The European Commission believes online music and video download services will be hampered in growing in Europe unless technological obstacles are overcome, it said in a report yesterday.

However, critics declare the EC isn't facing the biggest obstacle to bringing such services to the territory – the maze of sometimes conflicting contractual and copyright issues that face operators – such as Apple and Napster – in bringing services to this territory. Some critics term this a "failure of the internal European market".

Technology companies want Europe to deliver an EU-wide licensing agreement valid across the 25 nations. This would massively simplify the task of launching services here. Apple has confessed that Europe's hall of contractual mirrors has delayed the launch of iTunes Music Store here.

"Critics complain the cumbersome process has pushed back the market for music downloads at a time when the industry says Internet piracy is contributing to a plunge in CD sales," Reuters reports.

The Commission is collecting information until June 21.