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European Commission Welcomes Apple’s Announcement to Equalize Prices for Music Downloads from iTunes in Europe

United States
English
January 09, 2008, WASHINGTON — The European Commission welcomes Apple’s announcement to equalize prices for downloads of songs from its iTunes online store in Europe within the next six months. This puts an end to the different treatment of UK consumers who currently have to pay higher prices for downloads. The different treatment to UK consumers was a major concern for Which?, a UK consumer association, who filed a formal complaint with the Commission. The Commission’s antitrust proceedings have also clarified that it is not agreements between Apple and the major record companies which determine how the iTunes store is organized in Europe. Consequently, the Commission does not intend to take further action in this case.

“The Commission is very much in favor of solutions which allow consumers to benefit from a truly Single Market for music downloads,” commented Competition Commissioner Neelie Kroes the outcome.

Apple operates an iTunes on-line store with different views in the European Economic Area (EEA) which sells music downloads. EEA consumers can only buy music from the view which is directed to their country of residence and which contains the music that is cleared for sale in that country. iTunes 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. Prices for iTunes downloads in the UK are currently nearly 10% more expensive than downloads in the euro-zone.

Following iTunes’ announcement, UK consumers will soon pay the same for music downloads from iTunes as customers from the euro-zone countries. The Commission’s antitrust proceedings further allowed the Commission to clarify that there is no agreement between Apple and the major record companies regarding how the iTunes store is organized in Europe. Rather, the structure of the iTunes store is chosen by Apple to take into account the country-specific aspects of copyright laws.

The Commission 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.
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