France deal could be boon for iTunes

Royalties body willing to drop territorial restrictions

BRUSSELS -- Apple's iTunes online music store may reach more customers throughout Europe after the body tasked with collecting artist royalties in France agreed to allow counterparts elsewhere to license its catalog.

SACEM, which collects royalties for about 128,000 artists, said it would be willing to drop territorial restrictions and allow national counterparts to license its repertoire, European antitrust regulators said Tuesday.

If Pan-European licensing becomes a reality, Apple, which controls slightly more than half of global digital music sales through iTunes, may look at broadening access to the system, European Competition Commissioner Neelie Kroes added.

"If iTunes was readily able to license rights on a multiterritorial basis from publishers and collecting societies, it would consider making its content available to all European consumers, including those in EU countries where iTunes is currently not available," she said in a statement.

Apple does not allow European users to buy from iTunes online stores outside their country of residence.

Acknowledging the difficulties faced by online stores, the executive European Commission said music licensing practices and the current copyright framework limited what consumers could buy on the Internet.

"We have received complaints from Polish consumers that they can't buy music from iTunes," commission spokesman Jonathan Todd said.

The commission, tasked with ensuring that companies do not distort competition in the 27-country European Union, in July gave 24 European collecting societies 90 days to end their national monopolies or face daily fines.

"It is definitely a good step in the right direction of pan-European licensing," said Craig Pouncey at law firm Herbert Smith.

Sounding a note of caution, he said the eventual outcome would depend on whether the companies concerned could deliver what they said they were willing to do and also on subsequent consultations over online distribution of music.

The commission said interested parties would have until June 30 to comment on the licensing issue.

The commission's investigation into the collecting societies last year followed complaints from media group RTL and British online music provider Music Choice.

The commission said record company EMI was ready to entrust rights managers to offer its repertoire for the European economic area.
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