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Norway Ombudsman Says iTunes DRM Is Illegal

Wednesday, January 24th, 2007 at 11:10 AM - by

Norway's Consumer Ombudsman has ruled that Apple's FairPlay digital rights management technology violates the country's laws by locking songs downloaded from the iTunes Store to the iPod. OUT-LAW.com reports that the Ombudsman wrote a letter to Apple warning that the its DRM technology must be opened to competitors.

Torgeir Waterhouse, senior advisor at Norway's Consumer Council, commented "iTunes Music Store must remove its illegal lock-in technology or appear in court. As of right now we're heading for a big breakthrough that will hopefully pave the way for consumers everywhere to regain control of music they legally purchase."

Norway's government determined that DRM is considered a part of the contract terms for downloading music, and not just copy protection. As such, FairPlay falls under the Norwegian Marketing Control Act requiring balanced and fair rights for the consumer. In this case, "balanced and fair" is being interpreted to mean that music purchased at the iTunes Store should be directly supported on all MP3 players.

Bjorn Erik Thon, Norway's Consumer Ombudsman, first notified Apple that the licensing terms for downloaded songs conflicted with the country's laws in June 2006. Apple was given until August 1 to reply to the complaint.

Mr. Thon feels that the only options open to Apple are licensing FairPlay to any company that wants to produce iTunes Store-compatible players, develop an open standard DRM technology with other companies, or drop its DRM technology completely. He did, however, miss another option open to Apple: Shutting down Norway's iTunes Store.

Removing the copy protection technology that is already in place probably won't sit well with recording labels that are already concerned about music piracy and slowing CD sales. But the idea of selling DRM-free songs is something that the labels are at least beginning to think about.

The situation in Norway is likely to get sticky for Apple and other legitimate music download services, especially since Sweden and Denmark are supporting Norway, and recently French and German consumer groups began openly showing support, too. Should Norway force Apple to open its DRM technology, the move would eventually cascade out to other companies using proprietary copy protection schemes, including Microsoft and Sony.

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Small White Car said:

member since 02 Jul 2004 with 1953 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 1:08 pm

I've heard it said that if these kinds of laws pass, Apple should just shut down the iTunes store in that particular country. Doing that, however, leaves Apple open for critisism.

I think they should leave the iTMS open there, but only sell AACs without Fairplay DRM on them.

Naturally, the labels will all pull their music off the Norway iTune store, but that's not Apple's problem, is it?

So when everyone in Norway complains that there's only 50 songs on the iTunes store, Apple can rightly say "Go complain to the music labels." Let's face it, it's the music label's desire for DRM that's the problem here. Let the scorn fall on them if judges make these kinds of rullings.

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A guest said: (hide)

Wed Jan 24, 2007 1:21 pm

This makes all the Windows Media based online music stores illegal as well since DRMed WM files will not play on Macs or iPods.

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Small White Car said:

member since 02 Jul 2004 with 1953 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 1:29 pm

Anonymous wrote:
This makes all the Windows Media based online music stores illegal as well since DRMed WM files will not play on Macs or iPods.

I haven't read exactly what this case is, so I might be wrong, but I don't think that's correct.

The difference is that Microsoft licences their DRM to anyone who wants to pay for it. So Apple COULD put Windows Media DRM on their iPods if they want to. They never would, but Microsoft would let them if they wanted to.

Whereas companies have asked to licence Fairplay for their own devices and Apple has told them 'no.'

That's a fine point, but I think it's enough of a difference to matter in this kind of case.

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A guest said: (hide)

Wed Jan 24, 2007 1:37 pm

Apple isn't the one who wants the DRM, it is the record companies. If Norway enforces this, Apple might keep iTunes open, but only sell songs from companies that allow sales with no DRM. This might loose all the major labels, but be a big publicity boon for the independents.

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A guest said: (hide)

Wed Jan 24, 2007 1:39 pm

So can Apple agree to license FairPlay but at a prohibitively high price and be compliant? Let them charge $100 per device for the ability to play Fairplay, or at least more than their profit margin for iPods (which could be in excess of $100 on the high-end units).

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der passant said:

member since 06 Dec 2006 with 6 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 1:46 pm

I could understand Norway's position if Apple is the only supplier of music. But since they are not how can this be unfair. There are alternatives.

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Bosco said:

member since 03 Jun 2002 with 999 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 2:01 pm

August 1st, 2007 -- APPLE. INC. RESPONDS TO NORWAY's OMBUDSMAN. In a short statement released by Apple, Inc this morning, CEO Steve Jobs said, "oof dah!" (which is Norwegian for "our tit is caught in the ringer").

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A guest said: (hide)

Wed Jan 24, 2007 3:01 pm

Guest wrote:
This makes all the Windows Media based online music stores illegal as well since DRMed WM files will not play on Macs or iPods.

I'm afraid it's correct as all Windows media sites require IE6 or greater and there is no Mac version so they are all illegal as it stands by Norways standards. What Norway fails to understand is that the american record labels require DRM for there songs to be sold online and that's why Apple has there DRM to begin with. I think Apple will just pull the store offline and let them fight it out. No loss to Apple really since they have plenty of customers in the U.S. Just more pirating in Norway,Sweden, Germany, and France is what it sounds like to me.

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 3:08 pm

Ah once again government comes to the rescue of its citizens who are too stupid to make their own decisions. I suppose its also illegal that Apple sells an OS that only runs on their own hardware. I mean, sure, the tight control of the two systems is the foundation for what makes the products superior, but Apple shouldn't have the right to offer a superior product. And sure, people could simply notice the fact that iTS downloads only play on iPods and, if they didn't like that, choose to buy their music from somewhere else, but why take the chance that someone might NOT notice. The only option is to protect every Norwegian from possibly making a mistake and buying something that might not be best suited to their particular situation! And THAT is much more important than businesses being free to offer superior products and technologies to every Norwegian.

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A guest said: (hide)

Wed Jan 24, 2007 3:13 pm

Small White Car wrote:
Anonymous wrote:
This makes all the Windows Media based online music stores illegal as well since DRMed WM files will not play on Macs or iPods.

I haven't read exactly what this case is, so I might be wrong, but I don't think that's correct.

The difference is that Microsoft licences their DRM to anyone who wants to pay for it. So Apple COULD put Windows Media DRM on their iPods if they want to. They never would, but Microsoft would let them if they wanted to.

No, if there saying people want to download music from iTunes then it should be true for all the Windows sites. How does a Mac user download from a site that requires IE6? There is no IE6 therefore all the Windows sites are illegal as Norway claims Apple is illegal. No access is no access no matter if it is the DRM or in general.

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Edison Carter said:

member since 10 Aug 2006 with 228 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 3:44 pm

Biff wrote:
And sure, people could simply notice the fact that iTS downloads only play on iPod.

I know what you mean Biff, but they don't "just play" on iPods. A user can play them on their Mac or PC. They can also burn them to disk and play them on a CD player. Licensing issues aside they further rip that music CD into MP3 files. Apple doesn't make it real easy to move iTS music to other formats, but it is doable so it is not like Norwegians are locked in to the iPod.

Side bar on Guest's comments about IE6. My wife is taking an on-line college course, business law, that requires IE6. If on a Mac then it requiresIE or Navigator running OS8, get that OS8!. She can do everything on the course using Safari except check her test results. For that she fires up the HP laptop we have for those rare times we need something under Windows. As far as I am concerned these course authors are in violation of the equal access laws. We have been discussing user interface, you should the horrid web pages for these online courses, they are very confusing.

"Oh Lord, protect us from the wrath of the Northmen"

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Tiger said:

member since 17 Jun 2003 with 945 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 4:16 pm

I'm embarrassed that the country of my ancestors has turned into such a haven of asshatery. They really got this ruling wrong.

Word to Apple, shut down the iTMS store there. It's not worth the legal hassles for such a small population. The bulk of your sales are still in the US. Japan will follow what the US does. China could care a less.

For these countries to come back after 2 or 3 years and say "oops, we screwed up and you cannot use that business model here, even if we did tell you it was legal" is just ridiculous.

Do I want DRM? No. That's not my point. My point is they stuck their noses into a company's private business and are telling them they have to face either shutting it down, or letting it go into oblivion. Yes, that would happen. Is it any wonder NO other music service has been able to survive? Because either nobody wants to use it, or it's lousy. Why should Apple HAVE to make their format available to other players? It's not like Microsoft has to make MS Access available to any platform. And Windows Media Player has to be made iPod compatible. The list is endless. So is their stupidity.

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A guest said: (hide)

Wed Jan 24, 2007 5:04 pm

This demand is bogus unless these countries demand that all Music download services (such as Napster and later on Microsoft) are also open and "support" not only the iPod but all MP3 players made now and in the future.

Gee and why do Mac users have problems getting on certain sites in Norway that don't support Safari? Shouldn't that be legislated also?

Otherwise Apple should just shut the iTunes store down.

The iPod is developed as a commercial product. I'm amazed that a government would even dictate such a matter. I'm guessing Norway has a lot of time on their hands.

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Edison Carter said:

member since 10 Aug 2006 with 228 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 5:42 pm

Guest wrote:
I'm guessing Norway has a lot of time on their hands.

It is either the long winter or it comes from eating lutefisk

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A guest said: (hide)

Wed Jan 24, 2007 6:19 pm

I would have thought that being able to burn the music to a CD without DRM would be enough to satisfy the law, as one can then freely rip it onto anything, including back into itunes as an unencumbered MP3.

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Bryan said:

member since 11 Jun 2001 with 7330 posts, TMO Staff, send him a message or view his profile

Wed Jan 24, 2007 6:38 pm

Anonymous wrote:
Apple isn't the one who wants the DRM, it is the record companies. If Norway enforces this, Apple might keep iTunes open, but only sell songs from companies that allow sales with no DRM. This might loose all the major labels, but be a big publicity boon for the independents.

I know this is what Steve Jobs told us when he launched iTunes, but the reality is that Apple has specifically used FairPlay to lock iTunes downloads to the iPod.

In other words, Mr. Jobs' comments were somewhat of a red herring. He most likely did tell the labels that they shouldn't want DRM on their songs (just as he said on stage), but once DRM became part of the deal, it was also leveraged by Apple to further the company's own agenda.

This makes Apple a full-fledged partner in the DRM biz, as opposed to an unwilling participant whose hands are tied.

I have little doubt that Apple will close the iTunes Store in any EU country that tried to force them into opening up FairPlay to its competitors, unless it changes its entire iPod/iTunes business model.

Bryan

Editor

iPO

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nealg said:

member since 22 Mar 2006 with 120 posts, unranked, send him a message or view his profile

Wed Jan 24, 2007 11:43 pm

First of all, I am sure that Apple will do what is best for Apple from a legal and business standpoint.

There are many different scenarios about what Apple may/can do. Some of it depends on exactly what kind of deal they have with the record companies. There is a possibility that Apple is contractually obligated to just have iTunes run with an iPod. If that is the case, then if Apple can't get some sort of waver from those music companies, then the music from those companies would be pulled from the Norwegian iTunes site and just keep iTunes software to run their iPods. If that would happen, then the consumer that Norway is trying to "protect" may be more harmed by being unable to buy the music online. Or, Apple could just choose to shut down the iTunes store to be in compliance with the ombudsman. I am sure that they might try something else to get back at Apple because this really couldn't be about consumers being harmed by not being able to move their music around because they can move it around. It is an attempt in a roundabout way to get Apple to open up iTunes.

If Apple would shut down their iTunes site in Norway, it would be interesting to see what the other countries would do. Would Germany and France stand up to Apple or would they cave in this scenario? But it gets more compllicated now that Apple has an iPhone/iPod/WiFi device that should be ready to sell in Europe at the end of the calender year. Will Apple want to rile European regulators right before they need something approved in Europe? Or will the Europeans govts. cave like they have been known to do? If the US and the trade organizations feel this is unfair, will this cause any retaliation?

The thing I am not sure about is how Apple could just open up iTunes for Norway and leave other countries out. Could Apple make an export option to export songs bought to another player and format if it is indeed just the fact that music bought on iTunes can't be transferred easily to other players? Would that satisfy the ombudsman and DRM? I don't think that charging an exorbitant amount for FairPlay will pass muster. Or maybe Apple could make a crippled version of iTunes available for other players so they could only play music bought from iTunes through iTunes on the other players? I don't think that Apple would want other players to have easy access to iTunes because it is really the software that makes the hardware as good as it is and it would take away from some of its competitive advantage. So many studies say that so few consumers buy so few songs per iPod I can't see how this is really harmful unless everybody opens up all their standards. So what is the real motive behind this? It will be interesting to see how this will eventually play out.

If these types of ideas would be transferred to other markets, wouldn't MSFT have to open up its kernel to Vista to the other security companies to allow the consumer the choice of security companies? I would think this is more important than just transferring a couple of songs that you bought online to a different player. There is plenty of media out there that cannot be played on a Mac. Should the other companies be forced to come up with mac versions of the software so that if the next computer the person buys is a mac, that they can just transfer the files and have it played? Or am I off base with this.

The one thing I am sure of is that Apple has something ready and in the wings if this does go through.

Neal

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A guest said: (hide)

Thu Jan 25, 2007 5:56 am

Quotes:

”Ah once again government comes to the rescue of its citizens who are too stupid to make their own decisions”

”I'm embarrassed that the country of my ancestors has turned into such a haven of asshatery”

”I'm guessing Norway has a lot of time on their hands”

”It is either the long winter or it comes from eating lutefisk”

Ah, what a delight to read high level remarks on behalf of real globetrotters experiences. A superior level of debate.

From reading norwegian newspapers, part of the controversy seems to stem from the unbalanced license-agreement, where you are warned that your rights as a user may be changed in the future. Of course you can easily work this around by burning and reimporting the protected files as unprotected mp3.

Lafael

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burreyeann said:

member since 25 Feb 2005 with 1124 posts, unranked, send him a message or view his profile

Thu Jan 25, 2007 10:24 am

IF you could only play and purchase songs for your iPod from iTunes, then it would be a monopoly. Some people and governments make it sound like the only place to purchase music is from iTunes.

From Apple's tech specs:

Quote:
Audio formats supported: AAC (16 to 320 Kbps), Protected AAC (from iTunes Store), MP3 (16 to 320 Kbps), MP3 VBR, Audible (formats 2, 3, and 4), Apple Lossless, AIFF, and WAV.

Sounds like a monopoly to me...NOT!!

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A guest said: (hide)

Fri Jan 26, 2007 1:15 am

burreyeann has the right of it.

Let's look objectively at the situation. Further, let's assume that the iPhone and iTMS are indpendent entities.

First, the iPod. The iPod can use iTMS music. It can also use music from other sources. So no consumer lock-in there.

What about iTMS. iTMS sells music that is only playable on Mac, Windows, and the iPod. However, it is not aggressively monopolistic with the product (music), since the same songs can be purchased from other sources. If a particular song was only available via iTunes, and especially if Apple used their market share to arrange for exclusive deals with suppliers to lock others out, then there would be grounds for complaint. However, the current situation is (mostly) "If I want music for my non-iPod portable digital music player then I need to buy it from another supplier". So buy from another supplier!

There's competition available for songs for iPod (iTMS, 3rd party), and songs for 3rd party players are generally available from non-iTMS sources. In the current environment, I don't see the problem.

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