Apple Inc. has until November 3rd to respond to allegations that it is in violation of Norwegian law when it comes to selling DRM-controlled music on the Norwegian iTunes Store. Consumer Ombudsman Bjoern Erik Thon said he and his fellow regulators in the EU had agreed Norway would be the venue for a test case on the issue.

Mr. Thon said that Apple has had two years to work out a solution that would allow iTunes downloads to work on any digital media device, and that its failure to do so could be a violation of Norwegian law.

"It’s a consumer’s right to transfer and play digital content bought and downloaded from the Internet to the music device he himself chooses to use. iTunes makes this impossible or at least difficult, and hence, they act in breach of Norwegian law," Mr. Thon told the AP.

FairPlay

At issue is Apple’s DRM scheme that controls where most iTunes downloads can be played. Called FairPlay, this scheme limits the number of times an iTunes playlist can be burned, and limits playback of the download to iTunes on up to five Windows PCs or Macs, or on an iPod or iPhone.

Apple CEO Steve Jobs has said in response to this issue in the past that Apple’s hands were tied, and that it was the labels that require DRM. According to Mr. Jobs’ version of the story, Apple wants to sell songs without DRM, and reached an agreement with EMI, alone of the major record labels, to do just that.

Mr. Jobs said in an open letter published in February of 2007 that having a DRM scheme was at the behest of the music labels, who agreed to license their music catalogs to Apple with the caveat that they be controlled.

"A key provision of our agreements with the music companies," wrote Mr. Jobs, "is that if our DRM system is compromised and their music becomes playable on unauthorized devices, we have only a small number of weeks to fix the problem or they can withdraw their entire music catalog from our iTunes store."

Since Steve Jobs wrote that letter, Apple and EMI began offering DRM-free tracks from that company’s label, but the other major labels have not followed suit, even though they have offered uncrippled licenses to Amazon and other iTunes competitors.

It has been widely speculated in tech news outlets, blogs, and even the mainstream press that the labels have done this in order to put the hurt on iTunes, and lessen Apple’s strong position in the market. Few record execs have enjoyed having Apple have such a strong position in dictating their business terms.

So far, however, iTunes has remained the market leader, even with most of its offerings being crippled by DRM.

Whither the Labels?

In Mr. Thon’s frequent public comments on this issue during the last two years, the focus of his ire has been Apple. According to Mr. Thon, Apple needs to make iTunes downloads portable everywhere, and scant public pressure has come from his office, or the office of other EU regulators, on the labels for requiring the crippled downloads.

With Steve Jobs saying that his company can not license FairPlay to any and all comers because Apple would be responsible when and if it was broken, and the labels seemingly intent on making Apple the only major digital music vendor saddled with the DRM requirement, it is unclear where Norway’s cause will head or how it will be resolved.

One thing is clear, however, and that is Mr. Thon has the ability to take the case to Norway’s Market Council, a regulatory agency with all the power needed to force a company to change its trade practices within Norway’s borders. The broader EU will also be watching the case closely.