May 26, 2009

Apple iTunes May Expand European Market Reach

Apple may soon extend the reach of its iTunes online music store to include customers throughout Europe, according to statements made by European antitrust regulators on Tuesday.

SACEM, the French body that collects royalties for roughly 128,000 artists, has agreed to forego territorial restrictions and permit national counterparts to license its catalog.

Should this become reality, Apple may consider broadening access to its online iTunes store, which currently controls more than half of all global digital music sales.

"If iTunes was readily able to license rights on a multi-territorial basis from publishers and collecting societies, it would consider making its content available to all European consumers, including those in EU countries where iTunes is currently not available," said European Competition Commissioner Neelie Kroes in a statement.

Apple does not currently allow users in Europe to purchase content from iTunes online stores outside their country of residence.

Admitting the challenges faced by online stores, the executive European Commission said the current copyright framework and music licensing practices has limited the content consumers could purchase via the Internet.

"We have received complaints from Polish consumers that they can't buy music from iTunes," a Reuters report quoted Commission spokesman Jonathan Todd as saying.

Last July, the Commission, which is responsible for making sure competition is not distorted within the 27-nation European Union, gave 24 European collecting societies 90 days to end their national monopolies or face daily fines. The move followed the Commission's investigation into the collecting societies last year amid complaints from media group RTL and U.K.-based online music provider Music Choice.

"It is definitely a good step in the right direction of pan-European licensing," Craig Pouncey at law firm Herbert Smith told Reuters.

However, he cautioned that the ultimate outcome would depend upon whether the companies involved could deliver on their promises and on subsequent negotiations over online distribution of music.

Interested parties have until June 30 to comment on the issue.

The Commission reported that record firm EMI was ready to employ rights managers to offer its catalog for the European market.


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