EU to drop Apple antitrust case

9 Jan 2008

Apple’s iTunes store will be selling music downloads to its UK market at the same price as the rest of Europe following an agreement with the EU that will see its anti-competition case dropped after two years and several inquiries.

Until now, UK residents were forced to pay nearly 10pc more per song download than the rest of the Eurozone, who pay 99c per track. This was found by EU regulators to be against the nature of a European single market.

While Apple has now agreed to use the same pricing across the EU, the different charges were based on the fact that iTunes customers in one EU country are locked out from accessing the store in another country as they are required to enter payment details by way of a credit card, with a postal address in their country of residence.

Meanwhile, Apple said the cause of price differences between the UK and the rest of the EU was not an issue of different currencies but rather the increased cost to distribute music in the UK from certain record labels.

The company said in an official statement, “Apple currently must pay some record labels more to distribute their music in the UK than it pays them to distribute the same music elsewhere in Europe.

“Apple will reconsider its continuing relationship in the UK with any record label that does not lower its UK wholesale prices to the pan-European level within six months.”

Having name-checked the record industry as the cause of unfair pricing, Apple then went on to call the agreement with the EU “an important step towards a pan-European marketplace for music.”

“We hope every major record label will take a pan-European view of pricing,” said Apple CEO Steve Jobs.

However, Jonathan Arber, an analyst with UK tech consultancy firm Ovum, says this is only the beginning of the story,”Apple has blamed the record industry for its wholesale pricing policies, and threatened to reconsider its relationship in the UK with those who refuse to lower their prices.

“This is likely to further damage Apple’s already fractious relationship with the major labels, many of whom now seem to be moving rapidly towards DRM-free options, with freeing themselves from iTunes’ dominance as a key motivation,” he says.

By Marie Boran