British Consumer Group: iTunes Pricing Unfair; Apple Defends Policy

September 14th, 2004 at 3:00 PM - Reports by Brad Gibson

Britianis Consumersi Association (CA) has accused Apple Computer of overcharging its UK customers to download music from its iTunes Music Store and has filed a complaint with the governmental Office of Fair Trading (OFT) requesting an investigation.

In a prepared statement, the consumer watchdog group contended Apple is charging its British customers the equivelant of 120 euro cents while asking only 99 euro cents to iTunes Music Store customers in France and Germany.

"Under European law UK consumers are supposed to enjoy the same benefits of the single market as other citizens of member states. However, 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," the group said.

CAis main concerns 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.

The group is asking the OFT to investigate what might be anti-competitive and discriminatory behavior by Apple against UK consumers.

"There appears to be considerable evidence that the iTunes set up is prejudiced against the UK public and distorts the very basis of the single market," said CA president Phil Evans. "If the OFT agrees it will be another example of the rip-off culture that the British public are often victims of."

Apple responded to CAis charge by saying its price structure was based on market influence. "The underlying economic model in each country has an impact on how we price our track downloads," Apple said in a statement provided to the CA. "Thatis 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."

Some legal experts believe the CA might have a case against Appleis pricing policy, saying European Union law stipulates British shoppers should be able to enjoy the same advantages as their European counterparts. But because Apple does not allow those with a UK-based address or credit card to use the French or Germany iTMS sites, those in the UK canit enjoy equal pricing.