Slashdot Mirror
ITunes Overcharging in the UK
KennyMillar writes "The BBC is reporting that the OFT (Office of Fair Trading) has ruled that Apple is overcharging for iTunes downloads in the UK. They have referred the case to the European Commission for a ruling. One important note is that UK iTunes customers cannot buy from the French or German iTunes Stores, and this goes against European Freedom of Trade rules. A spokesman from OD2 agreed that people in the UK should not be charged more than customers in the Eurozone. I've emailed Apple asking for 20% refund on all my downloads, but I won't hold my breath!"
This is a case of the other side of the coin of globalism. Big companies like to be able to move their operations around wherever they want to minimize expenses, but consumers also want to be able to shop wherever they want to minimize prices. The infrastructure that supports one also supports the other. We need to keep vigilant to make sure the laws equally support both.
Of course, in this case, Apple is probably just passing on the policies set by the recording companies in their contracts. If my guess is right, then hopefully they can use this ruling to get more equitable terms in their contracts.
Wouldn't the same principles forbid use of CSS to charge different prices for DVDs in different regions? Is this why DVD vendors in the UK are free to sell "region free" DVD players without any hassle?
after dealing with labels, and coming out with a pricing scheme that matches as closely to the 99 cent across the board pricing as they're able to negotiate, they're investigated for price fixing. I notice after seeing this picked up in other places, that nobody has mentioned a word of the record labels forcing pricing schemes on Apple. Apple makes just shy of squat on the tracks, and having a universal price marketing ploy makes more sense than picking up a couple extra pennies a track in the UK. Methinks this stinks of someone looking in the wrong place for an answer.
Seriously, if the European Union would get off it's butt and actually make the various European versions of the RIAA offer the same licensing across all of Europe, like they have already ordered them too, then this would not be an issue. Apple charges different prices because they are charged different prices. Now the UK has ruled that Apple is violating a EU law, but obeying it would break the law in any given member of the European Union. This is largely a matter of considering intellectual property to be a good or service, when sold by Apple, but not otherwise considered a good or service across the EU as a whole.
Mostly this is just the UK pissing and moaning because they are getting ripped off more by their RIAA clone than other countries are and they want Apple to do something about it. Apple doesn't really care how much the songs cost, they just want them as cheap as possible. They don't even make any money on the issue, it is just a way to get people to buy computers and mp3 players.
I'm sure this will result in the EU ordering each country to license IP across the EU under the same terms as locally, and in another 10 years most of the countries will actually get around to doing so. In the mean time, Apple will fight things out in the courts, stop selling in the UK, raise prices across all of the EU, or take a loss selling into the UK for the sake of good will. None of which seems like a good deal for anyone involved.
at this moment, the easiest thing to do is to lower the british price to 0.69 pounds, which is consistent with the exchange rate. it may fluctuate - how much of a fluctuation is considered ok? or should apple open up iTMS for the entire european continent and accept credit cards from everywhere? how often will they have to change the prices with the exchange rate? will apple keep 0.99 euros and change the british price or keep 0.69 pounds and change the euro price?
You realize they have different music in each store, right? That they don't all see the American one?
"But I'm still right here, giving blood and keeping faith. And I'm still right here."
When I was in England in the late 90's there was debate about whether or not the UK should use the Euro. They (the english decided against it.)
The Euro has increased a lot in value relative to other currencies this year so it would make sense that it seems like overcharging. Much like the dollar vs. the canadian dollar. There is no equity in currency values.
The Ecomists big mac index shows that big macs cost different ammounts in different places, even adjusted for currency differences. Why wouldn't music?
Is apple expected to change the cost of songs every couple months due to currency valuations?
This is the same kind of market gouging the MPAA is getting away with, thanks to those DVD region-encoding schemes.
It's not the fact that the prices differ, it the fact that a customer with a credit card in one EU country can't buy songs from the itunes store of a diffirent country. EU law says that EU citizens are free to buy goods or services from anywhere in the EU without any any rescrictions. To be fair it's not apples fault it the record companies who won't allow the tracks to be distributed under the same liecence through out the EU. Cases like this will push through laws requiring the harmonising of EU IP laws.
Now certainly you have a right to complain and say it's unfair that they charge difference prices in different countries. But I certainly don't think there's a valid argument for getting a even a partial refund.
The problem still remains that apple are breaking the law, all of their problems could be more easily solved by having one music store for the whole of europe, offering all prices in euros, and letting the credit card companies deal with currency conversion, and then they just take whichever deal from IP providers, and host the service in that country. If the IP providers object, they can be easily taken to court, everybody's happy.
> Apple doesn't really care how much the songs cost, they just want them as cheap as possible.
An Apple zealot troll modded up to +5! Good job moderators! How do you know Apple doesn't really care? Do you have any inside information to back you up that you'd like to share with us? Or are you just acting for the crowd like the troll you are?
How else do you explain that prices in the UK are almost twice steeper than those in the US? How do you explain the psychological prices they have? What's the difference between $0.99 and $1? What's the difference between 0.99 and 1? What's the difference between £0.99 and £1? I dare you! Prove that Apple doesn't care!
If the IP providers object, they can be easily taken to court, everybody's happy.
If only it were that easy. There is no actual law that says IP providers have to offer the same price as IP providers in other EU countries. (There is an EU directive for each country to pass laws to that effect.) And a license to music is contingent upon your location under laws in most EU member states (Thanks to pressure from the U.S.). The problem is that the UK council is not seeing is that according to EU law, Apple is offering different services in each country, even though the end result for the user, is the same song. This is further complicated by the fact that although their end user license says you can only buy from the country in which you reside, their only control is through the address listed for the credit card, so the UK authorities are seeing it as credit card based.
Of course the UK could stop being obstinate and adopt the Euro like (most of) the rest of Europe...
How else do you explain that prices in the UK are almost twice steeper than those in the US?
The prices are higher, probably because they are being charged a different price by the UK version of the RIAA. Obviously I don't know that for certain, since the agreement is a trade secret, but I do know that Apple has publicly stated that the iTunes Music Store is a break even proposition for them, and they have told their shareholders that they are operating it to promote ipods. You can find both of those as facts on the record. As to the pricing trying to meet a 99 cent price point, or something equivalent, Apple is just trying to make it an attractive, round number, just like every thing you buy these days. nobody wants to buy something for 1.136 dollars, 1.15 is easier to remember and easier to add.
Basically, I imagine the prices are set mostly to cover whatever cost they have, and be not to strange of a value. Do you really think Apple plans to make it's money by having higher prices in the UK, and thus fleece them for all that extra money? That is pretty unlikely. I'm sure they would be quite happy if the EU would allow licensing across the entire Union for one fee. I'm sure they have already spent more money in legal fees trying to negotiate with every nation's RIAA, and more in technical fees setting up different stores with different music than they will will make for years selling music there.
P.S. as for being an Apple zealot, I don't buy music from the iTunes music store (except for one hard-to-find album).
Apple cares a lot about making money, but they do it by selling iPods, not music. They sell music because it boosts iPod sales.
English is easier said than done.
This has nothing to do with intelectual property. It's like if they had a shop in france and charged english people who came into it 20% more due to their accent.
The problem is not that Apple charges more in the UK than in the EU - they are absolutely allowed to do that. What they are not allowed to do is ban people in the UK from buying things from the various EU stores (and as a by product, that means that we in the UK may be able to get cheaper songs from the EU store).
Bob
This has nothing to do with intelectual property. It's like if they had a shop in france and charged english people who came into it 20% more due to their accent.
Yup, just like that. Well, except if they had different shops for each country and were selling music online, and charged prices based upon your credit card's billing address.
Do you really think this is a discrimination issue? Against the British?!? They are selling at different prices because they are selling different products. It costs a different price to license music from the RIAA equivalent in Britain than in France. If they charged the same, I bet Apple would too. If you don't like it, why don't you pass laws forcing music industry conglomerates to license at the same price, like the EU already instructed them to.
It costs a different price in the U.S. too, and even less in Canada. Get over it.
I didnt say it was discrimination , i was giving a physical example. Why cant i buy from the french shop where apple pay the RIAA? I can buy french cds in france. Who are apple to come along and say whats what in the EU?
Who are apple to come along and say whats what in the EU?
Umm, Apple is just caught between conflicting laws. It's the EU and the UK who is saying what is what. Apple negotiated a price with the BPI, added their expenses, then picked a round number close to it. If the EU can't license music for the same price across all it's member countries, why should Apple be tasked with sorting it out? If you have to sell for the same price, fine charge Apple the same price, if not, fine don't complain when Apple sells different things for different prices. Guess what, the BPI won't sell music across it's borders at all, that is because it is illegal. Apple is just running a whole series of stores selling different products (different due to the fact that the laws on pricing and sales are differnt) in different countries. Consumers may see a song as being the same, but until the law reflects that fact, Apple can't be expected to pass laws and change it.
You need to pay a visit to the grammar nazi thread. Pronto.
>This is further complicated by the fact that
>although their end user license says you can
>only buy from the country in which you reside,
And this is the problem, not really that one charge different prices in different countries (or even within a country, happens for almost anything). Someone in UK is allowed to buy from France without there being allowed to be any restrictions or problems that does not exist also from someone in France. This is clearly not the case here.
The thing is not that they charge different prices really, but that they won't allow someone from the UK to shop from France. Hence, the result is that they end up having to pay more. That in itself is not the problem, is it a result of it. If the ones supplying Apple won't allow it, then Apple simply can't make a deal with them.
I can go and order a book from a French bookshop over the net, I then pay what someone in France would (possibly higher postage). The French shop can't say I must go to their Swedish shop (regardless of if it costs more or less). Nothing actually prevent them from having a shop in Sweden charging more of course, it is another issue.
Anyway, maybe this might backfire and the EU will force the European equivalents of the RIAA to standardise over the whole EU. Who knows?
ciao
So why do they not take a more 'global' approach and license the music from the cheapest source in the EU and sell it EU wide? That way they would be putting the various national licensing organisations in competition with each other. As has already been noted, it is possible to buy CDs from any other EU country, so it should be possible with online music downloads. The only difference in price (paid by the consumer) should be accounted for by the varying VAT rates.
Which is even more reason to allow people to buy from any store. Your 'local' store may not have the track you want, but it may be available in another country's store.
APPLE CANT CAUSE THE RECORD LABLES ACROSS EUROPE WONT LET THEM!
IPs had nothing to do with it, its your record labels that are preventing it against your own EU orders.
Its easy to pick on the American company when its the European Goverment who screwed up.
"Slashdot, where telling the truth is overrated but lying is insightful."
They are not allowed to do that because of the licensing.
Do you really think Apple wouln't be the first to be happy to have only one store for all europe?
I can go and order a book from a French bookshop over the net, I then pay what someone in France would
It's true, you can. But you can't order an e-book from a store in France. The reason is that a book is physical purchase that happens to have intellectual property already published on it. The other is a license to a copy of intellectual property which someone in France does not have the rights to sell you, since the right to publish it in your country is owned by a different party. Get it?
it is possible to buy CDs from any other EU country, so it should be possible with online music downloads.
When you buy a CD, you buy a CD. When you buy an mp3, or AAC file, you are buying a license to make a copy (Actually several copies) for your own use, in your country. One is a purchase of a physical object, one is a license to intellectual property. Just because intellectual property laws are stupid, don't blame Apple. They are just stuck between two conflicting laws.
No company can set shop in different EU countries and then dictate in which one you can buy.
It is that simple.
IANAL but write like a drunk one.
It is one of the many reasons that Britain should leave the EU
Face it the EU screwed up and instead of admitting it they are taking the usual bash the US company stance which is why US companies hate working in the EU. The only reason they do is cause the money is still worth the hassle all the convoluted laws cause.
"Slashdot, where telling the truth is overrated but lying is insightful."
Maybe, but see here is a instance (and not the first one) where despite being overwelmingly against it, Britan is profitting from the crazyness of the law. If the British are that much against the EU (and I would be too, its designed like how the United States works, yet without a head government to control it and pass the laws for it, of course its bound to fail, no two countries are going to have the same law) then thhey would dump the case and just get out.
"Slashdot, where telling the truth is overrated but lying is insightful."
Someone in UK is allowed to buy from France without there being allowed to be any restrictions or problems that does not exist also from someone in France.
Try thinking of it in terms of something else that is regulated by law individually in each country. For example, Suppose a company was selling hovercraft operating correspondence classes, including a hovercraft operators permit. In each country the end result for the user is the same, they know how to operate a hovercraft and have permission to do so (within their country). Now suppose the UK and France both charge different amounts for said permit. If the company that offers the class charges students in the UK, and students in France a different amount, is that a violation? That is basically analogous, except that the respective countries have delegated the authority to license music within their country to private companies. If Apple sells music downloads in France for the price the BPI has set in the UK, and then hands over most of the money to the BPI, they will be sued for copyright infringement by the music licensing body in France. Since Apple has no right to license people to sell music in France, save under the terms they have worked out with the music licensing body in France. It is the same as trying to sell British hovercraft permits to the French.
"Apple negotiated a price with the BPI, added their expenses, then picked a round number close to it. If the EU can't license music for the same price across all it's member countries, why should Apple be tasked with sorting it out?"
Well, saying its the record companies' fault might be accurate, but doesn't solve any of the issues. Regardless of who's at fault, it looks like someone is breaking european law by placing restrictions on the trade and movement of goods in europe.
someone is breaking european law by placing restrictions on the trade and movement of goods in europe.
As far as I know, intellectual property has never before been included in the "goods and services" that the EU is regulating. I think the close parallel between this intellectual property, and the already published CD which is normally sold, is the reason for people to want it treated in the same manner.
I think dictating which store you can use is a result of copyright/licensing issues. Making you buy from one store or another is probably legally valid in that context. Bear in mind that Apple would probably be violating licensing terms with the record companies regarding distribution if they weren't separating these stores.
Again, overcharging is not nice of them if that's what's going on. But it's a totally separate issue.
You miss the point, it doesn't matter were you live in Europe, you are allowed to buy from anywere. The fact that someone wants to not allow it is the problem. You are not allowed to dissalow people from anpother EU country to buy it. IN what way you sell it is irrelevant.
It all comes down to were it is sold I presume. The thing is, you can't decide if someone can buy based on were they LIVE. This is what they are doing. If you go to the french site and they notice you seem to live in England, you would not be allowed to buy, THAT is what they are not allowed to do. The fact that one can buy directly in one country while never going there over then net is possibly complicating it but not really a problem. One have been able to do it before the internet by sending a normal mail for exapmle, internet just makes it more convenient and easy.