European Commission Launches iTunes Price Probe

February 24th, 2005 at 2:00 PM - News by Brad Gibson

The European Commission (EC) has confirmed it is looking into allegations that Appleis iTunes Music Store (iTMS) discriminates against consumers in Great Britain by charging them more to download the same song than it charges other European music buyers.

EC spokesman Jonathan Todd said the investigation is in "the early stages" and would not give a time frame for when a decision would be handed down.

Appleis pricing policy was brought to the ECis attention in December 2004 by the British Office of Fair Trading, which was itself made aware of the situation by the British Consumer Association, now known as Which?.

In the UK, the iTunes Music Store charges customers 79 pence (euro€1.14/US$1.50) to download a single track. The same song costs €0.99 (68 pence/US$1.30) when itis downloaded from Appleis other European music Web sites.

Apple defends its pricing structure saying it is based on market influence and the price it pays for each song in each country.

"The underlying economic model in each country has an impact on how we price our track downloads," Apple said in a statement. "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."

Which? and the British Office of Fair Trading contend Appleis refusal to allow cross-border shopping is in contravention of European Union laws that stipulate 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.