NEWS The Consumers' Association has referred Apple's iTunes to the Office of Fair Trading, claiming the song shop is overcharging its UK users.
Its beef with Apple is due to the company's European pricing structure. To download one track costs a UK consumer 79p. In France and Germany, it's 99 eurocents - meaning a shopper this side of the channel is a good few pence worse off for every track.
Phil Evans of the Consumers' Association said the group had reported Apple to the OFT on grounds Cupertino appears to be practising anti-competitive and discriminatory pricing structure.
The group's complaint may hold water under EU law, which stipulates UK shoppers should be able to enjoy the same advantages as their European counterparts. However, a shopper wanting to buy an iTunes track with a UK credit card can't use the French or German service.
Apple responded that the price structure was based on market influence, saying in a statement: "The underlying economic model in each country has an impact on how we price our track downloads. That's not unusual, look at the price of CDs in the US versus the UK. We believe the real comparison to be made is with the price of other track downloads in the UK."
Apple claims it holds around 70 per cent of the market in legal online music downloading.
Comments
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1. Craig
Some justified criticism of Apple for a change. Note the keyword, JUSTIFIED. Hopefully we'll see price-per-song drops in the not too distant future or access to our fellow European's stores at least.
2. Anthony Smith
So because we are being ripped off by record companies who overcharge us for CD's, Apple think it's OK to overcharge us for their services! Another stunning example of why this is "Rip-off Britain". The music industry and companies that offer legitimate downloading services are hardly going to win round a generation of kids who have got used to "free" music with this attitude.
3. anonymous
So Apple's defence is It's OK for Apple to rip people off because others are already.... hmmm.... Let's hope the OFT are succesful.
4. anonymous
Regarding the comment "look at the price of CDs in the US versus the UK".
Thats very true, but that is probably the reason why so many people in the UK buy their CD's from the States.
5. anonymous
I thought one of the points of membership of the the EEC/EU was for us to reap the benefits of a move towards a common economic community (and therefore a common economic model). A detailed examination of the economic model at work in this case couldn't possibly justify such a price difference between the UK and our European partners. The Consumer Assocation is doing a good thing for us here. They should be forced to make a detailed justification of their own pricing model given that the differences in product and distribution are negligible between the countries involved.
6. anonymous
Apple's response does not hold water. So we are talking about an oligopoly, rather than a monopoly. Everybody knows that the cost of music in the UK is artificially high. Another example of rip-off Britain.
The visibility of the iTunes stores and their pricing structure, just makes me feel even more outraged. Why shouldn't I be able to buy my online music from any location that I choose? I can with most other products. Hell, I even purchased something online from Thailand recently! It's an obvious contravention of the canon of free trade that the EU was created to uphold.
I wish the Consumers' Association the best of luck, but knowing the pace at which the EU normally deals with these cases, it will probably take years to resolve. Let's hope that the Yahoo/Muscimatch link up provides some much needed competition, but somehow I doubt it!
7. Jaime Neail
My limited experience has shown me iTunes 'IS' a rip-off! I'm fairly new to iPod/iTunes in fact only for the past 6 months however in that time I purchased 4x full albums and 4x singles. To my disappointment each of the albums I purchased @ £7.99 each I later discovered where all available at either the same price or for no more than £1 more on Amazon, where if I'd purchased from them I'd have the original CD & Packaging as well!
Not Good all round.. I've stopped using iTunes 'Downloads' feature as a result, choosing to purchase all my music on CD first.
8. Mark SPLINTER
Ripping off artists more like!!! Why is the CONSUMER and PRICE always first while the methods of production remain ancient and boring and the quality of major label output stays ridiculously low?
Demand better music, then pay two quid for it, the artist getting 1.50
THAT would be more like it.
Idiots.
9. Dick Wallin
It's the record companies that are still the real villains here. Apple said before that the economic model is driven by the different licencing models of the record comapnies in the UK. What they're re-iterating here is that despite this restriction, they're still doing it better than the other online resellers.
The music rights are not Apple's to sell (unfortunately). I am certain that if they were Apple would be delighted to lower the price: it would mean they could sell more iPods which is how they make their money.
10. anonymous
And people still buy ipods/ macs and any other apple product!
Why!!!!!!!!!
11. anonymous
This is no differnt to the guy selling onions in the market. If we keep paying the price asked, then the price is right. If we are being asked too much then we can survive without music downloads, so there is not much pressure on us to play ball.
If you were selling stuff and you knew people would be just as prepared to pay 79p as they would 72p, what would you do? Would you right off 10% of the price and give away that money because you were a generous person?
12. Phil Blackburn
It's not so much charging more in their UK store that's the problem here, it's stopping EC citizens from buying at any EC store which is illegal. It looks like an open and shut case, so hopefully the courts should be able to fast-track it.