E.C. Sues Apple, Record Cos. Over Pricing

The European Commission has charged Apple and several big record companies with restrictive pricing practices

The European Commission has charged Apple and several big record companies with restrictive pricing practices in the European Union, a spokesman for the commission confirmed on Tuesday.

Customers in Europe pay different prices for songs bought from Apple's iTunes store depending on which country they live in. Two years ago a British consumer group complained to the commission that the price people pay in the United Kingdom is higher than in other countries, and that the iTunes website does not allow consumers to shop around for a cheaper price abroad.

"Consumers can only buy music from the iTunes online stores in their country of residence and are therefore restricted in their choice of where to buy music, and consequently what music is available and at what price," said Jonathan Todd, the European Commission spokesman for competition matters.

In the single European market, the distribution agreements between the record companies and Apple could amount to restrictive practices, Todd said. The commission declined to name the record companies involved.

Apple said it has tried to open a pan-European music store but has been prevented from doing so by the music industry. "We were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us," the company said in a statement, according to various press reports.

Apple has sparked the concerns of consumer groups and governments in several European countries because of the way it prevents songs bought from iTunes from being played on music players that compete with Apple's iPod. Apple moved to address those concerns Monday when it signed a deal with EMI Group, which will offer songs through iTunes and other websites that do not carry restrictive copy-protection technologies.

However, that issue is not part of the current antitrust case, the commission said. "The statement of objections...is not about Apple's use of its proprietary digital rights management (DRM) to control usage rights for downloads from the iTunes online store," it said.

Apple joins the ranks of Microsoft and Intel, which have both been under investigation by the commission for many years. Microsoft was found guilty of monopoly abuse and failing to honor a 2004 antitrust ruling. Meanwhile, Intel is being investigated for abusing its dominance in the microprocessor market. The Intel probe has not yet resulted in any formal charges.

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