• Marketwatch, Thursday, April 5, 2007 10:45 AM

Just a day after Apple and EMI Group PLC announced an agreement to cancel DRM copy protection on EMI-owned music files, the European Union took the first steps toward an antitrust lawsuit against Apple and its recording company partners. The E.U. investigation alleges that the complex web of intellectual-property agreements in the recording industry is anti-competitive. For example, digital downloads in the U.K. and Denmark are much more expensive than elsewhere in Europe because rights restrictions are different in each country; the E.U. thinks digital music should cost the same around the globe.

Jupiter Research analyst Mark Mulligan believes the suit could be the catalyst that forces a seismic shift. "This investigation won't just deal with Apple or the major record labels," he said. "It goes right throughout the music value chain, and it could be very disruptive."

An E.U. spokesman said the focus of the suit is more on the major record companies than Apple, which he said "imposed" various territorial restrictions on Apple's iTunes. Meanwhile, Marketwatch points out that the agreement between Apple and EMI came after a serious of challenges from European countries on DRM; history may well repeat itself.

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