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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.
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?
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.
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 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.)