Apple And Record Labels Challange E.U. On iTunes

Fighting Over Pan-Euro Store

APPLE INC. and two of the world's largest record companies contested EUROPEAN UNION allegations that contracts used to sell music on the iTUNES service are illegal, reports BLOOMBERG. VP/iTUNES EDDIE CUE defended the company's use of national online music stores, which charge different prices for songs downloaded in the U.K. and the rest of the 27-nation EU. During a closed-door hearing in BRUSSELS, APPLE blamed national laws for preventing the company from reaching its goal of operating a pan-European iTUNES store, ALAN HELY, an APPLE spokesman in the U.K., said in an e-mail.

"We think anyone should be able to buy from any store," APPLE CEO STEVE JOBS said at joint press conference with DEUTSCHE TELEKOM AG'S T-MOBILE in BERLIN. "We agree completely with the European Commission's view that anyone in EUROPE should be able to buy music in any other stores."

The commission, the EU's antitrust regulator, said in APRIL that APPLE and the four largest music companies illegally restrict where iTUNES customers can buy songs. Under EU rules, companies can be fined as much as 10% of annual sales for agreeing to restrict competition along national markets. APPLE said it's prevented from operating a pan-European ITUNES store because of copyright restrictions.

"Unfortunately, the music and publishing companies said they couldn't license us their music on terms that would enable us to achieve this," HELY said. "APPLE is simply abiding by these licensing terms and national copyright laws."

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