a British consumer protection organization complained that the U.S. company charges more in Britain than in other EU countries for music downloads from its iTunes online music store.

Those agreements containing territorial sales restrictions constitute restrictive business practices that are against EU rules, according to the commission.

As part of the settlement deal, Apple announced Wednesday that it would level prices for music downloads from its U.K. iTunes online store within the next six months, which would end the different treatment of British consumers.

"The commission is very much in favor of solutions which allow consumers to benefit from a truly single market for music downloads," EU Competition Commissioner Neelie Kroes said.

Apple operates an iTunes online store in a country-specific waywithin the EU. As a result, EU consumers can only buy music from the iTunes online store in their country of residence.

iTunes verifies consumers’ country of residence through their credit card details. For example, in order to buy a music downloadfrom the iTunes’ Belgian on-line store a consumer must use a credit card issued by a bank with an address in Belgium.

The commission was originally concerned over the territorial sales restrictions contained in Apple’s agreements with major record companies, which could constitute restrictive business practices, but it concluded that the way the iTunes store is organized in Europe is chosen by Apple to take into account the country-specific aspects of copyright laws.

"The commission is very much in favor of solutions which would allow consumers to buy off the iTunes’ online store without restrictions," the commission said.

"But it is aware that some record companies, publishers and collecting societies still apply licensing practices which can make it difficult for iTunes to operate stores accessible for a European consumer anywhere in the EU," the commission added.

As a response, the commission said it would not take further action in the case.