Apple to cut iTunes charges

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Apple is ditching its policy of charging UK consumers more than other Europeans when they buy songs from its iTunes service, following an EU antitrust investigation.

The computing giant announced this morning that it will cut prices at its UK iTunes store within six months, bringing them into line with iTunes pricing across Europe.

The move is a significant victory for the Which? consumer watchdog. It prompted the EC's antitrust proceedings against Apple last year by complaining that British customers paid almost 10% more than those in the eurozone.

Apple had blamed the record industry for charging it more to distribute their music in the UK than to distribute the same music elsewhere in Europe. Today, it threatened to stop dealing with any record label that does not lower its wholesale prices in the UK to the pan-European level within six months.

"This is an important step towards a pan-European marketplace for music", said Steve Jobs, Apple's chief executive. "We hope every major record label will take a pan-European view of pricing."

Commenting on the outcome, EU competition commissioner Neelie Kroes said: "The commission is very much in favour of solutions which allow consumers to benefit from a truly single market for music downloads."

Apple operates an iTunes online store with different country-specific views in the European Economic Area (EEA) - the EU-27 plus others - which sells music downloads. EEA consumers can only buy music from the view that is relevant to their country of residence and which contains the music that is cleared for sale in that country, Brussels said.

The company checks the consumer's residence through their credit card details. For example, in order to buy a music download from the UK view a consumer must use a credit card issued by a bank with an address in the UK.

In the UK, a single iTunes track costs 79p, while in the rest of Europe it costs €0.99 (74p). At current exchange rates, that means UK consumers are paying 6% more. When the antitrust case began in April 2007, the difference was around 10%.

The commission said it is very much in favour of solutions which would allow consumers to buy from the iTunes' online store without restrictions but it is aware that some record companies, publishers and collecting societies still apply licensing practices which can make it difficult for iTunes to operate stores accessible for a European consumer anywhere in the EU.

Apple to cut iTunes charges | Business | Guardian Unlimited