Apple, Record Labels Each Deny Culpability For EC Price Differentials
By Robert Andrews - Wed 19 Sep 2007 01:55 AM PST
Update: Steve Jobs said at the iPhone Germany launch: “We think prices should be the same. We think anybody in Europe should buy off any store.” Reuters: “According to a person in the (Brussels hearing) on Wednesday, a representative of Apple (NSDQ: AAPL) said there was nothing in its contract with Universal obliging it to operate national stores or to set a higher price in countries such as Britain. Apple, according to the observer, said it had made unilateral decisions, in part because doing business in Europe turned out to be more complex than in the United States.”
Original post: 
Apple joins Universal Music and Sony (NYSE: SNE)BMG in Brussels to defend its iTunes Store pricing policy today - and it’s not skimping on the defence. Eddy Cue, Apple’s global president of iTunes, will be present, The Times reports, and Apple’s even talking to the press. ”Unfortunately, the music and publishing companies said they couldn’t license us their music on terms that would enable us to achieve (pan-European pricing). Apple is simply abiding by these licensing terms and national copyright laws,” a spokesperson told the same paper.
The commission in April sent a ”statement of objection” to Apple and the four majors complaining that customers can only buy digital songs from their home nation’s iTunes Store and not others. This would break article 18 of the EC Treaty governing restrictive business practices - and means British customers must pay £0.79 per track versus the EUR 0.99 (£0.67) enjoyed in the eurozone. The commission this month told paidContent:UK four of the accused had requested an oral hearing, after which an officer will send a summary of the case to competition commissioner Neelie Kroes for adjudication.
But The Times says EMI will join Warner Music Group (NYSE: WMG) in not attending: ”Both companies believe that they have successfully impressed on the commission that they are not responsible for how Apple prices songs on its iTunes download store. A spokesman for EMI said that it had “no need to attend in this case”. Given the differences in views apparent here, and the fact no two companies will share the room at the hearing, it sounds like today’s event could be a pass-the-buck blame game. The results of the hearing could see the EC drop the action, agree on a compromise or find against the companies, resulting in fines of up to 10 percent of global turnover.
It could be significant that Kroes and her competition department are newly bolstered by this week’s court upholding of their earlier EUR 497 million (£345.5 million) antitrust fine against Microsoft (NSDQ: MSFT) for antitrust violation concerning Windows Media Player bundling and access to server information (see Kroes’ response). Monday’s ruling by the Court of the First Instance is widely seen to have validated the commission’s aggressive stance in defending consumer freedoms, likely leading to more such cases in future.
Posted in: Companies, Apple, EMI, SonyBMG, Vivendi, Universal, Entertainment, Music, Legal, Regulatory, EC
