With Apple refusing to allow its iTunes customers to purchase music from international iTunes stores, the European Commission has confirmed the opening of an antitrust probe into its music service and the way it sells music from the major music companies.  They allege Apple has signed agreements with the record labels which contain territorial sales restrictions that breach EU competition rules, where consumers can only purchase singles or albums from their country of residence. 

For example, the iTunes store in Britain charges ~$1.56 per single, where as iTunes stores in countries using the Euro currency charge ~$1.32 per single, however customers in Britain are not entitled to purchase music from the other cheaper European stores, despite Britain being part of the EU.  The iTunes music catalogue can also vary from country to country and consumers are only limited to the music available in their country's iTunes catalogue. 

Apple's Spokesman Steve Downing mentioned that Apple would like to offer a single store that covers all of Europe, but the limitations and rights set by the music companies and publishers prevent this.  Apple has been given two months to answer issues in the letter from the commission.  If Apple is found guilty of breaching the EU competition law, they could face hefty fines up to a maximum of 10% of the company's global annual turnover. 

The company is already being pushed by Germany, France, the Netherlands and Norwegian countries to change the rules imposed by its iTunes store's music upon its customers, such as the current restriction where iTunes bought music can only be played on an Apple iPod.  Norway has already declared Apple's move as illegal back in February, giving the company until October 1st to allow compatibility with 3rd party players or penalties.  However, Apple so far said that it is only willing to open its iTunes store music to 3rd party players if the major record labels made a change to their anti-copy measures. 

At present, EMI is the only major label to drop its anti-piracy measures, which means that its DRM-free music that will be sold initially through iTunes can be freely played or converted to play on any make or model of digital audio player, regardless what audio formats it supports.

Further info can be read in this ABC news report.