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Europe probes \'rip off\' iTunes pricing

updated 08:45 am EST, Fri February 25, 2005

EC probes iTunes pricing

The European Commission (EC) has confirmed it is looking into allegations that Apple's iTunes Music Store by charging them more to download the same song than it charges other European music buyers. In the UK, the iTunes Music Store charges customers 79p (€1.14) to download a single track. The same song costs €0.99 when it's downloaded from Apple's other European music shops. Apple's pricing policy was brought to the EC's attention in December 2004 by the UK's Office of Fair Trading (OFT), which was itself made aware of the situation by a consumer group. The issue the commission must examine is Apple's refusal to allow cross-border shopping, which could be in contravention of European Union laws. The EC last year called on Europe's music licensing agencies to develop a common framework and pricing structure.




by MacNN Staff

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  1. njfuzzy

    Joined: Dec 1969

    0

    Scapegoat

    Apple is being targeted because they have been getting a lot of press.

    If this goes to trial, it will become obvious very quickly that the price gouging is thanks to the european equivalents of the RIAA, who have long set different pricing for different parts of Europe.

    I am somewhat surprised Apple haven't already publicly defended themselves with this information. Possibly their contracts with these organizations does not allow it.

    Trust me. Apple wants to have a single store for Europe, with a single catalogue and a single price. That is what they said they were negotiation for, long before the single-country stores arrived.

  1. vortexlift

    Joined: Dec 1969

    0

    Pricey Europe

    Maybe they should investigate OPEC next as to why gasoline costs as high as $10 a gallon over there and only around $2.50 here (give or take a quarter or 2).
    : O
    Ok. OK. Half that is from the VAT taxes they charge their own citizens. So I guess it can't be illegal then. Governments can't be monopolies. Right?
    No, only evil american companies can attain that uber distinction. : [
    Seriously, it's free markets economics at work and they know it. Apple will charge what it can. Currently, there's no let up in demand to cause Apple to lower prices. Nor enough competiton either. Also, Apple had to negotiate royalty fees with each and every european country/market so the cost structure is different for each and every country. It's all just politics and the EU acting tough on american companies as leverage in trade battles with US and look good to the locals.

  1. Toyin

    Joined: Dec 1969

    0

    ????

    If Apple really is 'price gouging' the UK market (which I doubt) then it's worth the investigation. If they've got a legitimate reason for the price differential AND this starts to get messy, they should just pull the iTunes store from the UK.

  1. Grrr

    Joined: Dec 1969

    0

    But..

    Scrapegoat, they have already defended themselves in public. Although the excuse was not a particularly good one.
    They basically said that everything in the UK costs more, Higher costs of living etc. So iTunes pricing is inline with that.
    c*** excuse as far as I am concerned, No wonder the UK is so expensive if companies just keep prices high, simply because they can.
    Having said that.. Regardless of what a track costs anywhere else, I don't consider 79p as expensive. But sure, to be fair is to be better. So I think Apple would be wise to bring their prices a little more inline with the rest of Europe.

  1. trikster

    Joined: Dec 1969

    0

    vortexlift - you're wron

    The investigation has nothing at all to do with differential pricing and certainly nothing to do with acting tough on American companies.

    The member states of the EU are supposed to be a single market. That means that a company in one state can't refuse to sell a product to a citizen of another state. A UK citizen should be able to buy a track from ITMS from the Irish store and pay the Irish price and whatever taxes are levied by the Irish government. That's what Apple is blocking.

  1. benj

    Joined: Dec 1969

    0

    pricey europe 2

    The EU needs to manage its negotiation strategies better. The Euro
    might be a good idea, but unless there is a method, there is no
    end to this madness. But here's an idea- sell 'em in dollars, and
    add "an adjustable" rate per each Eurostore via the market rate and
    appropriate tariff. In the US taxes per state is applied(at least on some of my invoices from Apple).
    I'd love to do cross border shopping..isn't that what the internet is FOR? Maybe it's just Apple trying to recoup legal expenses from Apple Corp.
    (that's American humor, folks)...
    and I just filled up my tank with US $1.82 low octane.

  1. njfuzzy

    Joined: Dec 1969

    0

    You don't get it.

    Apple can't sell songs in the up for less than 79p. The people licensing the songs to them won't let them.

  1. henryblackman

    Joined: Dec 1969

    0

    trikster YOU are wrong

    Apple are abiding by their agreements. UK record companiesn cannot, by law, allow the purchase of a CD from somewhere else in Europe, to be made in the UK. They do not have the rights to the music in the UK.

    Eg. EMI Germany has the rights to sell music in Germany (with the artist, with the US "parent" company), but not the UK. EMI UK has those rights.

    As such EMI Germany and EMI UK can charge different prices. They always do. A CD in the UK costs $19.00, a CD in France can cost as little as $15.00 for the SAME THING. It's hardly Apple that is the problem.

    Anyway, 79p until a couple of weeks ago, was the cheapest music store anyway. MSN Music, for example, charged 99p. How is Apple doing anything wrong.

  1. vortexlift

    Joined: Dec 1969

    0

    trikster- u naive

    If there is a single pricing structure and therefore one market across the EU , then why did Apple have to negotiate with each and every country/market in the EU to open each iTunes Music store? Because Apple is a m********? No, because the EU don't have one. Did you read the article? The EU recommended that the music industry setup a single pricing system for royalties across europe. That hasn't happened yet. So U R wrong.
    And why does gasoline cost more in Netherlands than it does in UK? Why doesn't that bother the EU? Hello! Because the EU lets the member countries tax their citizens. Do u think that Apple gets taxed on the sale of music from iTMS? You bet. Does the UK tax the same rate as Checkoslovakia? U bet they don't.
    Does that really matter? Nope. Not in a free market system. And the EU is supposed to be a freemarkets system right? I you like price controls in competitive industries than great for you. I'll pass.
    And if you think politics doesn't have anything to do with this investigation then you are more naive than you think. Of course the EU investigation is meant to make them look tough against american companies and it plays well to the locals there. You think they don't have politicians in the EU or something? PLEASE. These are the same two trading bodies that was ready to go on a trade war over bananas a few years ago. Give me a break.

  1. dlindsay17

    Joined: Dec 1969

    0

    always costs more

    Dude, Apple's pricing for Europe has always been higher than stateside. Stuff *is* more expensive in europe. The EU is just NOW catching onto this?!

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