The Crier

Apple, DRM, the EU, and Other Boring Acronyms

Apple may be about to experience its first major legal bruising at the hands of the EU

Forest Casey · Tech · Apr 05, 2007

Mac addicts will get excited about anything.

About twice a year over the lifetime of the iTunes Music Store, the giant projection screen that provides the background to Apple CEO Steve Jobs’ keynote addresses would display brand new branches in faraway countries.

Each country got its own Aqua-style button, complete with beveled edges and fake lighting, which would slide up the screen and join the messenger bag–sized collection of flag buttons already there. And with each new country, the keynote attendees would scream and shout with unbridled elation — Luxembourg! Yessss!

One by one, Steve would call out the countries of the European Union just as, long ago, the bells in Charleston, SC tolled for each new state to join the Confederacy. One by one, flags slid up the screen — Norway, Sweden, Denmark, Switzerland, Austria, Belgium, Finland, Greece, Italy (this is a lot, right?), Portugal, Spain, the Netherlands and, yes, Luxembourg.

It’s unlikely that Apple will escape the EU with just a slap on the wrist.

But the exuberance of the Mac faithful never really made sense to me. Sure, it was great that our European comrades were only one click away from downloading nearly any song you’ve ever heard, but the American consumer wasn’t affected in the least bit. In fact, you still can’t browse international stores, even if you’re willing to pay the exchange rate. So J-Pop fans have to go elsewhere to purchase music, even if the same company operates a store on this seemingly global thing called the internet.

This is annoying, to be sure. But I never thought it was worth much more than a tersely worded email until two days ago, when the European Union officially launched an antitrust probe into Apple’s international business practices.

You see, the EU’s main problem is not the different songs in the iTunes Music Stores in its member states; it’s the difference in pricing for the same songs. Even though the members of the EU are supposed to be treated equally, there is a difference of 11 pence per song between the UK iTunes store and the rest of the EU. And that whole “different stores, different catalogues” practice is illegal within the EU. And it seems like someone in Cupertino forgot to make up a button for Slovenia, because their membership in the EU grants them the same rights and privileges as the others.

While this all sounds like a list of meddling details being obsessed over by a group of EU bean counters, it’s still not likely that Apple will escape with just a slap on the wrist. The EU can potentially fine any company that does business within its borders up to 10% of its global profits. Microsoft recently had to write a check to the EU for close to a billion dollars.

So, the business journalists of the world’s newspapers have been sharpening their adjectives for a potential stain on Apple’s (mostly) spotless record. And this is bad for everyone. Even the citizens of Luxembourg.