Comment Re:good old EU (Score 2, Interesting) 318
Thank goodness for an informed comment. EC laws are complex, but no more so than eg the complexities following from the US Constitution's commerce clause. But it's actually even a bit more complex than this.
1) The Commission has now confirmed that their target is not Apple, but the labels, but Apple has to be joined to the case, because it is the supplier/agent of the labels.
2) This is indeed a single market issue. It is not illegal to sell products at different prices in different EU states, but any EU resident has the right to buy that product in any of the states, if they pay the local rate of value-added (ie sales) tax (VAT), and for their own use (ie not for commercial resale), and import it into his own country without further tax. (There are separate arguments over whether a pickup full of French bought wine coming into the UK can possibly be for non-commercial personal use, but the principle is clear, and clearly covers buying a few albums of down-loaded music). I can buy CDs by mail order in France and have them posted to me by the retailer. And it has absolutely nothing to do with DRM.
3) In principle therefore, iTunes should be able to have a single EU wide operation, based in any EU country, paying VAT at the local level, and corporate taxes to the local government. As noted above, they have in fact located the iTunes Europe operation legally and corporately in Luxembourg, but the actual operations (servers, content handling, promotional activities such as free or advance downloads etc) could easily be somewhere else: Luxembourg has a long history of lawyer-led company registration.
4) But the different countries in the EU still operate different rights management systems, and the labels treat them as different markets and have presumably refused Apple the single store option, leaving them between rock 1 and hard place 1: if they were to sell at all in the EU, they had to do it on a country by country basis. That might have been OK (in EU terms) if they had allowed me (in the UK) to buy a record by a Galician folk-rock bagpiper not released on their UK store from the Spanish one, but their credit card handling processes (in the same way as for a Canadian trying to buy from the US store) in practice block me. Whether that was a careless carry over of the existing North American model, or the result of specific pressure from the labels, only access to the emails will tell. Possibly it was a trap set by Apple for the labels, to provoke just the Commission action we are finally seeing, to give them the benefits of a single operation, and cutting out some of the overhead on what we all are told is at best a marginally profitably operation.
5) So a simple answer may be simply for the Commission to order Apple to accept any EU credit card in any EU iTunes store. This would do for me. And may be the initial ruling from the Commission, against which the labels and or Apple would have to appeal, but could have no obvious grounds for doing.
6) But the big fish for the Commission is probably the single market in recorded music rights, which would inevitably lead to similar provisions for performing and broadcasting rights. This could be more controversial, in part because it might trigger the French national neurosis about protecting their cultural/linguistic special status, and the right to subsidise French artists, and to insist on a certain proportion of French-produced content on radio and TV. And as noted somewhere above, it's not a long way then to film and other video rights. That promises to be a real earner for the lawyers, and to take a pretty long time.
IANAL
1) The Commission has now confirmed that their target is not Apple, but the labels, but Apple has to be joined to the case, because it is the supplier/agent of the labels.
2) This is indeed a single market issue. It is not illegal to sell products at different prices in different EU states, but any EU resident has the right to buy that product in any of the states, if they pay the local rate of value-added (ie sales) tax (VAT), and for their own use (ie not for commercial resale), and import it into his own country without further tax. (There are separate arguments over whether a pickup full of French bought wine coming into the UK can possibly be for non-commercial personal use, but the principle is clear, and clearly covers buying a few albums of down-loaded music). I can buy CDs by mail order in France and have them posted to me by the retailer. And it has absolutely nothing to do with DRM.
3) In principle therefore, iTunes should be able to have a single EU wide operation, based in any EU country, paying VAT at the local level, and corporate taxes to the local government. As noted above, they have in fact located the iTunes Europe operation legally and corporately in Luxembourg, but the actual operations (servers, content handling, promotional activities such as free or advance downloads etc) could easily be somewhere else: Luxembourg has a long history of lawyer-led company registration.
4) But the different countries in the EU still operate different rights management systems, and the labels treat them as different markets and have presumably refused Apple the single store option, leaving them between rock 1 and hard place 1: if they were to sell at all in the EU, they had to do it on a country by country basis. That might have been OK (in EU terms) if they had allowed me (in the UK) to buy a record by a Galician folk-rock bagpiper not released on their UK store from the Spanish one, but their credit card handling processes (in the same way as for a Canadian trying to buy from the US store) in practice block me. Whether that was a careless carry over of the existing North American model, or the result of specific pressure from the labels, only access to the emails will tell. Possibly it was a trap set by Apple for the labels, to provoke just the Commission action we are finally seeing, to give them the benefits of a single operation, and cutting out some of the overhead on what we all are told is at best a marginally profitably operation.
5) So a simple answer may be simply for the Commission to order Apple to accept any EU credit card in any EU iTunes store. This would do for me. And may be the initial ruling from the Commission, against which the labels and or Apple would have to appeal, but could have no obvious grounds for doing.
6) But the big fish for the Commission is probably the single market in recorded music rights, which would inevitably lead to similar provisions for performing and broadcasting rights. This could be more controversial, in part because it might trigger the French national neurosis about protecting their cultural/linguistic special status, and the right to subsidise French artists, and to insist on a certain proportion of French-produced content on radio and TV. And as noted somewhere above, it's not a long way then to film and other video rights. That promises to be a real earner for the lawyers, and to take a pretty long time.
IANAL
