The hearing comes after the Commission issued a statement of objections on Apple s pricing policy to both the electronics company and the world s four music majors on March 30. That came after a complaint to the Commission by Which?, formerly the Consumers Association.
The issue for the Commission is that it must prove that Apple is dominant enough to justify regulatory intervention. Although Apple has an estimated 80 per cent of the digital download market, as a retailer it represents a small share of the market when the likes of HMV, WH Smith and Wal-Mart s Asda are included. Apple accuses the music companies of preventing it from operating a pan-European, one-price service.
A spokesman said yesterday: Unfortunately, the music and publishing companies said they couldn t license us their music on terms that would enable us to achieve this. Apple is simply abiding by these licensing terms and national copyright laws. All four music majors say that there is nothing in their sales agreements to prevent Apple opening up its cheaper European stores to Britons.
The majors say that they prevent Apple only from selling songs in countries where they do not have the rights and that they should be allowed to introduce staggered release dates so that a launch can be timed with promotional tours. One music major, which asked not to be named, said that its agreement with Apple specified only that it receive a set proportion of the retail price, leaving Apple discretion as to the price that it charged. Nothing in the agreement barred Apple from cutting its price in Britain to eurozone levels.
Apple enforces the rules by requiring customers to have a credit or debit card registered to an address in the country of the store in question. Officials of Britain s Office of Fair Trading will be at today s hearing. Details are expected to emerge in coming weeks, but no date is set for a decision.
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