01/09/2008, 2:40pm, EST
Wednesday, January 9th
EC lauds Apple's iTunes price decision
Following Apple's announcement that within the next six months, music prices on the UK iTunes Store will drop to fall in line with other European countries, the European Commission has publicly lauded the decision equalize prices. Officials from the commission said "This puts an end to the different treatment of UK consumers who currently have to pay higher prices for downloads." Prices for iTunes downloads in the UK are currently nearly 10% more expensive than downloads in the euro-zone. Pricing is already standardized between countries such as Germany, Ireland, Spain and Sweden. Based on current European iTunes prices, tracks on the UK iTunes Store should be cut from 79p to 66p, or $1.30 US.
The different treatment to UK consumers was a major concern for Which?, a UK consumer association, who filed a formal complaint with the Commission. The Commission later determined that agreements between Apple and the major record companies are not what determine how the iTunes store is organized in Europe. Consequently, the Commission does not intend to take further action in this case.
"The Commission is very much in favor of solutions which allow consumers to benefit from a truly Single Market for music downloads," commented Competition Commissioner Neelie Kroes the outcome.
Currently, iTunes checks European consumers' residence through their credit card details. For example, in order to buy a music download from the UK view a consumer must use a credit card issued by a bank with an address in the UK.
In closing, officials said "The Commission is aware that some record companies, publishers and collecting societies still apply licensing practices which can make it difficult for iTunes to operate stores accessible for a European consumer anywhere in the EU."
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As far as commodoties not being equally available in the entire EU... a grocer in London should not be able to sell bangers and mash if i cannot also buy it in Warsaw.....?
Get a life... I am in the United States and connot readily buy Grits in the North but can get them at McDonald's in Louisianna... doesn't mean McDonald's has to offer them at some stores and not others.
How would you ever "test" market products? No wonder the UK is only one small island now compared to what used to be the British Empire.
Geez.
Feathers is right. The real issue here is not pricing, but access to the goods/services in another country. That doesn't make it illegal to sell bangers and mash in London and not Paris, but it does make it problematic to not send those same bangers to Paris through the post (you can think of good reasons not to, but that's a different issue).
Apple is breaking EU regulations because it won't allow "Brits" to buy from the German iTunes store, and vice versa. Thus it is preventing the free movement of goods and services - and there doesn't appear to be a good reason for that (ie the goods are just as easily delivered to the UK as Germany).
As to VAT harmonisation and the euro. There's no VAT harmonisation anywhere in Europe, even in the eurozone. Luxembourg's VAT rate is 15%, Germany's is 16%, Denmark is 25%, UK is 17.5%, Republic of Ireland is 25%... and you can also bet that they cover different things: in the UK books and magazines are exempt from VAT, most other places it is charged.