Sorry to end the
EMI and Apple anti-DRM love-in so quickly but the
EU is back with more complaints about Apple's business model. This time, they've launched an official probe into iTunes pricing across Europe accusing Apple of "restricting choice." Only now, the "Big 4" music majors are also lumped into the European Commission's accusations of anti-competitive practices. The core of the complaint is Apple's nationalized approach to their iTunes store. On-line shoppers can only purchase content from the store in their home country with British shoppers suffering the highest per song fees at 79p or $1.56 at current exchange rates -- ouch! As they
tend to do, Apple quickly shifted blame to the labels by stating through a spokesman that Apple "wanted to operate a Europe-wide store, but music labels and publishers expressed legal and copyright concerns." Of course, if that strategy doesn't work out for you Atlas, you can always shrug.
Update: The EU Commission is
now saying that Apple's multi-country store approach is indeed being "imposed on Apple by the major record companies." Of course, the majors have come off the ropes swinging by denying any breach of law. Now quick, redirect your ire at the Big 4 per protocol.
Reader Comments (Page 1 of 1)
elan @ Apr 3rd 2007 4:41AM
I bet someone had a lot of fun making that image.
tim @ Apr 3rd 2007 4:44AM
Canada? Part of Europe?
McGinley @ Apr 3rd 2007 5:04AM
Tim, where is the Canadian flag?
An 80gb ipod in Ireland costs 369€, or 493$, compared to 349$ in America.
This is why I dont own an ipod.Apple have always been doing this in Europe.
Dreadnought @ Apr 3rd 2007 5:59AM
...canada has benn correctly removed, but how about switzerland? :D
Van Daniel @ Apr 3rd 2007 4:48AM
Umm, the labels are, in fact, the ones who want separate stores; I don't see how this is a threat to Apple. They still make bank off the euro and the maintenance of one store would have to save them money.
El in AZ @ Apr 3rd 2007 4:50AM
I think what the regulators and lawsuit-happy folks are failing to remember is the simple fact that music tracks are not a life staple. If you don't like the price of songs at one particular store, buy your songs elsewhere. If you don't like the DRM scheme attached to one DMP, buy another.
This seems simple enough to me.
It's not like Apple is holding a gun to anyone's head and ordering them to buy DRM-laden tracks at an inflated price. Music is entertainment... An optional part of life. If Apple is teh suXXor in your country (or in your opinion), vote with your dollar and buy your stuff elsewhere.
Thomas Ricker @ Apr 3rd 2007 4:51AM
TLM, heh. Fixed.
Thomas
Tom @ Apr 3rd 2007 5:12AM
Try again. Switzerland aint part of the EU.
---
Personally I welcome this. It's not about music being a life staple or anything. It's simply about Europeans (incl. those outside the EU) getting ripped off regularly when it comes down to international trade goods. While it is *somewhat* explainable with goods that need shippping across some ocean, it's simply discrimination with such virtual goods as digital data where there is no obvious other reason behind higher prices than the will and the economic power to intentionally exploit a market. Finally it's the duty of the market regulators to intervene where the rules of the free market fail - and while nothing is proven, it stands to reason that Apples quasi-monopoly in this segment lead(s) to just that.
If Apple is honest about how they wanted to do it with 1 shop and 1 price for all, then they should welcome the EU probe. After all it might lead to forcing the record industry to allow Apple to do it as they say they wanted it to be.
Nick @ Apr 3rd 2007 1:09PM
*tim
Nick @ Apr 3rd 2007 4:54AM
We don't even get darned moives or tv show =| Not much I can do with my AppleTV...
gary @ Apr 3rd 2007 5:00AM
It's not the fact that we pay more for songs here than anywhere else in the EU, it's the fact that Apple are breaking our rights as EU citizens with regards to free trade.
I can buy items off Amazon.de with no restrictions, i can buy off Efnac.fr with no restrictions, why can't i buy a song off iTunes France? It's illegal.
tim hardy @ Apr 3rd 2007 5:29AM
McGinley, dem sneaky guys at Engadget have removed their handy work. When this post was fresh they had sneaky canadian flag in there.
Andrej Duchovka @ Apr 3rd 2007 5:05AM
Well, Switzerland is part of Europe, but not part of the EU, so it is not affected by anything the European Commission says or does. Another flag to get rid of above ;-)
@ Van Daniel: I agree, the labels are the ones pushing the national stores, but Apple legals should have told them that this is not the way the EU free market works...
Micha10589 @ Apr 3rd 2007 5:19AM
gary is right: Besides the unfair price increase for the UK, why can't I buy music from the Italian store? It's a free European market - if I want an album from iTunes Italy I should be able to buy it online even if SonyBMG is too lazy or too greedy to licence it to the German store.
I don't know why many Europeans don't appreciate the EU commission - they are the ones that make life better here when the local governments are just too damn stubborn to do their job (see the resistance to protect the majority of Germans from second-hand smoke, I guess we'll have to wait for the EU to sue Germany).
Stefan @ Apr 3rd 2007 5:34AM
Norway is also not part of the EU!
K @ Apr 3rd 2007 5:37AM
Poor UK users, boohoo.
Highest price for Vista, PS3, Itunes...
Why does anyone weep for us? we are happy gullible customers who are delighted to pay a premium cause we're worth it. Hey! we have a queen and we nickname our popstars "Posh" for example, so don't shed tears. Oh and we are not quite in Europe anyway (the Euro what is that?) so don't bother.
Seriously I can't wait to purchase songs from any country (Europe, America, Japan...) and, maybe one day, movies...
Stewart @ Apr 3rd 2007 6:14AM
The Swiss enter into Bi-lateral accords with the EU to normalise their laws with ours so they get the benefit of the free market, under the EU - Switzerland Agreement of 1972
dreadn @ Apr 3rd 2007 6:22AM
yes, but they haven't normalized anything :D
Andreas Bachofen @ Apr 3rd 2007 9:54AM
Ok, to get rid of the confusion with Switzerland & Norway: Both are not members of the EU. But: Norway is a member of the European Economic Area (http://en.wikipedia.org/wiki/European_Economic_Area), Switzerland is not. And all the bi-lateral accords between Switzerland and the EU (http://www.europa.admin.ch/themen/00500/index.html?lang=en) do NOT include being part of the EEA. It is specificly the different stores in the EEA that are targeted by the European Commission (http://www.europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/126&format=HTML&aged=0&language=EN&guiLanguage=en), because they only have an influence on the EEA, not Switzerland.
To cut a long story short, you can leave the Norwegian flag up, but take the Swiss flag down, as far as my research has concluded :-) Well, and if you find some flags of the other members of the EEA, feel free to add them, too...
Rohit Kapur @ Apr 3rd 2007 6:36AM
Nice Atlas Shrugged reference. It's my favorite book ever.
Hmm, well Apple may or may not be wont to shift the blame on the labels, but we don't really know the truth. The fact is that if the labels really aren't to blame, they wouldn't let Apple point fingers at them this much; or maybe they would, since they're already considered this notorious. Who knows?
That's my point. Who knows?
The bottom line is that the consumer always suffers, so the reasons are inconsequential, really. And in any case, Apple has a right to run their business as they like. If you don't like it, you don't have to shop there.
At least we're seeing some movement towards removing DRM...
Tim @ Apr 3rd 2007 6:37AM
in the EU, it is not illegal for Apple or the labels to charge different prices in different countries. It is however illegal for them to prevent you from buying at local prices.
i.e: if I am from England, I must be allowed to buy in France at French prices.
Apple and the labels are very obviously fixing prices.
Under EU rules, they should allow me to shop at the French store at French prices, which they are not.
Of course this is to do with the labels, Apple could not care less who they sell to.
Same as with price differences between EU and US or Asia, it's the labels 'protecting' their market (from what?).
There used to be the same problem in the Car industry in Europe, England being the most expensive (again) by up to 30% (!!!!) more than other EU countries and the manufacturers not allowing for example German Buyers to buy in Italy etc.
VW got fined something like 90m Euros for doing so a couple of years back...
http://news.bbc.co.uk/2/hi/business/3119684.stm
Tomas Kapler @ Apr 3rd 2007 6:42AM
Till EU will have stupid rules (e.g. must have 2+ year warranty) and 20 languages, there will be problem with pricing
P.S.: the flags are gr8, but there are no new countries (czech e.g.).
P.S.: author of this comment is Czech (EU citizen)
simon @ Apr 3rd 2007 6:52AM
Oh boo hoo. Don't buy it if you don't like the price. How goddamn difficult is this to understand????????????? Does Apply owe you cheap music? No. Where do people get this selfish entitlement thing from? They blame it on the "selfish capitalists" but they are the selfish ones themselves. It is exashasberating that these morons still exist on the planet.
McGinley @ Apr 3rd 2007 6:05AM
@simon
Apple doesn't owe us anything.But they shouldn't take advantage of their near monopoly and be allowed to charge 1€ for a song that retails in the American store for 1$.Even though I suppose if it was the labels fault then Apple had nothing to do with it.
How would YOU feel if you were getting ripped off like that?
OwningXylophone @ Apr 3rd 2007 7:11AM
"Does Apply owe you cheap music? No" Your right, they don't, but they can at least charge the same as everywhere else... Plus, EU laws state that we, as EU citizens, live in a free trade state, if I want to order something from France, Germany, Holland, etc. then by law I can without any issues... I hope that Apple & Friends get hit with a €5,000,000 per day fine until they fix it.
I'd love to hear what all the whiney yanks would say if the boot was on the other foot, and Apple decided to charge $2 per song in the states... You wouldn't get any of this 'don't like it, don't buy it' crap, just millions of people whining about how shitty DRM locked music is costing them more than the rest of the world...
simon @ Apr 3rd 2007 7:12AM
Sorry for my outburst.
I certainly wouldn't consider using force to make them behave how I wanted them to. I just choose not to buy from them :) Hell, by downloading it instead they might get more of the message that their prices are crap! I would have to aggree with you that it is most likely the record labels that contribute to the price and the file quality, they are a bit (very) slow but eventually they will get the message. I guess they have to learn not to rely on an aging business model centered around copyright.
And here in the UK the price is more I believe at £0.79 :)
UK£ 0.79 = 1.16253863 €
MacroEQ @ Apr 3rd 2007 7:03AM
Engadget would not be Engadget without making mistakes when it comes to Europe, the EU, the UK and England *laughs*
Switzerland and Norway are NOT in the EU but are part of Europe.
http://www.europa.eu/abc/european_countries/others/index_en.htm
Tech^Cellfish @ Apr 3rd 2007 7:09AM
Seems a lot of people think European Union is the same as Europe, which it is not
stevieb @ Apr 3rd 2007 7:22AM
Why not charge us in the UK a fee based on that days exchange rate to the dollar? Granted the price would change daily but it would be a farer system than the current one which locks us out of purchasing tracks from the US store.
excessmind @ Apr 3rd 2007 7:22AM
What about the countries in EU which doesn't even have access to iTunes store?
E71 @ Apr 3rd 2007 7:33AM
The EU are a whiney bunch aren't they?
Cea @ Apr 3rd 2007 8:09AM
The EU are 27 countries. So add some flags.
WanBam @ Apr 3rd 2007 8:28AM
I don't see what's so hard about this, unless you're some ignorant ass American who has never left the country before. One of the benefits of the EU is being able to buy things freely within the EU nations. Sure, they can be different prices in different locations, but you can't restrict people from purchasing them and moving them freely around the EU.
I suspect that EMI and Apple announced their DRM free deal as a way to get some positive spin out there before this announcement today.
gary @ Apr 3rd 2007 9:06AM
I don't care about the pricing, i pay a premium for the convenience, it's not just Apple who price things disproportionately to the US pricing, but then again the markets are different.
I don't see where attacking people in the US or EU gets anyone, Apple look after their home market (the US) but if they are selling in the EU they should respect our laws and rights, just as the US Federal Government would expect from a EU company.
Also the fact that the store isn't available in some EU states is totally wrong it's your right as a EU citizen to buy a product anywhere in the EU!
the other steve jobs @ Apr 3rd 2007 9:22AM
why don't the music companies simply allow Apple to set up a single online store and allow the copyrights to cross the entirey of the EU? Apple isn't doing it because the contracts they signed said that they couldn't.
You fucking euros are weird... YOUR companies are causing the problem (Apple stated that they WANTED a single store for all of the EU, but the European companies wouldn't allow it) and you're pissed at apple? WTF? Why doesn't apple just refuse to give the music companies their money then too, i mean, while Apple is breaking the contract with the owners of the muic.
I swear - the discussions on this whole subject make my head hurt - its like listening to a bunch of mullahs saying why its okay to beat your wife "because she's not doing what i told her". Its the same reason you're beating on Apple.
John @ Apr 3rd 2007 9:14AM
if you guys ever make another atlas shrugged "joke", i'm not reading anymore. i'm serial.
xman @ Apr 3rd 2007 9:39AM
The EU is one BIG JOKE!!!
Anti-competitive??? HOW SO?? People can buy music from any store they'e like (if you don't want AAC then don't buy and IPOD, plenty of alternative players on the market) or buy CD's and convert the audio to whatever format they would like. Apple doesn't own the music and even if they did? NO one has to buy the music from them. I have an old motorola mp3 player (m500). I don't buy from APPLE. They are not the only game in town. Besides, doesn't it make sense to shop around for music like in the past when people bought CD's more frequently?? The EU seems to always find a way to flex its power. There is no real reason for its existence. What a joke the EU has become??
Josh @ Apr 3rd 2007 10:04AM
Imagine Apple establishing a separate store for each U.S. state, and prohibiting people in Virginia from purchasing from the online Maryland store. That is similar to the situation in Europe. It would be really silly to do in the U.S.. In each case you have local laws where the consumers reside that are different from the laws where the store resides (whether in the States, or in Europe). But of course, sillyness is no reason to regulate --- Apple is already suffering from the situation due to unoptimized use of the markets.
Note that this has precedent: if you call Apple for tech support, they'll force you to call the tech support in your local country, even if you don't speak the language of the local country. Nice for travelers, heh?
Jeff Lewis @ Apr 3rd 2007 11:18AM
Actually, as a Canadian, I experience something like this all the time. Most American online stores won't sell to someone in Canada and often the American price is substantially cheaper even when converted to Canadian dollars and you add in shipping. When the company has a Canada website and a US one, there's also usually a significantly wider range of products in the US and they'll get build to order while we get a small range of 'stock' models.
Considering that all they have to do is send it by UPS and charge us for shipping and brokerage, there's no logical reason to limit choices or Canadians - and you'd think that their capitalist side would get them to serve this market. But no.
Even when they do - their prices are often out of whack with the current exchange rates, although at the moment, Apple's prices are actually pretty much in line or slightly better than the exchange rates.
And if you go to the US and buy them over the counter - the companies will refuse to honour their warranties.
It's all quite unfair.
nikster @ Apr 3rd 2007 10:05AM
prediction - the labels will get slapped and there will be an EU wide store ('cause in theory they could allow you to buy from another EU countries' store but what would be the point? - ppl would just always surf to the cheapest store).
that consumers can freely buy from other EU countries is one of the basic fundamental free market principles of the trade union so chances that the labels get around this are zilch.
the only thing they could do is withdraw from europe completely and thats unlikely.
James @ Apr 3rd 2007 10:41AM
Josh: yes, it would be *silly* for Apple to establish different pricing in Virginia than in Maryland, but guess what? It wouldn't be *illegal*. Moreover, it would be wrong for the government to stick its nose into the situation, activist judges' crazy interpretation of the "commerce clause" notwithstanding. As so very, very many other commenters have pointed out, it's *music*, not cancer drugs. If Apple wants to charge California 5 bucks a song, let them -- they'll go out of business as people flock to Napster or Amazon or even Wal-Mart (though probably not out on the left coast). If you don't like a set of business practices, VOTE WITH YOUR WALLET to change them. It would be one thing if Apple had started out charging the same (low) price for everyone, then upped the price in specific markets only after they had sold a lot of iPods, and if the iPods couldn't play music from other stores. But they haven't done that, and AFAIK your average iPod can play any MP3 you feed it, so it's not an issue.
Chasqui @ Apr 3rd 2007 11:29AM
Unfortunately, we will only see more of this sort of nonsense. Different markets around the world support different income and spending levels. With physical stores/goods and services differential prices are easy to maintain. Travel from one country to another to obtain a different price makes no economic sense. With digital goods, which have virtually no transport cost, maintaining a price differentiated market becomes less practical - it will rely on regulation rather than the practical issue of travel. There are a lot of red herrings and smoke screens on this one (monopoly? ha!), but it will come down to how people feel on the justness of differential pricing. Should companies be allowed to price to a local market? Personally, I think so. It is wrongheaded to think that someone in a first world economy has a "right" to buy the right to listen to a music file / read a book at the same price a someone in the 3rd world does. Will it mean a grey market will exist? Yep - and this already exists for physical goods. Does it mean that some people will pay more than others? Yep - suck it up. Or, just don't buy it! (or buy it 'second hand'?)
Sean S. @ Apr 3rd 2007 1:15PM
I think it is interesting that people feel so trongly that the EU is being unfairly harsh and should just 'suck it up' and 'vote with their wallets' when this is the exact situation that Microsoft pulled in the US a few years ago and many of these same people were cheering for the breakup of M$ and their "anti-consumer practices."
It's easy to say it's whining when it doesn't affect you.
Dave @ Apr 4th 2007 4:20AM
Every wonder why there is no Apple, Microsoft, Intel, AMD in Europe? It's because everyone seems to feel that they are 'entitled' and that it is their government's responsibility to protect their 'entitlements'. Who is going to invest their hard earned money to produce something only to have big brother limit the ways they can get return on their investment.
Additionally you are *not* one country but you want to pick and choose when you wish to be treated like one under this EU crap even though you could never in a thousand years band together under one Federal flag because at the core - you all hate each other.
It's music - not life saving medicine that we are talking about here. Your government has no legitimate interest in the price of music nor how it is distributed. Exercising such interest amounts to restriction of free trade.
At some point either you are going to have to get off your collective asses and start investing and producing your own stuff in the alternative or face a backlash in the US on your exports here if you continue to interfere with free trade of our exports there - regardless of whatever idiotic theory-of-entitlement-de-jour your government officials latch on to.
vdv @ Apr 4th 2007 4:40AM
EU as of Apr 3rd 2007:
Belgium, France, Germany, Italy, Luxembourg, Netherlands, Denmark, Ireland, United Kingdom, Greece, Portugal, Spain, Austria, Finland, Sweden, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia, Bulgaria, Romania (TOTAL 27 countries)
NOT EU: Switzerland, Norway
http://en.wikipedia.org/wiki/European_union#Member_states
http://europa.eu/
daltonist_bull @ Apr 4th 2007 5:03AM
Did you make that image? Or found it somewhere? You kinda miss a few flags. Like 10... Also the official flag isn't in anyway related to what you posted here. How would an american feel if you would put the confederate flag instead of the US flag?
Thomas Ricker @ Apr 4th 2007 5:04AM
daltonist_bull,
Those "flags" are Apple's, from their list of iTunes country stores.
Thomas
Jobob @ Apr 8th 2007 1:42AM
What really has come out of America that has been worth paying any money for in the last 10 years anyway?
Phil @ Nov 30th 2008 1:35AM
Oh good, it's turned to cross-Atlantic bashing.
In any case, I see where both sides are coming from. The EU does seem to be well within its rights, and if you're supposed to be able to purchase goods from any other EU nation's store, then it does seem Apple is doing something illegal.
On the other hand, as a non-European, the EU does seem to do some pretty silly stuff to foreign companies. I'm a Linux user, but I thought the making Microsoft not include Internet Explorer was pretty silly. Anti-competitive? Seems to me these commissions are asking companies not to try to make money,...