European Commission closes enquiry on Apple

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The European Commission (EC) has closed the enquiry against Apple for
charging more UK users than other EU users for downloads of its iTunes
music, following the company announcement on 9 January 2008 that it will
reduce download prices for UK within 6 months to align them with prices in
continental Europe.

A formal investigation had been opened by the EC against Apple after
‘Which?’, a UK consumer protection organisation, filed a complaint in
September 2004 against the company who was applying 20% higher prices to
British users than for the other European users. The difference has
decreased in time reaching down to 6% and, following discussions between
Competition Commissioner Neelie Kroes and Apple chief executive Steve Jobs,
the company decided to equalise the prices within a 6-month period.

“The Commission is very much in favour of solutions which allow consumers to
benefit from a truly Single Market for music downloads.” was the Competition
Commissioner Neelie Kroes’s statement.

“This is an important step towards a pan-European marketplace for music,”
said Steve Jobs, Apple’s CEO adding: “We hope every major record label will
take a pan-European view of pricing”.

The issue that remains under discussion is that of the geographical
restriction; Apple does not allow purchases on iTunes digital stores from a
different country than the residence one. A user from France for instance
cannot buy from the German iTunes and Apple verifies the user’s residence by
means of the credit card during the transaction.

Apple states that this policy is due to the different music copyright laws
and rules of the European countries. The EC agrees with this position
stating that the contracts between Apple and the major record companies
are not in breach of the current EU legislation. “..the fact that the same
content is not available on a pan-European basis is not the result of
restrictive business practices between Apple and major record companies.
Rather it is the result of the existing state of copyright legislation (…)
Some record companies choose not to make available their content on a
pan-European basis. They do so in full respect of copyright regulation.
There is no violation of antitrust regulation” stated Kroes’ spokesman
Jonathan Todd, at the daily Commission briefing on 8 January 2008.

Unfortunately, the European Commission did not consider the other
Apple-related topics revealed by the consumers association in EU: its
dominant position in the EU online music market, its DRM-related practises
or its lock down problems. But some of these aspects are still under
investigation in several European countries by the national Consumer
Ombudsman.

European Commission welcomes Apple’s announcement to equalise
prices for music downloads from iTunes in Europe (9.01.2008)
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/22&format=HTML&aged=0&language=EN&guiLanguage=en

EU pressure ends iTunes price unbalance (10.01.2008)
http://www.euractiv.com/en/infosociety/eu-pressure-ends-itunes-price-unbalance/article-169446

Apple to Standardize iTunes Music Prices Throughout Europe (9.01.2008)
http://www.apple.com/pr/library/2008/01/09itunes.html

iTunes announcement is music to Which?’s ears (9.01.2008)
https://www.which.co.uk/press/press_topics/campaign_news/other_issues/itunes090108_571_129012.jsp

EDRi-gram: European Commission investigates Apple’s European prices (26.09.2007)
http://www.edri.org/edrigram/number5.18/ec-apple-prices

EDRi-gram: iTunes under continuous attack in Europe (21.01.2007)
http://www.edri.org/edrigram/number5.2/itunes