Barely had Apple got over the euphoria of seeing a lawsuit against its iPhone dismissed without trial, than it finds itself facing another legal challenge, this time related to its popular iTunes service which recently trumped Wal-Mart as the biggest music retailer in the world. (See: Judge dismisses iPhone lawsuit without trial)

With its friendly user interface bolstered by the extensive portfolio of songs that Apple holds, the company has seen iTunes emerging as the favoured music retailer in several countries around the world (See: Apple's iTunes surpasses Wal-Mart as biggest US music seller). However, the business model, which has seen iTunes becoming a veritable cash cow for the tech giant, has come under legal scrutiny in Norway.

The latest move by the country's consumer rights watchdog to muzzle iTunes stems from a two-year battle that started way back in 2006. Then, Norway's consumer Ombudsmen sided with critics that claimed the Norwegian version of the iTunes store violated consumers' rights by tying content purchased there to Apple's iPods and iTunes software.

Now, it is bringing a case against Apple to the Norwegian Market Council, hoping it will somehow force the company to open up its digital rights management (DRM) technology and allow devices other than iPods to play music from iTunes.

In a letter to the council, Consumer Ombudsman Bjorn Erik Thon said that he found it "unfair" that most of the music bought on iTunes Store can only be played on Apple's iPod. "The Ombudsman demands that the consumers themselves should be able to choose what music device they would like to use to listen to music bought from the iTunes Store," he said.

"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," said Thon. "iTunes makes this impossible or at least difficult, and hence, they act in breach of Norwegian law."

Apple has until 3 November to respond to the complaint. Although Apple hasn't commented publicly on the case, Thon has stated Apple wants to sell music without embedded digital-rights management technology. However, in more than two years since Thon first stated Norway's position on interoperability for iTunes, nothing has changed.

Under Norwegian law, the Market Council can compel companies to change trade practices, and levy fines and penalties against companies that do not comply. Apple CEO Steve Jobs has said in the last he would prefer to do away with DRM on music sold via iTunes altogether, but that record labels weren't willing to go along with the idea.

The Market Council is expected to issue a ruling in early 2009. If it weighs against Apple, the company may have to decide whether to withdraw from the Norwegian market, offer a stripped down version of the iTunes store that only carries DRM-free content, or carry on as usual in Norway, enduring any fines or penalties may be assessed against it.

This issue of DRM and its limitations had elicited comment from Apple CEO Steve Jobs last year. In a letter posted on the company's website, Jobs explained the necessity of DRM by saying "there are many smart people in the world, some with a lot of time on their hands, who love to discover such secrets and publish a way for everyone to get free (and stolen) music."

"Much of the concern over DRM systems has arisen in European countries," Jobs said. "Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free." Jobs goes on to name Vivendi, Universal, EMI, Sony BMG, and Bertelsmann.

"Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace," said Jobs. "Apple will embrace this wholeheartedly."