Apple and EU set to resolve anti-competitive iTunes pricing scuffle?

Those "people familiar with the situation" are saying that Apple is set to resolve EU concerns with Apple's claimed anti-competitive practice of country by country pricing. Apple, you'll recall, claims that it "wanted to operate a Europe-wide store, but music labels and publishers expressed legal and copyright concerns." The announcement, expected later today or on Thursday, is supposed to bring an end to the EU's long running case against Apple following the first complaints riled back in 2005. Will this mean reduced €0.67 / £0.50 tracks to match the US $0.99 price? Hell no son, but we can always hope.

[Flashpoint @ Jan 8th 2008 12:15PM]

how long till the Riaa sues someone for purchasing music on Itunes?

[ssuk @ Jan 8th 2008 2:41PM]

I'm pretty sure they make enough money off people through the iTunes already.

[Mark Dean @ Jan 8th 2008 12:18PM]

All though I'm alll for this, Apple and other companys do this for a reason. It's because the UK makes a lot more money per person on average than the USA, so its consumers can afford to pay more.

What if this was reversed onto America, and all your tracks were $2???

I'm no apple freak, but I know bussiness, and that's what Apple is, it's there to make money, not form the religion and listen to consumer desires.

[Pheeel @ Jan 8th 2008 12:41PM]

Are you kidding me? People in the UK don't make more money on average than in the US. It may appear that way due to the exchange rate but it's just not the case. Most products in the UK (apart from groceries for some reason) are more expensive in the UK

I'm originally from the UK and live in the US. I used to pay 40% tax in the UK and I play around 25% in the US.

[SuperPrime @ Jan 8th 2008 12:44PM]

UK is not part of the Euro zone.

Also Europe!=UK

[Andrew @ Jan 8th 2008 1:11PM]

@Pheel
Actually the average UK income is now above the average US income. To quote the BBC: "The average UK person will this year have a greater income than their US counterpart for the first time since the 19th Century, figures suggest."
http://news.bbc.co.uk/2/hi/uk_news/7174996.stm

[Alan Partridge @ Jan 8th 2008 2:08PM]

Whether or not the average Briton earns more than their European/American counterparts (they do), the UK is part of the EU and there are Free Trade Laws across EU countries. Apple are allowed to charge whatever they want, their just not allowed to illegally block a UK iTunes user from purchasing songs cheaper from the French iTunes store etc.

[Mark Dean @ Jan 8th 2008 12:49PM]

@ SuperPrime

The UK is is the EU, it just decided not to use the corrupt euro.

[SuperPrime @ Jan 8th 2008 1:02PM]

Not using the Euro=not in the Euro zone

also
"it just decided not to use the corrupt euro."
Stop talking. Your brain isn't working.

[Andrew @ Jan 8th 2008 1:07PM]

The "corrupt" Euro? What makes you say that? Because it's so highly valued and beats the Dollar? I really don't get what you have against a *currency*!?

Sure, go ahead, attack the EU for it's lack of democratic power because the member nations don't want to fork it over to the European Parliament. But badmouthing a currency? It doesn't make any sense. And I'm a non-EU European.

[Gwydion @ Jan 8th 2008 1:30PM]

Corrupt Euro?
What does it mean?

[ClaMs @ Jan 8th 2008 1:23PM]

100% agree with SuperPrime.
Your brain ain't working.

[lmsam @ Jan 8th 2008 1:16PM]

im tired of getting ripped off as a UK customer. 9 times out of 10 we have to pay more, and even if we earn more [which we don't, its just been shifted that way due to recent weakness in USD/ strength of GBP] why should we put up with it.
these EU bodies are set up to protect consumers from getting ripped off.

[snitch @ Jan 8th 2008 1:05PM]

this is goin to be a real big year for itunes, specially now that apple just elected Andrea Jung CEO of AVON to their board. the biggest downside for itunes in 2007 was the NBC Universal Problem, this is where Andrea Jung is goin to play a important part because she also seats on GE board of directors which Owns NBC. if you look at apple board of directors its really compose by Elites. so apple really made a good choice, why talk to NBC when you could now talk directly to GE who owns them,lol, NBC CEO might be needing a pamper right now

[Reid Conti @ Jan 8th 2008 1:05PM]

UK has 3/4 of the USA's GDP per capita. Probably a better measure than income, since, as noted, prices vary.

http://www.indexmundi.com/g/r.aspx?c=xx&v=67

The only way on earth that people in the UK could be considered to make more than people in the US would be to have them convert their salary to dollars, and spend all of their money/live in the US rather than the UK.

[Andrew @ Jan 8th 2008 1:17PM]

To quote the BBC: Professor Broadberry says: "Overall, the US economy is still 25-30% bigger than Britain's."

http://news.bbc.co.uk/2/hi/uk_news/7174996.stm

[Mark Dean @ Jan 8th 2008 4:00PM]

Andrew?

Have you ever realised that Americas git a bigger ppulation with a lot more resources, so I'm not surprised about the ecomony. But if you read that article, it says the UK have a higher GDP! Which is what this is about, not how much oil america is stealing!

[Jakob @ Jan 8th 2008 1:12PM]

Don't grizzle, a new inquiry announced today that Denmark is much more expensive than any other EU-country. Actually 42% higher than the average, with Germany and Sweden to follow with 16% and 9%,

I don't know if the Euro will change that, I don't think.

Doesn't Apple have to pay VAT and taxes of online music?

[Andrew @ Jan 8th 2008 2:15PM]

Correct me if I'm wrong but if Denmark adopted the Euro wouldn't it make it much easier for cross border shopping in Germany/Poland? And it would lead to greater transparency. Danish consumers would see clearly what their neighbors are paying.That ought to have it's impact on prices in Denmark! :)

[Jakob @ Jan 8th 2008 1:19PM]

Agree, it's just a currency. And for rich countries like Sweden, UK, Denmark and Norway (know you're not a member of EU) the Euro will get minimal impact.

Men hej med dig normand ;)

[Andrew @ Jan 8th 2008 1:58PM]

I was going to point that out ;) And we do pay a lot more in general than you Danes and Swedes :( And it's not the enormous oil income, because we invest that abroad, but our politics, strong currency and tax levels.

Our iTunes rate is 9 NOK per song ≈ 1.14 Euro.

[Jakob @ Jan 8th 2008 2:37PM]

Our iTunes rate is 8DKK=€1,05.
Actually Copenhagen and Oslo are some of the most expensive cities in the world (and some Africans, too)

But adopting the Euro wouldn't change the cross border shopping in Germany/Sweden, nearly all accept kroners :D

[Jeff Lewis @ Jan 8th 2008 1:24PM]

Actually, my understanding of the situation isn't that they charge different prices in different countries. That's allowed under the EU rules.

What Apple did that IS illegal is that they tried to prohibit access to iTunes on a country by country basis. For example, someone in Germany isn't permitted to purchase a song from iTunes France. That violates the 'all citizens are treated equally' rule that requires that all markets be equally accessible.

This is a rule I wish NAFTA had in it. We Canadians are regularly restricted from access to US markets because international and American companies establish local branches and then refuse to allow competition with themselves.

This would be ok, except that the Canadian market is 1/10th the size of the US and so maintaining the same range of products isn't justifiable. On the other hand, if more Canadian subsidiaries were smarter, they'd realise they'd make more money if they consolidated manufacture and shipping to the US side and act more as a wholeseller than as an actual manufacturer.

Instead we end up with the US' leftovers, usually at a much higher price, even though our dollar is now at par with (or even slightly higher than) the US dollar. By taking such a narrow approach, it ends up creating what would, if it happened within one country, be considered price fixing.

[Gwydion @ Jan 8th 2008 1:38PM]

But not only iTunes, I'm Spanish, my wife is Italian and we cannot buy any piece of hardware in Italian Apple Store

[ThatGuy @ Jan 8th 2008 2:23PM]

But I'm a little confused - if 'all citizens are treated equally' rule in the EU means that people across borders have to be able to shop across borders, no issues...does that mean that all the taxes are the same for nations in the EU? For example, VAT in Germany will be the same as France? How about employer requirements (such as required healthcare, time off, other benefits)?

Hypothetically, if it costs more to operate iTunes in France than, say, Germany, due to France's laws, should Apple be expected to make less of a profit in France? Or should they just raise the price to give them the profit margin they want in the company that it costs the most to operate, thereby unfairly raising the cost for other countries with more favorable laws towards employers?

(I know little about the way the EU laws are structured for employers...that's why I'm asking). I'm just confused as how a company is expected to juggle all that while still offering the best price to the consumer (and allowing themselves to meet the margins expected by their shareholders). Can anyone shed some light on this for me?

[Jakob @ Jan 8th 2008 2:41PM]

No there is different taxes around all countries in EU. Eg. Germany's VAT is 19%, and Denmark's 25%, but if I buy something on a German store, I'll only have to pay the German VAT.

Otherwise if I purchase something from an American site, I can risk to pay the Danish VAT at 25%.

[Jurisprudence @ Jan 9th 2008 12:19AM]

The EU is a union of separate states, each with their our sovereignty. Some, and only some, of the control of economic, social, human rights laws etc are given over to the institutions of the EU to provide a platform for cohesive cooperation between member states. We started as an economic market place and have buit up from there. Two things regards iTunes and Apple.

1) Selling 'copyrighted' material, and restricting the movement of that material between member states of the EU is not illegal per se. Different copyright laws may exist in each country and in legal terms it is a very good idea to section off that material to make sure Apple are not breaking individual countries copyright laws. However, Apple are now hiding behind this to increase profits and the EU Commission are not pleased.

2) This is the big one. Apple use their system to actively discriminate against Europeans in general (particularly the UK as they use Sterling). The costs regarding the iTunes store do not vary country to country as most of the material is being distributed from a central source to individual countries (better for security and logistics control). Payment of record companies etc is taken care of under contract for a fixed fee virtually worldwide. What Apple is doing is charging Europeans more because they are European, nothing else.

If your an American and you come to Europe, buy some fast food, what would you say if someone said "oh sorry, your American, thats twice the price for you". Thats what its like being from the EU dealing with American record companies and Apple.

The offshoot is that they are stealing from Europeans and helping the spread of piracy as people dont buy from companies who actively discriminate against them. Ask any European copyright lawyer or ISP. The EU bodies are not the kinda people you want to piss off on these matters. They dont care if your Apple or Microsoft, look what happened to them.

[Christopher Phin @ Jan 9th 2008 8:14AM]

We've had a press release to this effect from Apple itself; see the story at www.macformat.co.uk – permalink at http://www.macformat.co.uk/page/macformat?entry=apple_lowers_prices_of_uk