Ever since Steve Jobs opened the iTunes Store in Europe (or Yoorp, as it's better known to many Americans) in June 2004, people - and organisations such as Which? - have been complaining about the fact that a track which cost 79p in the UK cost €.99 - which was almost always less than 79p. (And still is, just, as the pound sinks.)
Which? complained to the Office of Fair Trading about the disparity, and with customary alacrity the OFT referred the matter to the European Commission. Which grinds slowly, but exceedingly small. It has threatened Apple with fines (while also making grumbly noises about interoperability between iTunes Store-bought tracks and other digital music players, which seems like less fertile ground).
Interestingly, at the same time as this news, the EC is to drop an antitrust case it was trying to build against Apple and record companies such as Sony BMG, EMI, Warner Music and Vivendi over allegations of unfair pricing and distribution of online music. From the story:
The commission's investigation centered on European consumers being charged differing amounts, and having access to different iTunes songs, depending on their location. Both Apple and the record companies were under investigation, though the spotlight was on the record companies for imposing these sales arrangements on the technology company, refusing it pan-European licenses.
Fancy that.
Anyway, Apple now says that within six months it will lower UK prices to standardise prices around Europe. Well, to be precise, the record labels will lower the price they charge it. From the press release:
[Apple] will lower the prices it charges for music on its UK iTunes Store to match the already standardised pricing on iTunes across Europe in Austria, Belgium, Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and Spain.
Great, you say.
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 wholesale prices in the UK to the pan-European level within six months.
Ah. The iron fist behind the velvet glove. Talking of which..
"This is an important step towards a pan-European marketplace for music," said Steve Jobs, Apple's CEO. "We hope every major record label will take a pan-European view of pricing."
Note the wording, such as the use of "major": does that mean that any independents which don't fall into line (and who make up about 50% of music sales in the UK, unlike the US where they have a smaller share) will get booted off iTunes?
It's a victory, of sorts, for consumers, and sort-of for Apple, but it's going to leave some UK record execs feeling rather bitter, I suspect, at a time when they're already having enough shakeups - such as that at EMI yesterday.
