EU begins iTunes pricing probe

Posted on 25 Feb 2005 at 09:00

The European Commission has begun its enquiry into Apple's iTunes Music Store pricing in the UK.

The question of whether UK customers are being overcharged was referred to the Commission by the Office of Fair Trading, responding to a complaint by the Consumers' Association, publishers of Which?.

Apple charges ?.99 per song in its European stores and 79p - about ?.14 - in the UK. At the time of the original complaint by the CA, Apple said, 'The underlying economic model in each country has an impact on how we price our track downloads. That's not unusual, look at the price of CDs in the US versus the UK. We believe the real comparison to be made is with the price of other track downloads in the UK.'

It has declined to comment further.

The CA claimed that iTunes infringes the rules of the European single market.

'The iTunes service is set up in a way that prevents UK consumers from taking advantage of the cheaper download service offered to the French and Germans - UK consumers need to have a registered address and payment mechanisms in France or Germany to access the service or pay the higher price charged in the UK,' it said.

'Consumers' Association's main areas of concern are that the practice of residency based price discrimination frustrates consumer benefits possible under the single market and that the iTunes system allows market abuse, going against the principles of the single market.'

Ironically the Computing Which? investigation into the plethora of online music stores in the UK singled out iTunes for praise.

'The major stumbling block for many sites is the confusing conditions of use; in some cases the amount charged and the way buyers can use the music differs from track to track, making it necessary to read the terms and conditions for every song purchased. Not exactly something designed to entice downloaders to use legal sites,' Computing Which? said.

'Some legal download sites are getting it (mostly) right. Despite charging more in the UK than in Europe, Apple's iTunes makes it easy to find and buy a wide range of popular songs and, critically, offers an easy to understand pricing policy further simplifying the process.'

Author: Simon Aughton