European Union Warns Online Music Biz

(CN) - European Union antitrust regulators told the music industry on Tuesday to change its licensing rules that restrict online music stores such as iTunes from selling tunes in Europe. Apple has said it would sell music downloads in Europe if it could license them all at once to members of the European Union, but the EU requires country-by-country licensing, which complicates the deals.

EU Competition Commissioner Neelie Kroes encouraged publishers and music copyright groups, also known as "collecting societies," to quickly adapt their licensing procedures to better serve the international online environment. The push is part of an effort to give consumers broader access to Internet commerce and to prevent further lost revenue.

In Europe, music rights are sold separately in each country, preventing music retailers such as iTunes from setting up a single venue that serves all of Europe. Instead, retailers must obtain licenses from each EU member state where they wish to sell music.

A typical example of county-specific licensing is "staggered releases," where record companies make new songs or albums available country by country within a short time in order to maximize marketing efforts, short-changing consumers in the process.

Kroes welcomed recent progress made toward pan-European music licensing from the French collecting society SACEM, which has agreed to entrust other collecting societies with the licensing of its repertoire and to act as a non-exclusive rights manager for publishers and other collecting societies.

Multinational record company EMI has also expressed its readiness to adapt by entrusting rights managers to offer its repertoire for the whole European economic area.

Apple has agreed to consider making its iTunes content available to all European consumers if it can license rights from publishers and collecting societies on a multi-territorial basis.

After being cited for violating antitrust rules, collecting societies were told last July by the European Commission to stop restricting artists from collecting payments from agencies outside their own countries.

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