Two years ago, Consumer Ombudsman Bjørn Erik Thon criticized iTunes for the use of unfair contract terms in breach of the Norwegian Marketing Control Act.

One of the terms Thon found to be unfair, was that most of the music on the iTunes Store is only possible to play on Apple’s own portable player, iPod.

Thon says that consumers should be able to choose what music device they would like to use to listen to music purchased from the iTunes Store.

"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," said Thon.

Thon says Apple has been given enough time to change its DRM policy in Norway to make iTunes available for all portable devices. The company has made some adjustments to its contract terms to make music files play on other devices, but Thon said that is not enough.

"Even with these adjustments, the ties between iTunes and iPod by use of non-interoperable DRM technology is in breach of the law. Therefore, I have told iTunes that I will now submit the matter to the Norwegian Market Council," said Thon.

In February 2008, Thon met with iTunes representatives in Berlin where they said they wanted to sell music without DRM technology and were open to interoperability.  Since that meeting no progress on the matter has been made.

"The consumer’s freedom of choice in the online music market is an important right. This is a matter of great principal importance," said Thon.

iTunes has until November 3rd to respond before the case goes to the Market Council.

Why Norway?  The most publicized reason seems to be that the country has served as the base of Fast Search & Transfer, which Microsoft acquired earlier this year.  This gives Microsoft a ready staff of 300 people, to which it now plans to add another 50 or so.

 

Tax breaks or other incentives may be at stake, too, since Ballmer met with Norwegian Prime Minister Jens Stoltenberg.  And, although this international move has probably been in the works for months, we must admit that the American economy isn’t the most welcoming environment at the moment.

Anyway, in addition to the main office in Oslo, Microsoft will maintain outposts in the Nowegian cities of Trondheim and Tromsoe, according to an Aftenposten article.  The company hasn’t discussed the expected costs or timeframe of these changes.

Microsoft’s expansion seems, at least to some degree, to mirror Yahoo’s recent establishment of a research center in Grenoble, France.