Apple, Music Labels Face Antitrust Charges

Apple and several major music labels will find themselves under the gun later this month as they take part in the European Commission (EC)'s antitrust hearings.

The hearings, scheduled for September 19 and 20, will be a forum for the EC's concerns over unfair pricing and sales practices in the European iTunes Store. Representing the next step in the investigation, the EC has emphasized that the hearings will not lead directly to a judgment. The EC has not yet set a date for a final decision. (Source: arstechnica.com)

The EC accused music labels EMI, Universal Music Group, Sony BMG and Warner Music Group of pressuring Apple into applying a country-specific pricing scheme at the European iTunes Store. Under the current system, users are only allowed to purchase songs within their country of residence. This system is problematic, however, because songs and albums are priced differently in various countries, a practice that the EC says violates European antitrust laws.

How?

Specifically, the EC says that the current setup violates article 18 of the EC Treaty on restrictive business practices, leaving customers with the short end of the stick in terms of both choice and price. In fact, tracks in the UK cost almost 18 per cent more than tracks in the "eurozone". (Source: forbes.com)

Apple has contended that it had wanted to create a single store with a uniform price throughout Europe, but had been prevented from doing so by the aforementioned record labels.

Apple and all of the music companies accused of the anti-trust practices, except for Warner, will be attending the hearing. For confidentiality reasons, the hearing will be closed to the public -- so it may be a while before we know exactly which companies are in the dog house. (Source: pcworld.com)