Bloomberg Anywhere Bloomberg Professional About Bloomberg


Apple May Start Selling Music Across EU on iTunes (Update2)

By Matthew Newman

May 26 (Bloomberg) -- Apple Inc. said it may start selling digital music via its iTunes music store throughout the 27- nation European Union as long as the company can obtain licensing rights from publishers and music royalty collecting societies.

The European Commission, the EU’s antitrust authority in Brussels, has sought to promote an EU-wide market for music downloads. Currently, it’s impossible for consumers in some countries, such as Poland, Bulgaria and Slovenia, to buy digital music from any iTunes store in Europe.

“iTunes would agree to consider making its content available to all European consumers, including those from the Eastern European countries where iTunes is currently not available” if Apple is “able to license rights on a multi- territorial basis from the publishers and collecting societies,” the company said in a report posted on the commission’s Web site today.

Following an EU probe of different national prices on iTunes, Apple agreed last year to cut the price of music downloads from its U.K. iTunes store. Cupertino, California- based Apple has sold more than 6 billion songs since starting iTunes in 2003, making it the most popular legal site for music downloads.

Music copyright licenses are granted on a national basis in the EU. As a result, consumers can only download music from an iTunes store in their home country. The commission also ruled last July against collecting societies’ agreements that divided the market for royalty collection on a national basis.

Complaints

The EU investigation was prompted by complaints in 2000 from Bertelsmann AG’s RTL Group unit and later from digital broadcaster Music Choice Ltd. The royalty collecting societies have appealed the decision, arguing that more competition between the agencies will reduce musicians’ income.

The commission can levy a daily penalty against the 24 collecting societies if they don’t follow the ruling. The regulator is “monitoring” how the decision is implemented, Jonathan Todd, a commission spokesman, told journalists.

Neelie Kroes, the EU’s competition commissioner, said in a statement that French collecting society SACEM is “willing, in principle, to entrust other collecting societies with pan- European licensing of its repertoire and to act as non-exclusive rights manager for publishers and other collecting societies.”

SACEM’s commitment, if followed by other collecting societies and agreements with publishers, may help promote pan- European licensing, Todd said.

‘Put Into Action’

RTL said in an e-mailed statement that it hopes SACEM’s commitment “will now be put into action” to abide by last year’s antitrust decision.

Bernard Miyet, SACEM’s chief executive officer, said in an interview that the agreements with other collecting societies will be “flexible and practical, but with the capacity to ensure that our repertoire is licensed under good conditions.”

Miyet said SACEM wants assurances that Internet music stores have reliable services for the collection and distribution of royalties.

Josiane Morel, an Apple government affairs official in Brussels, had no further comment.

To contact the reporter on this story: Matthew Newman in Brussels at Mnewman6@bloomberg.net.

Last Updated: May 26, 2009 13:52 EDT

Sponsored links