Apple fails to meet Norwegian iTunes demands

Norway's Consumer Ombudsman made Apple's 20-page letter public Wednesday evening. It had obscured parts of the letter, under Norwegian laws that make it possible to withhold certain information from public access.

The obscured paragraphs include a summary of iTunes history, an explanation of the reasons for choosing English legislation as that applicable for all European iTunes stores, and a whole paragraph detailing fulfillment of iTunes obligations.

The ombudsman also blacked out a passage in the first point of Apple's explanation of why it finds it reasonable to lock iTunes customers to a single brand of music player, the iPod.

It is this policy which prompted the consumer authorities of Norway, and then Denmark and Sweden, to send Apple a letter in June warning that some of the terms and conditions applied by its iTunes Music Store might conflict with the countries' national marketing laws.

Norwegian consumer authorities are unsatisfied with Apple's reply. They will now cooperate with their colleagues in Denmark and Sweden about which further steps to take in the process.

"In their reply, iTunes show a will to change and to keep up a dialogue, but a lot of issues are still at stake before agreement can be reached on all points. Important issues such as a disclaim of responsibilities and the locking of the product to iPod remain unsolved," said Bente Řverli, a section leader for Norway's Consumer Ombudsman.

Apple partly met some of Norway's requirements in its letter, such as the demand that purchase conditions may not be altered for music already purchased: Under paragraph 38 of the 20-page letter, Apple's lawyers explain that "iTunes plans to change service terms and conditions to make clear that alterations of such terms and conditions can only apply to future purchases, and not to content already obtained."

But a number of preconditions will still apply. For example, in the case that iTunes should cease to exist, users will not able to authorize music access for multiple machines.

Řverli said that, although agreement could be reached on some of the issues, several very important consumer issues remain unsolved.
"A lot of work remains as regards a regulation of iTunes' disclaim of responsibilities. We also maintain that the DRM used to prevent illegal distribution of music should not limit consumers' choice of music player for music purchased legally. On these issues we still have legal dispute", says Bente Řverli.

According to Norwegian Consumer Council senior advisor Torgeir Waterhouse, Apple shows little, if any will at all to adjust its lock-in policies.

"It seems clear to us that iTunes intend to continue their unfair practice of using the DRM as lock-in technology under the cover of being a copy protection-only scheme. The position they're signaling now is the direct opposite of the consumer-friendly attitude Steve Jobs put forward in 2002 when he told MacWorld that "If you legally acquire music, you need to have the right to manage it on all other devices that you own," said Waterhouse.

Waterhouse notes that the second-largest online music store, eMusic, offers legal downloads without DRM. He calls on iTunes to return to the attitude Jobs put forward in 2002. Only then will they fully live up to the responsibility on the DRM issue that comes from being one of the leading companies in the digitalization of our society, according to Waterhouse.

The road ahead for the Norwegian Consumer Council on the iTunes case will be to further study the Apple/iTunes reply and work from there to achieve further improvements in the terms of service.

"Obviously there'll be a lot of work on the DRM issue which clearly is the area where iTunes Music Store is most reluctant to offer the consumers a fair deal. We're now waiting for the Ombudsman's assessment which we expect to fully support the Norwegian Consumer Council on all issues," said Waterhouse.