iTunes to Face EC Scrutiny

The United Kingdom’s Office of Fair Trading (OFT) passed a complaint from a
London-based consumer organization over Apple’s iTunes
pricing policy to the European Commission (EC) Friday.

In a statement, officials at Which?, the consumer advocacy group that filed
the original complaint to the OFT, said they were pleased by the agency’s
decision to pass the matter up to the EC.

“U.K. consumers are getting a raw deal from Apple,” Phil Evans, Which?
principal policy advisor, said in a statement Friday. “The online music
market is a huge growth area; the single market should work the same in this
market as in others.

“We’re campaigning for free movement of goods and services in Europe and
we’ll take on any company, or group of companies, that seek to carve up the
market to their benefit,” Evans continued.

Officials at Apple and the EC were unavailable for comment at press time.

At issue is the software company’s per-song pricing, which critics in the
U.K. say is more expensive than in other European countries. Because the
complaint was lodged in the context of a single European market, rather than
just within the United Kingdom, the OFT decided to pass it up to the EC.

“The OFT has decided that the European Commission is better placed to
consider this matter, in particular as Apple iTunes operates in more than
three EC member states,” an OFT statement read. “In addition, the OFT
considers that the European Commission is in a better position fully to
address the issues raised by Which? in the context of wider single market
issues relating to how the online exploitation of music is licensed across
Europe.”

According to a Sept. 15 statement by Which? to the OFT, a song on Apple’s
iTunes service costs U.K. downloaders 120 Euro cents, compared to 99 Euro
cents in France and Germany. Which? charges that under European law,
consumers are entitled to the same price as any other member state. Also,
attempts by U.K. Internet users to log into the French- or German-based
iTunes service were rebuffed, Which? officials maintain.

A Which? statement refers to an answer they received from Apple officials in
regards to the pricing policy. The Apple response was that the economic
model in individual countries determines the per-song download prices.

Apple’s iTunes has been enjoying an incredible run of success worldwide.
Earlier this year, with the launch of an updated
iTunes desktop player, company officials reported the online music service
accounted for more than 70 percent of the total market share in legal music
downloads, with 2.7 million songs purchased weekly.

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