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August 2, 2006 10:38 pm
Apple Computer has rejected claims it is acting illegally by only allowing music downloaded from its iTunes online music store to be played on its own digital music players.
The decision sets the stage for a long battle between consumer protection agencies across the Nordic region and the US computer giant.
Norway’s Consumer Council, backed by Denmark and Sweden, says the practice is illegal and wants changes to allow downloaded music to be played on any MP3 player, such as mobile phones.
Powerful consumer protection legislation in the Nordic region means that Apple faces a series of fines and possible closure if it is found guilty of breaking the law.
In a letter to Norway’s Ombudsman arbitrator, Apple rejected these claims, saying the practice was “not unfair”. It admitted, however, it should clarify the situation in its marketing.
Torgeir Waterhouse, a senior adviser to the Norwegian Consumer Council, told the FT: “Our position is that this is a tool to lock consumers into their products.”
He added: “This is just the start of a long struggle. We are at the beginning of a booming digital market and if we don’t win this one then we won’t be able to achieve a fair marketplace.”
The release of Apple’s letter followed a series of moves by the US company to try and suppress it, claiming that it contained industrial secrets. These claims were rejected by Norway’s Ombudsman, although the letter did eventually appear with significant portions blacked out. “I question why this is necessary,” said Mr Waterhouse.
The Ombudsman will now assess Apple’s response before deciding on any possible further action.
The issue has implications for Apple worldwide should other jurisdictions outside the Nordic region decide iTunes undermines consumers’ rights. However, Europe’s top antitrust watchdog has made clear that it does not, for the time being, share Norway’s concerns.
Philip Lowe, director general of the European Commission’s competition directorate, said in June: “We would not . . . regard this as an instance of major concern until we have seen further market developments.” The Commission has gained a reputation for its tough stance against big companies that abuse their dominant market position, in particular its antitrust battle with Microsoft.
However, according to news agencies, Mr Lowe said that Apple had obtained its strong market position in open competition with many similar players.
Antitrust experts have also pointed out that thousands of companies and millions of consumers depend on Windows, in contrast to the less vital iPod.
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