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iTunes(UK) Targeted By The Office of Fair Trading
dreadz1 writes "It seems that Apple is under fire for overpricing it's iTunes music for UK customers. This story from the BBC says that here in the UK we are charged 20% more for music on iTunes than the French and the Germans. Should Apple lower its initial price so that the cost+VAT is equivalent to prices in the EuroZone or should we grow up and get used to the fact that things are priced differently in different places?"
If the music companies in the UK charge more, then Apple will charge more.
Simple economics.
After all, we have the best music, why should we pay more for all this foreign rubbish? :-)
The internet is a difficult place for pricing, I cannot see any justification for this price increase, so it should go. If however thier costs were equally higher for serving to the britpub.crowd then I would say leave it.
Seems to me they just scale thier price to economies.
Rotten blighters. What-ho-chaps.
#hostfile 0.0.0.0 primidi.com 0.0.0.0 www.primidi.com 0.0.0.0 radio.weblogs.com
The prices should be same or pretty clsoe throughtout Europe because of the common market. It makes sense that they should be pretty even. You have to wonder, if the UK had the Euro, would they charge only 0.99 or would they have upped it to 1.29 ?
for not replacing the pound by the Euro.
I assume that the prices in Germany and France are the same, because they have the same currency.
btw Apple hardware is much cheaper in the US than in Europe - how about complaining on this?
At some point, industries are just going to have to get used to the fact that people want to buy from *everywhere*, not just the store in their own town/state/country. If someone in the UK wants to buy from the US store, they should be allowed to, at the US prices. Just like anyone in the US who wants to buy from Amazon-UK can. The downside is you only get whatever international support, if any, the distant store feels like offering.
Of course, content-owners don't like this, 'cause they like having their own little state-sanctioned monopoly on their own content and for some reason can't stomach the fact that someone in another country might want to sell the same stuff.
The way I figure it, if the original rights holders have been compensated, then any and all cross-border traffic in IP goods should be permitted. Why should I care if $$ go to Warner Brothers in the UK or in the US, as long as it goes to WB?
Solve that problem, and pricing disparities between different countries' stores will eventually disappear (or the stores will, 'cause they're not being competitive).
Yes we are being overcharged, hence why this is being investigated. Moving to the Euro now wouldn't stop this happening.
I assume the 99 cents/pence thing is probably marketing led, i.e. what they can get away without going over to a gnarly looking 3 digit number. If they can't justify the difference between us and the rest of Europe then they deserve to be penalised. I thought they weren't allowed to restrict trade within Europe due to EU law, hence why can't I buy from the German site?
Ignoring your inane suggestion for a second I don't see anything wrong with Apple's behaviour. They're not a monopoly and they can charge as much as they like for their product. If people find it too expensive they shouldn't buy it. If sales stayed low Apple would soon cut their prices.
Why is iTMS being singled out? The whole thing reeks badly. Conspiracy theorist in me thinks that there are companies behind this call for probe.
Consider these 3 paragraphs from a Reuter article
- Targeting iTunes is an odd choice. In Britain, Apple's music service is cheaper -- in some cases more than 20 percent cheaper -- than rivals Napster and most of the online retailers that resell the catalog of music download firm OD2.
- Graham Vidler, head of policy for the Consumers' Association, said he was not aware of a single complaint from a British consumer about Apple's pricing scheme. "What we are saying is we believe iTunes could be made cheaper," he added.
- The Consumers' Association said it had no plans to investigate the pricier download services.
Basically, they summarized that consumers did not feel ripped off by iTMS and yet TCA called iTMS a rip-off. There are other music services with much pricier songs, but they are not rip-offs; iTMS is. Instead of praising iTMS lower price, they called for a probe with words such as "rip-off" while ignoring the pricier download services.
TCA totally ignores that Apple licensed the songs from the labels which is different from a country to another. Price difference may be the result of the British labels' greed and judging from other services, that is the case. Tell me I am paranoid, but I bet if you look carefully who's behind the complaint, you'll find Microsoft or Napster or the likes of them.
I'm unhappy when a DVD costs significantly more in the UK than in the USA. It costs very, very little to ship an inert, imperishable, small and light object across the Atlantic.
I'm utterly livid when a music download costs more in the UK than, well, anywhere. It costs nothing to transfer.
Geographical pricing differences on virtual products like these constitute gouging, plain and simple.
Real Daleks don't climb stairs - they level the building.
Bandwith is not the only thing you pay, you know. When you set up a music download store, you license the music from the labels. That is the biggest chunk of money you pay (in the US, it's 65cents a song vs 34cents for other expenses and profit). If the British labels license songs at higher price than the rest of Europe, Apple can hardly be blamed for the price difference. What company thinks it's a good idea selling products at a loss indefinitely? To cover expenses, you have to increase the price.
Blame the complex laws in European recording industries.
As a Brit and thus, out of obligation/duty/whatever and due to inclement weather, a bitter cynic, I can only laugh derisively at this news and observe that this is the way it always was, is and forever will be.
:s
Some here have failed to grasp VAT - I can only assume that these people are communists, unfamiliar with taxation systems and the exchange of money for goods. (And, as an aside, should the HUAC get wind of this - you know, harbouring socialists and what have you - CowboyNeal can expect the FBI on his ass. Metaphorically speaking, of course.)
Others note a strong pound juxtaposed against a weak Euro or dollar, placing their faith in the fluctuation of international currency to balance the situation. I await with some glee the comedown of the pound - in the dollar's case, this necessitates a change of president, I believe, and, alas, in the Euro's case, nothing short of a blue moon.
The thing is, the UK is fundamentally different from the rest of Europe, a state of affairs brought about more by geography than anything else (the Japanese are similarly afflicted). It will not change. To cite two factors - VAT is lower than the French rate of 19.5% or the Italian one of 20% (if memory serves - corrections welcome) and employment legislation is more company-friendly (contrast our 48 hour working week with France's 35 and note that the Netherlands' figure is similar) - and yet British prices still manage to consistently exceed their continental equivalents - cars have always been a stellar example.
None of this matters though. Britain is, perhaps by statute, more expensive than pretty much anywhere else - this cynic includes Japan in that sweeping generalisation having had ample opportunity for comparison. In fact, it is surprising that this has got as far as the OFT - normally the Beeb is only able to whet the skeptic's appetite for feeling hard-done-by with stories of complaints by consumers' rights organisations.
Nothing will change.
iqu
(If you like my cynical tone, feel free to read my sometimes-updated blog.)
Actually, there are two very possible reasons why a digital download would cost different amounts to send to Germany or the UK.
First off, any form of taxation on the product could very well be different between the German and UK markets.
Second, distribution rights are frequently not 'universal.' It's normal for the rights to distribute some form of IP to be limited in scope to specific regions. It would at least be theoretically possible for Apple to be charged different amounts for the rights in the UK as opposed to Germany...
That said, the article itself doesn't directly address either of those possibilities, however the general impression the article gives(as well as the phrasing of Apple's reply) implies that it is probably a case of Apple pricing relative to the competition by choice. Still, the main point is the costs of sending a digital download to different countries is not always the same since there are significant factors in the price above and beyond the simple case of 'how much does the server/bandwidth cost.'
I wish we Americans had such a fuel tax.
The number of our international problems that have derived from the fact that we drive SUVs and demand massive amounts of cheap oil is just stupid.
I don't drive an SUV (I drive a sport wagon because I have musical instruments that are large), but I still have to fill my gas tank up about once a week for about $30.
High fuel taxes work great in places like Europe where everything's close to everything else and there's mass transit between just about any two points you would need to visit.
Things are completely different here, however, and attempting to adopt Europe's solution to attack arbitrary American problems is short-sighted idiocy. Higher (3x) fuel taxes will only put an even larger burden on the rural/suburban poor than already exists.
What if a work is public domain in one country but copyrighted in another?
Well, one problem with that is that, intellectually, that doesn't make any sense. A book isn't less of a book in a country where it's still covered by copyright (or where it's in the public domain). It's still the same story, the same idea.
Look at it this way: If you spend two years working in Germany, and buy a bunch of books and CDs, should you be forced to forfeit those when you return home to the US, simply because the copyright is owned by someone else? You've purchased them legally, according to the laws of where you were, and you should be able to take them wherever you like.
Now change the two years to a two week vacation. Why should that be any different? Or a two-day business trip? Or a two-minute virtual visit through a web browser? Where do you draw the line? Why do you even need a line?
Ultimately, in a global economy, the concept of copyrights being different in each country is just ludicrous. This is part of what DMCA was supposed to do -- bring our laws in line with a World Intellictual Property Organization treaty. So now we've got WIPO and DMCA (and associated anti-consumer isues), but we're still bound by 18th century notions of nationally-defined copyright controls? How crazy is that?
I can't believe what I'm reading here. Some important facts haven't come up in the discussion thus far:
To sell things in the E.U. there are certain rules you have to obey. As it stands, Apple are clearly not obeying those rules, and so they will lose any legal action which arises. The problem is not that the tracks in the U.K. store are too expensive, but that Apple are actively preventing U.K. consumers from buying tracks from the French store or the German store.
A company providing goods or services in one E.U. country is not allowed to prevent purchases from people in another E.U. country. This principle of the Common Market exists in E.U. law, and this applies to all those countries which are members of the EU including those which, like the U.K., have not adopted the Euro currency.
To obey the law, Apple must allow people in the U.K. with a U.K. credit card to purchase songs from the French or German stores (or people in France, should they wish to, to buy from the U.K. store, for example).
They do not need to allow anyone in the E.U. to buy from the U.S.A. store. Any price comparison between Europe and the U.S.A. is bogus as far as this discussion is concerned. It is not at issue here because the E.U. rules do not apply to the U.S.A. sales operation.
Apple are being targeted because they have stores selling to the U.K., France and Germany, where the E.U. internal free trade rules apply.
(My guess is that the record companies are charging more for the rights to distribute the music in the U.K. than elsewhere. This may also be illegal under the same rules. However, I don't suppose Apple want to take the music companies to court, lest they in turn revoke Apple's right to distribute anything... 'tis a sticky situation, and no mistake.)
should we grow up and get used to the fact that things are priced differently in different places?
I can walk into a store here in Canada and get Simpsons Season 4 for $45 CAD. Or I can take a day trip down to Seattle, and find Simpsons Season 4 for $45 USD. I noticed the same pattern with pretty much all other CDs and DVDs I saw in the US store. The numbers on the price tag in the US are about the same as they'd be back up in Canada - except with the differing dollars, that makes it considerably cheaper in Canada!
So if Apple's in trouble for selling iTMS songs for 20% more in the UK, should American CD and DVD retailers get in trouble for selling their products for 20-30% more than they're sold for in Canada?
Duct tape is like the Force. It has a light side, a dark side, and it holds the universe together.
even assuming the validity of your "long-term" endpoint (it's a reasonable theory, but we won't really know until (if?) we get there), the transitional time is a huge problem. corporations aren't resisting the move just because they don't like the endpoint, they're resisting because whoever starts moving in that direction first - that is, whoever has to start competing on price globally first - looses: their revenue will go down substantially. it's the same reason individuals resist globalization of jobs: it's not that they don't like the endpoint (lower on-paper pay but higher buying power and real income), it's the fact that whoever starts in (gets pushed in) that direction first looses: they get laid off because the guy in india or scotland is cheaper.
and someday someone needs to explain to me where all these new jobs come from in the long-term, but that's a different conversation.
i speak for myself and those who like what i say.