The European Commission has launched an antitrust probe into Apple's iTunes, its method of selling music over the Internet, and its agreements with record labels. The Commission said the distribution agreements Apple has inked with record labels to sell their music on the iTunes Music Store in European Union countries "contain territorial sales restrictions" that violate its competition rules.

However, some legal experts are pointing to a possible double standard. So what is the EU's real motive in its Apple probe? Is Apple really doing anything different than its vinyl record retailer predecessors? Or is the EU looking to make an example out of yet another American technology giant?

Same Old Model

The music industry has always had a territorial licensing model, according to Fran篩s G. Laugier, corporate transactions and international business attorney in the Redwood City, California, office of Ropers Majeski Kohn & Bentley. Laugier is a member of the French Bar and an advisor to the French Ministry of Economy and Finances.

Since Value Added Tax rates vary from country to country in the EU, it follows that prices also vary. But that's only part of the story. According to Laugier, it seems as if music labels and publishers have long licensed copyrights in different EU countries for different fees.

Laugier suggested this old model might be what Apple was referring to when it stated publicly that it wants to operate one site for the entire European bloc, but is forced to depend on the record labels to grant it those rights. Apple is maintaining that its actions do not violate EU law and that the company is working with the Commission to resolve the issue.

Million-Dollar Question

Laugier's take on the issue begs a question: If the EU never challenged the record label practices when records were sold through traditional distribution channels, why is this investigation emerging now that songs are sold in digital format?

The Commission's answer is that customers are restricted in their choice of where to buy music, what music is available, and at what price because Apple restricts them from downloading singles or albums from iTunes sites anchored in other countries. But is that all there is to it?

"European nations love to regulate commerce, with a pronounced desire to make everything equal, and to protect the consumer," Laugier said. In the Apple case, he added, it is easy to imagine that EU officials would like to see the price of digital songs be the same throughout the 27 European member states.

"They never thought of it in the days when vinyl had to change hands for a song to travel," Laugier noted, "but a new medium seems like a new opportunity to indulge in their favorite pastime: regulate commerce and accessorily, do battle with corporate America."