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Tuesday, April 03, 2007

EU price probe into Apple iTunes

Just an article I found I thought would be of interest to the musicians who read:

iTunes screen
iTunes is the market leader in downloaded music
The EU has launched an inquiry into what Apple's online music store iTunes charges users across Europe, accusing it of restricting customer choice.

Brussels believes agreements between Apple and record companies violate EU laws by preventing users in one country buying music from a site elsewhere.

The move follows a complaint by UK body Which? that British users have to pay more to download songs than others.

Apple said it wanted to offer a single European service but faced obstacles.

Different pricing

The Commission's move is unrelated to an agreement, announced on Monday, between iTunes and EMI to make the latter's music available online without piracy protection.

Brussels has written to Apple and a number of unnamed record companies to notify them of their objections to the way music is sold, the first step in formal proceedings.

We were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us -Apple

Media reports speculated that it had contacted each of the "big four" record companies - EMI, Sony BMG, Warner Music and Universal Music.

The Commission said Apple established customers' country of residence through their credit card details and only allowed people to buy tracks from the website for that country.

"Consumers can only buy music from the iTunes online stores in their country of residence and are therefore restricted in their choice of where to buy music," said EU competition spokesman Jonathan Todd.

UK: 79p
Denmark: 72p
Germany: 66p
France: 66p
Belgium: 66p

Research by Which? in 2005 found that UK users paid 79p (1.16 euros) to download a song, compared with 66p (99 euro cents) in France and Germany.

Apple said it had always wanted to offer a fully pan-European service, but was restricted by the demands of its music partners.

"We were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us," it said in a statement.

'Restricting competition'

The companies targeted by Brussels have two months in which to respond to the charges.

Which? welcomed the investigation, saying the benefits of the European single market should be available to music lovers in all member states.

"This investigation proves that iTunes is overcharging its UK customers, who are paying substantially more for their music," said Alena Kozakova, its principal economist.

"The announcement means that companies can no longer hide behind intellectual property rights to restrict competition for consumers."

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