They don't have to be a bona fide monopoly everywhere, you know. Palm would have no problem dragging Apple to court in the EU, and they also would have no problem winning the case.
"Under EU law, very large market shares raises a presumption that a firm is dominant, which may be rebuttable. If a firm has a dominant position, then there is "a special responsibility not to allow its conduct to impair competition on the common market". The lowest yet market share of a firm considered "dominant" in the EU was 39.7%".
iTunes Store is the world's largest online music store with a market share of, what, 70-80%? And the iPod's market share is around 75%? So... iTunes Store is locked to iTunes, iTunes is locked to iPods/iPhones and vice versa. That right there is frickin' DEFCON 1 as far as dominant position and impairment of competition goes, and I'm surprised the EC hasn't slapped Apple with a billion dollar fine and Nuremberg Trials II already, seeing as they raised concerns about the closed iTunes ecosystem in 2007. Then again they move very slowly...
Except there is nothing stopping you from using music downloaded from the iTunes store on other devices...you just have to copy and paste it in a conventional sense instead of syncing it.