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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.
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.
will apple keep 0.99 euros and change the british price or keep 0.69 pounds and change the euro price?
Apple's an American company. They should just set the price at $0.99 and let everyone do the math at checkout.
99 US cents = 0.74 Euro cent = 51 pence
99 Euro cent = $1.33 = 68 pence
79 pence = $1.53 = 1.14 Euro
So going with UK units, the US and Europe get screwed. With Euro pricing, the US gets screwed, while the UK gets a drop in price. Pricing based on the dollar, the US stays the same, and both Europe and the UK get a bargain. Sounds like a win/win for everyone!
I mean, really, think of the slogan:
"One world. One price. One dollar."
(or is that too....er...militaristic?)
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.
Wouldn't the same principles forbid use of CSS to charge different prices for DVDs in different regions?
No, because there's only a single DVD region for the EU (and even other countries outside the EU, like Switzerland).
The iTunes case is about different prices inside the EU. A German guy is free to buy a car in Spain. A UK resident can't buy a song from the French iTMS. That's likely to be illegal.
England is not the UK. In fact the labour governement is still 'considering' the Euro, but given that Gordon Brown (not English), likely the next Prime Minister, is hostile to it a switch doesn't look likely in the short term. Eventually I imagine they'll have to switch over to the Euro - it's certainly quite handy for frequent travellers within the EU and for businesses.
The prices have never been equivalent to the exchange rates (not even close). The UK store has consistently been more expensive. This is probably because the record companies think they can get away with it (as they do with CDs), not because of exchange rate difficulties.
It's really a bit of a farce that they're forced to have different stores in different countries anyway. Apple would probably prefer to just have one store and let the user change their language/music preferences, but the music companies have too much to lose from allowing a global marketplace in their IP, so they're trying to hold out as long as possible.
As with regional DVD encoding it'll probably die a quiet death somewhere between 2010 and 2020.
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.
No, the issue is not to do with price. If UK law says only the BPI is allowed to sell songs in the UK, then UK law goes against EU law and needs to be updated. Apple are quite at liberty to sell songs at £5,000,000 each in the UK and 1 cent in the EU, but they MUST allow us to buy songs from the EU stores and run the risk of no one buying the £5,000,000 tracks.
The EU law does not say that you must offer it at the same price to all EU members, it says that you must allow all EU members to buy from any place they like.
Bob