Digital Music Ruling Ends Apple's Threat to Shut Down Itunes

A panel of US judges has decided to freeze the amount of royalties paid to songwriters for tracks downloaded from the internet ? halting Apple's threat to close down its iTunes music store.

Although the decision is not due to be made public until Monday, the Guardian understands that the Copyright Royalty Board in Washington has approved a 9.1 cent rate for songwriters on all physical and digital music sales in the US.

Lobby groups on both sides had been arguing for a change in the amount of royalties due to songwriters ? with Apple even claiming that it would be forced to shut down iTunes if there was an increase.

Artists groups had asked for the amount due to songwriters from any sale to be increased from 9 cents to 15 cents, while digital media groups had lobbied for the sum to be dropped to less than 5 cents per track.

Both camps became increasingly fraught as the decision date drew closer.

Earlier this week it emerged that Apple vice-president Eddie Cue had told the CRB that an increase would most likely force the company to absorb the extra costs, which he called "no alternative at all".

"Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate if it were no longer possible to do so profitably," Cue said.

Despite being issued in a letter to the CRB 18 months ago, Apple's statement resurfaced earlier this week as both sides engaged in a bitter public relations battle as they attempted to sway the opinion of the three-person board.

The agreement only affects downloads made in the US, with the music industry elsewhere in the world operating under a variety of different regimes and price structures.

It is not the first time the panel has courted controversy, however.

Earlier this week a coalition of online radio stations forced the US Congress to repeal the board's contentious 2007 decision to drastically increase royalty rates for music streamed over the internet.