UK iTMS Violating EU Competition Rules?

[edesignuk]

Apple's iTunes music download service has been accused by the Consumers' Association of overcharging UK users.

The group accused the service of charging UK-based customers nearly 20% more than those with addresses and payment details in France or Germany.

The group has written to the Office of Fair Trading (OFT) asking it to investigate iTunes for possible breaches of EU competition rules.

Apple UK told the BBC it had no immediate comment to make. Full article. (http://news.bbc.co.uk/1/hi/business/3658200.stm)

[garybUK]

Just beat me to it........ seems like this could be a result for us, I didn't think 79p a track was all that bad, but its true they are charging us more than France/German and this isn't fair.

And before people start moaning that we don't have the Euro currency yet, can apple not set the prices with the exchange rate?? many shops here take Euro's and manage to do it just fine.

Personally I havn't downloaded anything from iTunes because for £2 more I can get the full cd with far superior sound quality and can rip it to any format I like.

[Savage Henry]

Yeah I was just reading that article.

Everything is more expensive in this country, price of cars, cost of fuel, house prices, cost of corned beef ... everything .... I've learned to live with it and got over it.

Considereing the download market is still barely hovering around the 1% region of the market, can't the Consumer Association do something about the extortionate pricing of CDs that they've been promising for years?

[Badradio]

It's even more unfair when you consider that almost all of the good music comes from the UK. Selling our talent back to us... :p

[MacRumors]

The BBC reports (http://news.bbc.co.uk/1/hi/business/3658200.stm) that the UK Consumers' Association is looking into allegations that prices are higher for the UK localization of the iTMS than they are for either the French or German localizations. The group has written to the Office of Fair Trading to investigate a 20% higher rate per downloaded track in the UK compared to either of the other two stores.

Apple has defended their UK pricing policy, stating that the underlying economic model in each country has an impact on cost-per-track for each localization. The comparison shouldn't be made between each localization of the store, but instead should be made to other per-track download options available in the UK.

[centauratlas]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.

[gaomay]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.

Ummmm the UK is part of the EU, so it actually is their business.

[MOFS]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.

EU? Where? Nowhere in this article does it mention the EU - the OFT is run by the British government.

To be honest, as a Brit, all you can say about this is that the people doing this investigation have a point. The only thing you can say bad about this is why they're just attacking the iTunes music store on this, when the rest of Apples's product lines is in exactly the same boat - not forgetting the vast majority of the electronics multinationals. This is a case of rip-off Britain (again), and this is the first time I've seen anyone take a stance against this in the news, apart from when Tesco's tried to sell cheap Levis... :(

[edesignuk]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.Course, it's not like America would ever consider telling others what they should/shouldn't, can/can't do :rolleyes: Those EU boys have got a nerve, haven't they!? :p

The Consumers' Association are looking out for my interests by raising this with the EU (which we are a part of), why should I have to pay more than my EU counterparts? :mad:

[davey-nb]

This from Reuters:

"Targeting iTunes is an odd choice. In Britain, Apple's music service is cheaper -- in some cases more than 20 percent cheaper -- than rivals Napster and most of the online retailers that resell the catalog of music download firm OD2.

As a result, iTunes sold over 450,000 downloads in Britain in its debut week, propelling it to what is widely believed to be a substantial market lead over rivals.

The Consumers' Association said it had no plans to investigate the pricier download services."

Conspiracy anyone??

[ssamani]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.

Erm... actually its quite a very good thing from a consumer point of view. Basically the EU is supposed to be a free trade area. In other words I should be able to cross the border from France to Germany as a UK citizen and be able to buy anything legal in Germany that I could buy in the UK or France. I will pay local taxes, e.g., VAT, and then take that to the UK without having to pay any import duty. I should be able to do this on the web aswell. So for example I was able to buy a BlueTooth adaptor for €20 with free shipping (to Germany) from Amazon.de, even though it was £23 plus shipping from Amazon.co.uk. Now I could have paid for delivery from Amazon.de to the UK, but it wouldn't have worked out cheaper and I was in Germany with work anywya.

Apple does not allow me to buy music from iTunes Music Store in Germany to take advantage of favourable FX rates and taxes. It is effectively locking me into higher prices in the UK. If they can show that this is due to highter VAT or other taxes, they will not be told off for setting different prices, but they must allow me access to the German and French stores. They will not loose out because they will be passing on the VAT to the customer. However the price hike is probably not due to VAT (France, Germany and UK don't vary that much- UK 17.5%, Germany 16%) it is due to Apple effectively fleecing UK customers who are a bit more keen on the iPod and iTunes and they can get away with charging more.

A fair playing field across the EU is what is intended. Obviously it is a little unfair on companies that they get hit by FX rates this way, hence the Euro. At the moment they also have to deal with tax competition between countries, e.g., Eire dropping corporation tax to attract investment. So some leaders in the EU want tax harmonisation as well - however like the good old Boston Tea Party, Europeans don't want taxation without appropriate representation - the European Parliament is a toothless body that would not currently get responsibility for setting taxes. Hence why it hasn't happended.

I would much rather the EU protected consumer's rights than business rights. This is a very good thing.

[theahnman]

Haha looks like the Brits have really got Apple in their sights. First the Apple Corps thing, and now this. Wonder what's next for the EPIC STRUGGLE between Apple and the UK.
:-P

[ssamani]

This from Reuters:

"Targeting iTunes is an odd choice. In Britain, Apple's music service is cheaper -- in some cases more than 20 percent cheaper -- than rivals Napster and most of the online retailers that resell the catalog of music download firm OD2.

As a result, iTunes sold over 450,000 downloads in Britain in its debut week, propelling it to what is widely believed to be a substantial market lead over rivals.

The Consumers' Association said it had no plans to investigate the pricier download services."

Conspiracy anyone??

The question is
a) does the price for Napster UK vs Napster France differ once FX rates are taken into account
b) more importantly can you purchase music from Napster France from Germany or from the UK

Napster can charge more in the UK than iTunes if they want, but they need to be charging an equivalent amount in Euros in France and Germany (do they have a store in France or Germany?)

[techgeek]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.

Well the UK is part of the EU, just not part of the single currency (Euro zone).

I've been wondering about how the localised itms work acctually (legaly speaking) since there is suppose to be a single EU "market". That was the original point of the EU. The Common Market became the European Economic Community (EEC) became the European Community (EC) became the European Union (EU).

Maybe I just don't understand it all :confused:

[vienna]

It will be interesting to see if the justification for the slightly higher price is that the record companies in the UK take more in their cut of each song sold when compared with mainland Europe.

I'm a Brit who currently lives in the USA, but I agree that there are far more prevalent cases of British people being over charged than the miniscule online music download market (and even then only Apple's segment of it).

[Dunepilot]

Of course, it is possible that the overheads in the UK are different (it depends on whether Apple actually has a physical presence to support the UK iTMS - higher cost of premises and other infrastructure, higher wage rates and so on could all contribute towards a higher end price for the UK consumer).

I also wrote last week to drowned in sound (http://www.drownedinsound.com) , the fanzine that has now started its own label, asking them whether their stuff would be on the iTMS, and was told that they may do it soon, but that their share of the profits from doing that would be very low.

We all know how the indie labels balked at this situation until Apple offered them a better deal, but if the consumer track-by-track prices were to fall, it seems unlikely to me that little labels like this would sign up to the iTMS as the profit margin for them would no-doubt shrink further. If reports are to be believed, Apple isn't exactly raking in profits from the iTMS, as it's rumoured to be there primarily to push sales of iPods.

I don't know what my conclusion from all of this is, but it does seem like things are quite closely balanced at the moment, and a push from consumer groups of this sort might not actually help to increase the catalogue of music available on the store. I, for one, like the convenience of the store a great deal, but there are only a handful of bands whose music I've bought from the iTMS so far (Hundred Reasons, Yourcodenameis:milo, The Get Up Kids), simply because my tastes aren't yet very well represented.

Off-topic: Why aren't At the Drive-In on the iTMS yet??!!??! EMI own Grand Royal according to The British Library Sound Archive, so their last album should at least be available.

[Sabbath]

I think the first thing to take into account is exchange rate variation, we in the Uk don't use the Euro so Apple needs to establish a long term average rate at which it feels the exchange rate will stay. As changing prices with the exchange rate changes is not going to be popular with customers who see the nominal (and to them real) value of their tunes increasing, while apple would be holding their real value (in dollars, although this is not strictly true as costs are likely to be in local currency but the real vlaue of profits is in dollars) constant but increasing the nominal price in pounds. So I think the first thing to consider is a relatively stable long run level of sterling (£) Euro exchange rate. If Apple considers the pound is currently overvalued compared with the Euro then such a pricing policy is acceptable. Otherwise we could see intervention forcing the price down to the Euro level and then if the pound weakening relative to the Euro the Euro price forced down to the pound level, such that Apple keep getting less and less in real value.

I think the reason this has been jumped on is as the store is a virtual one it is easier to calculate costs for different regions. When you consider physical businesses there are many more costs to consider for example the cost of premises and staff which vary widely across economies. There is probably little difference between the cost in either area, especially as the whole store is based in luxembourg, and as such they can't argue the economic model in each country has an effect. That is unless Apple is paying much more for the license to sell songs in the UK, I am unable to make an assumption about this due to my lack of knowledge of the the record industry structure across the three regions.

To those who say the UK (or EU) doesn't have a role in the business of an American company, I would have to disagree. If Apple is making greater profit per song in the UK in the long run (ie therfore excluding exchange rate variations) then welfare in the UK will be lower. This is due to a reduction in consumer surplus of the individuals in the UK who purchase at a higher price, and those at the margin who do not purchase at the Uk price but would of at the Euro price. The surplus lost on consumers forced to pay a higher price is accrued to apple as profit and hence transferred out of the UK (EU). The surplus lost by those who do not buy at the higher price is lost full stop. So consumers and Apple together would be better off at the lower price but Apple alone would be worse of. As both are better off together this poicy would also be applied to a UK (or EU) company acting in the same manner and hence does not violate WTO national treatment rules.

The process is merely one of stopping a company (or companies combined as a cartel) using its monopoly power to charge excessive prices and make excessive profits at the expense of consumers. The problem I see is the ease in comparing prices and costs across the EU which is supposed to be a single market, and therefore it is difficult for apple to get away with price discrimination, if that is what it is. The problem is consumers in the EU should be able to take part in arbritrage to equalise prces but as you must have a billing address in the country to buy from iTMS this is difficult.

Doubt anything will come of this due to exchange rate considerations, but I wonder what would happen if someone challenged Apples right to only sell certain things at certain price to people from certain regions within the single market.

Sorry a bit long a messy but hopefully points out the reason for intervention.

[vienna]

Well the UK is part of the EU, just not part of the single currency (Euro zone).

I've been wondering about how the localised itms work acctually (legaly speaking) since there is suppose to be a single EU "market". That was the original point of the EU. The Common Market became the European Economic Community (EEC) became the European Community (EC) became the European Union (EU).

Maybe I just don't understand it all :confused:

I imagine that the different record companies are not willing to allow distribution of their music across borders. It must be easier for Apple to have a single store instaed of three (or four if you incude the US store), so the mutiple store fronts must be a compromise on Apple's part to the record companies.

Certainly I'd like there to be one world wide store where I could buy music from any county but it doesn't look like that is going to happen any time soon.

[Dunepilot]

... However the price hike is probably not due to VAT (France, Germany and UK don't vary that much- UK 17.5%, Germany 16%) it is due to Apple effectively fleecing UK customers who are a bit more keen on the iPod and iTunes and they can get away with charging more.

A fair playing field across the EU is what is intended. Obviously it is a little unfair on companies that they get hit by FX rates this way, hence the Euro. At the moment they also have to deal with tax competition between countries, e.g., Eire dropping corporation tax to attract investment. So some leaders in the EU want tax harmonisation as well ...

I don't see how tax harmonisation can occur any time soon :- we in the UK pay a very different amount of direct tax (e.g. income tax) than we would in the main European states. Plus our property prices are really quite different from theirs. Taxation systems in this country being out-of-sync with much of Europe seems to me to be a major reason why we won't be going into Euro-land for some time.

[Some_Big_Spoon]

Who do you think probably complained? not the consumers, but the lables/distributors/MS.. Everything is more expensive in the UK, and I'm guessing there's gigher fees involved with the iTMS.. this is FUD, plain and simple.



Yeah I was just reading that article.

Everything is more expensive in this country, price of cars, cost of fuel, house prices, cost of corned beef ... everything .... I've learned to live with it and got over it.

Considereing the download market is still barely hovering around the 1% region of the market, can't the Consumer Association do something about the extortionate pricing of CDs that they've been promising for years?

[voodoofish]

Considereing the download market is still barely hovering around the 1% region of the market, can't the Consumer Association do something about the extortionate pricing of CDs that they've been promising for years?

True, but I think the point is there is nothing to stop us from importing CDs from any other EU country, but the iTMS will only yet people with a credit card from the country the store is for use that store. When the EU is supposed to be all free trade between members etc. then that could be seen as illegal. However, the reasons iTunes is setup like that is because of the fact that music isn't liscenced for EU-wide distribution, but is done country by country, and that is why there are only UK, French and German stores as each country's distributers need their own separate agreement with Apple.

So really it isn't Apple's fault, but I think pan-European lisencing deals should be mandatory so it would aid the distribution of music (as, for example, Apple would only have to strike a deal with one distributor for the whole of Europe).

[techgeek]

itms UK is based in Luxembourg
http://www.apple.com/uk/support/itunes/legal/policies.html
I'm pretty sure they charge Luxembourg VAT rate as well.

This may well trickle down to why are the record labels gouging the UK.

[Sabbath]

Apple does not allow me to buy music from iTunes Music Store in Germany to take advantage of favourable FX rates and taxes. It is effectively locking me into higher prices in the UK. If they can show that this is due to highter VAT or other taxes, they will not be told off for setting different prices, but they must allow me access to the German and French stores. They will not loose out because they will be passing on the VAT to the customer. However the price hike is probably not due to VAT (France, Germany and UK don't vary that much- UK 17.5%, Germany 16%) it is due to Apple effectively fleecing UK customers who are a bit more keen on the iPod and iTunes and they can get away with charging more.

I'm wondering if there is a different level of VAT charged, I'm not certain over EU tax law on digital products. But if the store is based in Luxembourg, should it not just be a case of paying the VAT there (which I believe is one of if not the lowest in the EU) and then effectively it is shipped (transferred) to me in the UK tax free. Just as if I bought a cd in Luxembourg I would be able to pay the local sales tax and not have to pay VAT. I wonder if buying from iTMS in the UK equates to buying from a UK shop or a Luxembourg shop in terms of sales tax.

[Stella]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.

And this is coming from a yank.... look at your country first and see how it throws it weight around the world...

@Badradio
That is why the UK is still "Rip of Britain "because people carrying on buying the over charged.. Maybe if there were protests /boycotts companies would think again.

The British should protest like the French.. french protesting is *very* efficient and effective. At least they care enough to protest (yes, it does cause a lot of problems especially at ports etc).... and a few burning sheep ;-)

--
To be fair to Apple, iTunes pricing has a lot to do with record companies so maybe they should be invested (yet again) along side iTMS.

[voodoofish]

If the EU wants to get involved in the private business of a company, Apple should just get out of the rest of the EU. Talk about a bunch of busy-bodies wanting to tell the rest of the world (and the UK) how to conduct their business.

um, *hello*, every government gets involved in the private business of every company that operates in their country, there's these little things called laws you see. for example, if one company makes money by stealing stuff from people and selling it on, this is usually illegal. this law is designed to protect private property, considered by most essential to the running of a modern capitalist economy. Competition is also another one of these essential things, and so the EU having competition laws is, in my opinion, no bad thing.

[swissmann]

So Apple adjusts it's prices today and tomorrow the euro gains strength compared to the pound or vice versa. Do they adjust prices tomorrow. And as far a being a free trade zone I don't really think that makes much sense - when vacationing there our US dollar went a lot further in Greece which uses the euro than in the UK. If Apple needs to make music cost the same why don't the grocery stores need to make bread cost the same. I know it's a lot more complicated than that - but that's my point. It is complicated so how do you solve it if you are Apple?

[Brize]

It will be interesting to see if the justification for the slightly higher price is that the record companies in the UK take more in their cut of each song sold when compared with mainland Europe.

This is really the crux of the matter. Given that Apple had to agree terms with each country individually (evidenced by the lack of a pan-European store at this time), one would assume that the cost per song to Apple is different in each country. This, together with a higher rate of VAT, would likely explain the pricing discrepancy.

If not, and it turns out that Apple are simply overcharging UK customers because they think they can get away with it, their business practices deserve to be scrutinised.

[voodoofish]

If Apple needs to make music cost the same why don't the grocery stores need to make bread cost the same. I know it's a lot more complicated than that - but that's my point. It is complicated so how do you solve it if you are Apple?

The complaint is not that the pricing is different, it is that you cannot buy songs from the German or French stores unless you have a German or French credit card. With bread you can buy it from whichever EU country you want, the same way you can buy bread from any state of the US that you want, and the fact that you can't do this with iTMS is what could be illegal about it.

[Brize]

The complaint is not that the pricing is different, it is that you cannot buy songs from the German or French stores unless you have a German or French credit card.

Not so. If that were the case, the complaint would be with the record labels, rather than with Apple.

Of course, a pan-European iTMS would be best for consumers, and easier for Apple. Typically, it's the record companies that won't allow this to happen.

[donutzeatpeople]

Even though all of this legal jargon with the UK, Apple Corps, etc is annoying. It does mean something to me: that Apple is becoming more of a threat in the business world. It seems like the companies that are doing well are always the ones who are attacked the mose (i.e. Microsoft). Hooray for Apple! :p

[virividox]

if this fiasco results in lower prices for the consumer then great :) thats all i really care about starving college student here

[macridah]

The UK has a high cost of living, so it's no surprise to me that the price of music also cost more. I bet the lease on the land, the wages they have to pay the support people, etc, in the UK cost more then they do in France and Germany.

I use to paying for higher prices since i live in northern cali, but when I went to the UK ... I was like, damn, it's expensive here!

[ssamani]

This is really the crux of the matter. Given that Apple had to agree terms with each country individually (evidenced by the lack of a pan-European store at this time), one would assume that the cost per song to Apple is different in each country. This, together with a higher rate of VAT, would likely explain the pricing discrepancy.

If not, and it turns out that Apple are simply overcharging UK customers because they think they can get away with it, their business practices deserve to be scrutinised.

Yeah, I've just clicked over in MacObserver that this may be the issue, not VAT or other taxes or price gouging. It may be about how much royaly payments Apple has to pay the relevant record companies in each country and also avoid the headache of dealing with cross-border distribution rights.

If one company has the rights in France and another in the UK and I buy from the French store, who do they pay? If it were a CD, the French company would get paid, but in theory you could buy a bunch of (potentially) cheaper CD's in France and sell them in the UK. If you are bringing them over for commercial reasons, rather than personal use, you would have to pay some import duties (??? not sure on how this works) but the French record company would have the rights and get paid. The law may not be easily resolvable for Apple on this one - the EU may have to legislate to deal with it.

Sanj

[webmatthijs]

i think 79p is a good price so i really dont mind. but are it is nature for men to like things cheap i will go with it. you may come this way cheaper songs, only if you want it apple!!!

[Sabbath]

Not so. If that were the case, the complaint would be with the record labels, rather than with Apple.

Of course, a pan-European iTMS would be best for consumers, and easier for Apple. Typically, it's the record companies that won't allow this to happen.

This is actually a substaintial part of the complaint, if we were able to buy from the French and German stores the price would be the same as Apple would know no one would buy on the UK store at the higher prices (unless their credit cards were charging a large premium for Euro transactions etc). Hence the argument of equal pricing is in response to this restriction.

If Apple is telling the truth that their costs are higher in the UK then this can only be due to music labels charging more as all other costs are in luxembourg and split between the stores (these costs is actually probably a bit lower for the UK as more traks are sold and hence and the market size is greater). Apple is just a store here we must remember it does not produce the music (ok it rips and stores it but the cost of that is negilgable compare to the amount sold). Thus this would come back on the music industry who would argue they do face the higher costs in the UK and thus justify the higher price.

[Badradio]

I vote with my wallet. All online music stores are overpriced and there is no way I'd pay for an album download when I can get the original in a shop. The best protest is not to purchase.
WRT my earlier comment, companies set prices within a framework of market realities; music is very big in the uk and people will pay to enjoy it. UK bands are doing very well at the moment and the market is strong for growth with new listeners taking notice of music outside of the mainstream manufactured dross. Apple are riding the new wave (quite rightly, since the iPod is one of the main drivers) and are reaping the rewards. You don't like it, you don't buy it.

[Brize]

This is actually a substaintial part of the complaint, if we were able to buy from the French and German stores the price would be the same as Apple would know no one would buy on the UK store at the higher prices (unless their credit cards were charging a large premium for Euro transactions etc). Hence the argument of equal pricing is in response to this restriction.

Sure, but I think the original complaint made by the Consumers' Association was about pricing. I would assume that those locality restrictions stem from the record companies, and not from Apple.

[mrsebastian]

this really is not apple's fault, but our greedy friends the record industry (as usual). the margins are so slim on music downloads, that if apple charged the same as germany and france they probably wouldn't make any money off itunes uk business. i have a very american point of view on this and that's if you don't like their pricing spend your money somewhere cheaper. if apple starts losing all their itunes uk business, they will change their pricing structure for you.

[Brize]

Yeah, I've just clicked over in MacObserver that this may be the issue, not VAT or other taxes or price gouging. It may be about how much royaly payments Apple has to pay the relevant record companies in each country and also avoid the headache of dealing with cross-border distribution rights.

I mentioned in my earlier post that it may be a VAT issue, but that's clearly not the case. VAT on recorded music in Germany is 16% and in France it's 19.6% (compared to 17.5% in the UK). As such, I'm sure it's the financial demands of the UK record companies that accounts for the discrepancy, especially as CDs are generally cheaper in France, despite the higher VAT rate.

If one company has the rights in France and another in the UK and I buy from the French store, who do they pay?

If you were to buy from the French store, the French record company would receive the royalty payment, hence the bar.

[The Red Wolf]

...Personally I havn't downloaded anything from iTunes because for £2 more I can get the full cd with far superior sound quality and can rip it to any format I like.

First thing about the iTMS. You don't have to download the whole CD if you don't want to. Selective track purchasing.

Second you cannot compare an AAC file to an MP3 file at the bit rate listed. 128 AAC is not the same as a 128 MP3. Its twice the quality. So about a 256 MP3. 128 AAC is on par with a CD. Play a 128 MP3 at the same volume on speakers to make any audiophile drool, then play a 128 AAC. Followed by a CD. Set up equipment to test the frequencies being sent out of the sound system. Then compare the results. Field tested rather than just paper numbers. You'll be surprised that AAC quality out performs MP3 and that it is almost identical to the CD. Or is this a Analog Vinyl vs. Digital CD debate? "I don't like ACC, it doesn't have the RPM distortion the drive puts on the CD at -18db." Much like snaps and pops on a record.

As for price? In British Colombia people pay twice the tax people do their neighboring province. Canada is the next target for an iTMS. If the iTMS in England were in Euro there would be an issue. Its not, its in sterling. A currency which is the most powerful in the world. Free trade based on exchange rate? Unless its live and always changing there is no way to handle that. A set price based on the financial conditions in the country makes sense

[swissmann]

The complaint is not that the pricing is different, it is that you cannot buy songs from the German or French stores unless you have a German or French credit card. With bread you can buy it from whichever EU country you want, the same way you can buy bread from any state of the US that you want, and the fact that you can't do this with iTMS is what could be illegal about it.

Is there a EU credit card?

[JDOG_]

Good for them (consumer group). Good for us (well consumers in general..).

I understand Apple is trying to stay in touch with the differing economic models of the U.K. and the rest of the E.U., but if they could have provided it a bit cheaper it would have been nice.

One could make the same argument that an iPod should cost less over there as well. I have fond memories of spending $44 on a brand-x 20-disc CD-R spindle at a curry's in London and thinking "there's something very wrong with this."

[takao]

Is there a EU credit card?

normally it shouldn't matter if a credit card is from germany or france or austria or somewhere else....

my guess greedy music industry (guess why music is more expensive in the UK ..because UK customers are buying a lot more music...)

[isaacc7]

If not, and it turns out that Apple are simply overcharging UK customers because they think they can get away with it, their business practices deserve to be scrutinised.

Err, that sounds like a perfect business model to me. What exactly is "overcharging"? If a sufficent number of people are willing to pay the price, who are you to tell them it isn't worth it? Companies are there to make money, not be nice guys. Apple is already lower priced than the competitors in Britian. If people are complaining that the price in Britian is more than it is in France or Germany, they need to understand that they are differnet markets. If they were the same market, Apple wouldn't have to go through all the silliness of different stores. You can't have it both ways, Either it is one market (with one price) or there are different markets with different prices.

Isaac

[Brize]

Naturally, in respect of overcharging, I meant relative to the French and German markets.

France and Germany may be different markets to the UK, but there are still EU regulations that have to be observed. I was simply saying that Apple should be scrutinised if it turns out that they've failed to observe those regulations. In any event, I'm sure the record companies are the issue here, rather than Apple.

[rdowns]

This from Reuters:

"Targeting iTunes is an odd choice. In Britain, Apple's music service is cheaper -- in some cases more than 20 percent cheaper -- than rivals Napster and most of the online retailers that resell the catalog of music download firm OD2.

As a result, iTunes sold over 450,000 downloads in Britain in its debut week, propelling it to what is widely believed to be a substantial market lead over rivals.

The Consumers' Association said it had no plans to investigate the pricier download services."

Conspiracy anyone??

OK, let's run with the conspiracy theory.

Reports of a huge Apple Computer settlement with Apple Corps. are wrong and the OTC are singling out Apple/iTMS because of it.

[Surreal]

Unfair?

WTF?

UNFAIR?

i won't even expand on the statement. the government...deciding what is UNFAIR? not...unjust...not...illegal...but..unFAIR?

[g4cubed]

I agree with a lot of people here that it's the record labels. Didn't Apple have to negociate separate deals with the major Labels in each country? Plus the Indies.
This, plus the cost differences from country to country has to be accounted for as well.

[broken_keyboard]

News flash: Apple engineers work hard in to the night to bring their music store to the UK. Wiping the sweat from their brow they proudly unveil the product and their reward is? The UK govt starts prosecuting them.

[chrisblore]

The main problem is that prices everywhere in Britain are so much higher than on the continent. This is because of high taxation and higher costs to companies with bases here because land is in short supply with Britain being the small island that it is and I suspect this is what is happening with iTMS (through higher costs for record labels who then have to pass this on to Apple's customers). Therefore, the real people to blame are the ones who are making the complaint, the UK authorities who, in typical British political style, are trying to shift the blame onto someone else instead of facing up to the fact that they are in the wrong (Kelly fiasco, 'dodgy dossier' etc. :mad: ).

[ITR 81]

I wonder if Apple could consider just pulling the plug in the UK.

I would if the legal expense starts to make a sizable dent in the profit margin.

[Brize]

broken_keyboard/chrisblore: It's not the UK Government or the 'UK Authorities' that are questioning the pricing structure. The Consumers' Association is a completely independent organisation.

[slash8slash1]

So some leaders in the EU want tax harmonisation as well - however like the good old Boston Tea Party, Europeans don't want taxation without appropriate representation - the European Parliament is a toothless body that would not currently get responsibility for setting taxes. Hence why it hasn't happended.
.

Well, now that's really way OT, but anyway, you can't tell it often enough: the EU is not a toothless body. In the case of Germany, more than half of the laws that pass the German Parliament are directives from Brussels. That means, once the 'toothless Body' has agreed on and passed a new law, EU national Parliaments are given a certain period of time * to make them national law *. There is no place for 'but' or 'wait a minute's, no changes and no arguing. It's fair to assume that in GB European Laws hold the same percentage as in Germany(more or less, I don't know how busy the british Parliament is). BTW, Batman on the Buckingham Palace was really cool ;-)

[houttbe]

Apple has a serious issue with discriminating between customers located in different EU states. For iTunes the Brits are paying more than the Germans and the French, but Dutch, Belgians, Danish etc. cannot buy iTunes at all! The same goes for refurbished products: the big Apple webstores have interesting weekly offers, but again customers from the smaller countries are not allowed to buy these.

I had an extensive correspondence with Apple Europe about purchasing a refurbished PowerBook from Belgium. Apple invented all sorts of reasons to deny access to their offer. In the end I happened to call the phone store and discovered that I could buy a refurbished PowerBook from them (and promptly did so!), so the whole issue became moot as far as I was concerned.

Still I persist in thinking that, beyond the legal issue, Apple is harming itself by ignoring customers from smaller EU states.

[zwida]

Second you cannot compare an AAC file to an MP3 file at the bit rate listed. 128 AAC is not the same as a 128 MP3. Its twice the quality. So about a 256 MP3. 128 AAC is on par with a CD. Play a 128 MP3 at the same volume on speakers to make any audiophile drool, then play a 128 AAC. Followed by a CD. Set up equipment to test the frequencies being sent out of the sound system. Then compare the results. Field tested rather than just paper numbers. You'll be surprised that AAC quality out performs MP3 and that it is almost identical to the CD. Or is this a Analog Vinyl vs. Digital CD debate? "I don't like ACC, it doesn't have the RPM distortion the drive puts on the CD at -18db." Much like snaps and pops on a record.

Uh, yeah, the sound quality of 128 AAC is much better than 128 MP3. It is NOT even close to CD quality on an audiophile sound system, however. These 128 AAC tracks are nice and small and sound great on an iPod, but they're far from how you're describing them. I don't think I've ever heard anyone make that claim with a straight face.

[visor]

It's even more unfair when you consider that almost all of the good music comes from the UK. Selling our talent back to us... :p

Well, noone is charging you for singing... only for listening...

[iJed]

Unfair?

WTF?

UNFAIR?

i won't even expand on the statement. the government...deciding what is UNFAIR? not...unjust...not...illegal...but..unFAIR?

If enough people are complaining to the government then the government has an obligation to look into it. It seems that in this case that the people DO want our government to decide what is unfair. This is of course just as it should be since government should exist solely as a representative of the people of the country and therefore should be doing their general bidding. Government should not be doing whatever corporations tell it too. If corporate executives want to change things then they have a vote just like everyone else.

[ssamani]

Well, now that's really way OT, but anyway, you can't tell it often enough: the EU is not a toothless body. In the case of Germany, more than half of the laws that pass the German Parliament are directives from Brussels. That means, once the 'toothless Body' has agreed on and passed a new law, EU national Parliaments are given a certain period of time * to make them national law *. There is no place for 'but' or 'wait a minute's, no changes and no arguing. It's fair to assume that in GB European Laws hold the same percentage as in Germany(more or less, I don't know how busy the british Parliament is). BTW, Batman on the Buckingham Palace was really cool ;-)

Aah, but that's just it. The EU Commission drafts the law and the EU parliament approves it, suggests modifications, rejects it but the parliament has very limited powers to draft legislation. That is why it is toothless.

Also due to the history of the EU as a free trade organisation, rather than a political body, a lot of the trading and financial decisions lie with the Commission, effectively the EU's civil service, overseen by ministers from member states. So basically if member state governments who have been elected largely on politics within their own states, push through tax harmonisation, there will be "Taxation without proper representation". If this happens, Europeans will rise up like the Boston Tea Party. Hopefully.

And I'm a Lib Dem, the most pro-European party in the UK. Anyway, I think we're a little off topic now...

Sanj

[visor]

So Apple adjusts it's prices today and tomorrow the euro gains strength compared to the pound or vice versa. Do they adjust prices tomorrow. And as far a being a free trade zone I don't really think that makes much sense - when vacationing there our US dollar went a lot further in Greece which uses the euro than in the UK. If Apple needs to make music cost the same why don't the grocery stores need to make bread cost the same. I know it's a lot more complicated than that - but that's my point. It is complicated so how do you solve it if you are Apple?

It's pretty easy, you hedge your money at the market, you don't get the spot value of course, but considerably less. As I see it now, UK songs are about 10% more expensive - that's about a rate you can get hedgings for. I guess 10% is just the price the British pay to have their queen on the cash.

[isaacc7]

If enough people are complaining to the government then the government has an obligation to look into it. It seems that in this case that the people DO want our government to decide what is unfair. This is of course just as it should be since government should exist solely as a representative of the people of the country and therefore should be doing their general bidding. Government should not be doing whatever corporations tell it too. If corporate executives want to change things then they have a vote just like everyone else.

Err, corperations do whatever WE tell them to do. If people think that a price is "unfair", they don't buy it. If enough people buy it at that price, then it just means that it's worth it to those people. The government trying to decide what a "fair" price is quite a bit less efficient and quite a bit more kludgy than consumers telling companies what the price should be. Really, who is being taken advantage of here? It's a song for pete's sake, let people make whatever money they can at it...

Isaac

[Catt]

I wonder if Apple could consider just pulling the plug in the UK.

I would if the legal expense starts to make a sizable dent in the profit margin.

I imagine the UK market for Apple is one of the biggest outside of the USA and (maybe?) Germany. It wouldn't make financial sense to do so unless things got ridiculous, which they won't.

[-hh]

I think the first thing to take into account is exchange rate variation, we in the Uk don't use the Euro so Apple needs to establish a long term average rate at which it feels the exchange rate will stay...

And the "second" thing that needs to be taken into account is that the UK has a shorter total duration of protection of a work under Copyright Law than the EU or USA. What this simplisticfally translates into is fewer years in which to return a profitable revenue stream. An analogy that Joe Consumer can understand is that the monthly payment is higher on a 4-year car loan than on a 5-year car loan.


-hh

[iJed]

Err, corperations do whatever WE tell them to do. If people think that a price is "unfair", they don't buy it. If enough people buy it at that price, then it just means that it's worth it to those people. The government trying to decide what a "fair" price is quite a bit less efficient and quite a bit more kludgy than consumers telling companies what the price should be. Really, who is being taken advantage of here? It's a song for pete's sake, let people make whatever money they can at it...

Isaac

This is how monopolies or pricing cartels come to be. Legislation is required to prevent these things from happening. What the music industry (and possibly Apple?) are doing is maintaining a regional monopoly in the UK to keep prices artificially high. Movie companies are even more guilty of this where they actively prevent people from playing DVDs, sold in other countries, from working in DVD players throughout the world. I, and I'm pretty sure most other people, cannot see any benefit whatsoever in this policy other than overcharging in some regions. Exactly the same goes for things like PlayStation and Nintendo games. Not exactly very pro-globalisation of these companies is it?

Anyway, if enough people are complaining about something being overpriced then there is a very good chance that it is. Government exists to serve the population of the country and, yes, to make things a fair as reasonably possible. This means that they tax on earnings and by percentage, offer free education, health care, environmental policy, social security, etc. Are all these things not based on what is fair? Without most of these things a country would be a pretty ****** place to live.

[fawlty]

Pehaps it could be justified as a 20% Beatles levy?

[billyboy]

I emigrated from the UK yesterday and reading stuff like this i can see why I am so relieved to have left the dismal shores behind. Normally I agree that Consumers need protecting, but in this instance, this is an example of how some Brits cannot stand anyone doing well.

Apple is a US company and they are showing the Brits (and the Europeans )how to do a job properly. That must hurt some. Also, 79p is a pretty generous price compared to what else is on offer, and that does not even accout for the fact that you cant compare like for like as iTMS software is streets ahead of the rest. But still the British consumer rep isnt satisfied. No. Some champion without a cause looks across the water to countries the British consumer basically cant abide and say, oh look at those Frenchies, they have something that seems cheaper than what we have got. Oh no, we'll use the Euro laws we cant abide to see if we cant get some more off the savings Apple have plonked on our laps.

The Consumer Association going after this one is going to upset either 60 million brits or 300 m.


If the Consumer Assoc discovers that the 79p problem lies at the door of Apple for unfair market differentiation, then they should butt out for the sake of our French and German neighbours !!! ie Apple could well be offering UK music at a fair price but subsidising mainland Europe to encourage unenlightened French and German consumers to give itms a go. If the Consumer Association did kick up a big stink about UK prices then Apple shouild bring Europe into line with the currently rerasonable price in rip off Britain. The market in mainland Europe would then decide about iTMS, and probably clamour for a return to their lower prices, and Apple say, we will if you get the laws changed !


If the Consumer Association determine that Apple are profiteering in the UK as they set the download market alight, then Apple will have to rethink their UK strategy to maintain a high volume of sales to more enlightened consumers. If that "Euro friendly price" is too low for Apple in the UK, then adios Apple from the UK. 3 cheers to the Consumers Association for booting out Apple and stunting a massive industry in the making with lots of spin offs for UK companies and small businesses capable of filling iTunes niches.


If the problem is that only a French credit card will get you a cheaper French iTMS track, then get the Consumer Association to talk to the French banks about their policy about dishing out credit cards to Brits.

Basically, why dont the CA just shut up on this one and tilt at another windmill.

[fatfish]

3 points here:

1. If this is the price of remaining British and not European, then I'll gladly pay it.

2. If the price is too much or unfair let the consumer, not those do gooders, tell Apple, by not buying the product.

3. I was a builder, people worked for me self employed and they took home between £ 300 & £ 1000 per week depending on how much work they did.

Do gooders came along and said I had to employ these people cards in, because they were protecting the workers rights.

So I paid £ 400 a week and overtime if they wanted it, those that would work well left because they were loosing out, and I was left with those that only did about £ 200 a week worth of work. Pretty soon I closed the firm down. Now who was the winner here.

The point is if Apple are forced to lower prices their only option might be to remove the service from the UK, once again to who's benefit will these do gooders have poked their noses in for.

[u07ch]

You cant be an apple appologist on this; the fact is very simple apple is exploiting the common market by being based in luxembourg. The VAT (sales tax) is much lower in luxembourg; because of the common market and the free movement of services apple can sell from a single place in europe and not have to worry about differing legal requirements.

Having taken advantage of the best bit of the european union they then ignore the simple fact that consumers and industry are legally able to buy goods and services from anywhere in europe without barriers (and the setting up of barriers breaks european law) - imagine apple refusing the good people of oregon from using iTMS and setting up an oregon specific store.

The issue of money is annoying but secondary for me; 79p is too expensive and apples suggestion that they are charging what the people of the UK are willing to pay for music shows that they are a monopolist acting to destroy the markte and should be taken down by the european commission (the big guns)

I gave up on iTunes Music Store as it is too expenslve, the music sounds terrible and apple can change the terms of my use of the music after i have bought it all of which makes CD's (bought from luxembourg) all the more appealing.

[u07ch]

3. I was a builder, people worked for me self employed and they took home between £ 300 & £ 1000 per week depending on how much work they did.

Do gooders came along and said I had to employ these people cards in, because they were protecting the workers rights.

So I paid £ 400 a week and overtime if they wanted it, those that would work well left because they were loosing out, and I was left with those that only did about £ 200 a week worth of work. Pretty soon I closed the firm down. Now who was the winner here.


Massively off topic defence of uk inland revenue rules for a moment

I cannot believe you are complaining about the CIS. It was brought in to stop people working who shouldn't be, it was to stop builders working on 3 jobs at once and paying tax on one of them, All of which puts books in schools and drugs in hospitals (and guns in iraq - doh.) and gives some pencil pushers some paperwork to fill in. Payroll software is more than capable of taking care of the legwork for you ...

The rest of it the EU bit - the working time laws on holiday are a good thing; making sure that everyone gets paid holiday (something they were supposed to have had since the 50's) - contractors and all; and the UK has never implemented the working hours regulations - well im still working 60 hours a week anyway. :confused:

[Golem]

Maybe its just so they can pay apple corp 20 p a song for next 100 years?

Afterall get sued for massive amounts does increase your cost of business in a particular country.

[Loge]

You cant be an apple appologist on this; the fact is very simple apple is exploiting the common market by being based in luxembourg. The VAT (sales tax) is much lower in luxembourg; because of the common market and the free movement of services apple can sell from a single place in europe and not have to worry about differing legal requirements.

Having taken advantage of the best bit of the european union they then ignore the simple fact that consumers and industry are legally able to buy goods and services from anywhere in europe without barriers (and the setting up of barriers breaks european law) - imagine apple refusing the good people of oregon from using iTMS and setting up an oregon specific store.

The issue of money is annoying but secondary for me; 79p is too expensive and apples suggestion that they are charging what the people of the UK are willing to pay for music shows that they are a monopolist acting to destroy the markte and should be taken down by the european commission (the big guns)

I gave up on iTunes Music Store as it is too expenslve, the music sounds terrible and apple can change the terms of my use of the music after i have bought it all of which makes CD's (bought from luxembourg) all the more appealing.

If you are selling online and don't have shipping issues, then you might as well be based where costs are lowest, that is just business common sense.

And the barriers, such as they are, relate to having to licence copyright material separately in each territory; this has not made it yet to the single market, hopefully it will do so soon. I'm sure Apple would prefer to negotiate these once for the whole of Europe.

And how are they a monopoly? There are other download stores in the UK, mostly charging more than 79p btw, and there are plenty of other ways of purchasing music if you don't wish to download.

[Stella]

What are you talking about ?!!!???!!! - the pricing for ITMS came WAY BEFORE any out of court settlement with Apple Corp.

IF, IF this where the case it would be pretty wrong of Apple Computers to penalies the UK consumers alone in order to fund any out of court settlement.

Maybe its just so they can pay apple corp 20 p a song for next 100 years?

Afterall get sued for massive amounts does increase your cost of business in a particular country.

[Loge]

I haven't seen any suggestion that the OFT or any authority is actually going to do anything. All that has happened is that the Consumers Association (an independent lobby group) has made a complaint. It's no different to any other group of people getting together and deciding they don't like something. The CA will often pick on minor issues that generate publicity, while ignoring much more difficult issues.

[GroundLoop]

If enough people are complaining to the government then the government has an obligation to look into it. It seems that in this case that the people DO want our government to decide what is unfair. This is of course just as it should be since government should exist solely as a representative of the people of the country and therefore should be doing their general bidding. Government should not be doing whatever corporations tell it too. If corporate executives want to change things then they have a vote just like everyone else.

Hrmmm. I wonder if I could use this strategy to force Trump to sell me prime property in NYC for fair market value of land in Montana. I could always use some cheap property.

Hickman

[fatfish]

Massively off topic defence of uk inland revenue rules for a moment

I cannot believe you are complaining about the CIS. It was brought in to stop people working who shouldn't be, it was to stop builders working on 3 jobs at once and paying tax on one of them, All of which puts books in schools and drugs in hospitals (and guns in iraq - doh.) and gives some pencil pushers some paperwork to fill in. Payroll software is more than capable of taking care of the legwork for you ...

The rest of it the EU bit - the working time laws on holiday are a good thing; making sure that everyone gets paid holiday (something they were supposed to have had since the 50's) - contractors and all; and the UK has never implemented the working hours regulations - well im still working 60 hours a week anyway. :confused:

Whilst off topic, the point was that these people who want to interfere in other peoples business in the name of peoples rights, seem to more often than not end up making things worse for the people they claim to be helping. I think most of us realise that these sort of people are generally trying to satisfy a fat salary funded by the tax payer.

But since we are off topic, I think you miss my point in regard of the inland revenue. I have no issue with the CIS scheme, I rather embrace it, my issue is that I'm not allowed to use it, on the basis that the people who worked for me had no rights to holiday pay and pension schemes etc, oh and maybe that the IR were missing out on employers NI.

Take the guy who earns £ 1000 pw because he puts in a few hours o/t and does the job quickly and efficiently. OK so he doesn't get paid for his 4 weeks holiday and he doesn't benefit from a pension scheme, but over the 48 weeks he works he earns £ 48K, how on earth is making him work for say £ 450 pw (with the same few hours of o/t) with holiday pay entitlement in his best interest (52 x 450 =23.4K)

And maybe when he retires he might get a little more benefit/pension, but I have some guys who have invested their extra earnings into houses which they let out, some have £ 1250 a month coming in not only when they retire, but now. Hardly comparable to the pension they'll receive because they go cards in.

And as for the little bit of employers NI the IR miss out on, this is clearly more than compensated by the additional tax raised on the additional (48K-23.4K) earnings.

[ebunton]

Not so. If that were the case, the complaint would be with the record labels, rather than with Apple.

Of course, a pan-European iTMS would be best for consumers, and easier for Apple. Typically, it's the record companies that won't allow this to happen.

I don't think it's the record labels (although I know it's so easy to point the finger at them for the silly decisions they are making these days).

There are royalties, governing the downloading of music, that vary from country to country.

In the music industry, there are essentially 2 types of royalties , namely for mechanical reproduction (which covers cds and other physical formats), and for broadcast/performance.

Funnily enough, downloading music is covered under broadcasting/perfomance.
These "download" royalties are percentages that vary depending on the end-use of the music product.

Broadcast/performance royalties are typically collected, not by the recording labels themselves (as with the mechanical reproduction royalties), but by performance royalties collection agencies. These agencies then redistribute the royalties to the owners of the rights to the recording in question (The owners are usually the record labels, and in some occasions, the artists. Artists typically transfer their rights to the recording to the record companies with which they are signed up)

There are typically specific collection agencies for each country. (I haven't heard of a pan-european collection agency and I highly doubt its existence).
These collection agencies are independent and have their own royalty-pricing structures.

Thus, for the UK, I suspect, among other things, that the "download" royalties for music is a higher than for France or Germany.

I strongly suspect that varying royalties in each country are the central drivers for the price difference between the UK and France and Germany.

However, I have thought of another driver, and that would be pricing of iTune's tracks. Depending on the existing price-structure of CDs in a country, the local recording companies would be against an iTune track being priced significantly lower, thus cannibalising CD sales. These record companies would then push for iTunes to price their tracks accordingly.

Of course that's a short-sighted fear since the CD, and DVD-A and SACD for that matter, are absolutely being cannibalised by online music sales anyway.

[Brize]

Funnily enough, downloading music is covered under broadcasting/perfomance.

Broadcast/performance royalties are typically collected, not by the recording labels themselves (as with the mechanical reproduction royalties), but by performance royalties collection agencies. These agencies then redistribute the royalties to the artists.

Interesting stuff. So, if music downloads are covered under broadcasting/performance and the royalties are collected by the agencies and redistributed to the artists, how do the record companies take their cut?

[ebunton]

Interesting stuff. So, if music downloads are covered under broadcasting/performance and the royalties are collected by the agencies and redistributed to the artists, how do the record companies take their cut?

The agencies collect the royalties and redistribute to the record labels or the owner of the rights to the recording (which could be the artists themselves if they kept the rights to their recording).

However, typically, when artists sign up to these record labels, they transfer their rights to any recordings made to the record labels.

[michaelb]

Pehaps it could be justified as a 20% Beatles levy?

That's actually a very valid comment.

I think we'll all be paying a little extra for our Apple goods as a result of Paul McCartney and Company's greedy grab for cash.

I'm just waiting for Adam & Eve to sue the Beatles for using the name of their fruit...

[GregA]

Having taken advantage of the best bit of the european union they then ignore the simple fact that consumers and industry are legally able to buy goods and services from anywhere in europe without barriers (and the setting up of barriers breaks european law) - imagine apple refusing the good people of oregon from using iTMS and setting up an oregon specific store.Interesting legal tangles there.

On the one hand, you're saying that consumers should be able to buy from any EU Apple store. On the other hand, if the law is that industry (as well as consumers) can buy goods from anywhere in the EU, then Apple could have simply cut a deal in one EU country with all the music distributors, and sold them anywhere in Europe.

As I see it, if the law stands for music then Apple has a LOT to gain (and so do consumers). If it does not apply, then Apple is doing the right thing already.

[PeterT]

As France, Germany and UK are in the EU then why cannot I purchase from say the French store? For example I like amongst other music Slim Dusty, and Aussie country singer who has made more than 100 albums. The UK store offers TWO, the French store over 20 Albums. I am sure the French are not that enthusiastic about Slim if they have ever heard of him.

I would think the Comsumers Association should bear this in mind as well...

The mix of music (i hate the use of the word 'Song, when does the London Philharmonic sing?) is weird. Nevertheless I think the Store is fab and will continue to add to my music collection.

Peter

[ph8te]

Apple has clearly stated that it is not in the music business to make money (you can take that as you want), rather they are using the iTMS as a way to get users to buy their iPods, therefore I would think that the fault for the pricing lies with either the record labels or the government itself.

[dekator]

Everything is more expensive in this country, price of cars, cost of fuel, house prices, cost of corned beef ... everything .... I've learned to live with it and got over it.


Not everything! Books are, for example, cheaper in the UK (because there is no VAT on them).
My advice: Get finally incorporated into the US and download for $ 0,99... booaaaaahhh, harrrrr, harrrr...
Seriously though, it's remarkable that it is exactly the UK that pays more. There are legislation and VAT differences between France and Germany too. Maybe it's the currency after all ?

[dekator]

Interesting legal tangles there.

On the one hand, you're saying that consumers should be able to buy from any EU Apple store. On the other hand, if the law is that industry (as well as consumers) can buy goods from anywhere in the EU, then Apple could have simply cut a deal in one EU country with all the music distributors, and sold them anywhere in Europe.

As I see it, if the law stands for music then Apple has a LOT to gain (and so do consumers). If it does not apply, then Apple is doing the right thing already.

It seems to apply alright. But bear in mind that there are different distributors in each country of the Eu. Still, living in Germany, I can buy music, books, and DVDs from any Amazon store. Whereever I buy, German VAT applies.
However, the actual distributors, license takers etc. try to circumvent this freedom. So, some distributors in Germany now force subtitles on you, if you want to watch a DVD in the original. They do that so that, if the film is e.g. orginally in English, nobody in the UK buys it. (Incidently, of course, that has massively reduced the popularity of such DVDs in Germany too. If your English (or whatever other language) is good enough for you to watch the movie in the original, subtitles are a quite irritating distraction and basically a pain in the b... So people buy in the UK or elsewhere :rolleyes: ).
Other such schemes have been in place. Thankfully they're back-firing.
Basically what has happened, I would guess, with the iTMS is that Apple had to cut deals with local distributors and those latter forced an agreement on Apple, not to allow non-residents to buy in the respective local stores.
So, you are bound to pay the respective exclusive licencee of one particular country. Funny, though, that Amazon and others don't have to...
Finally, then, it would seem that Apple just isn't as influential as e.g. Amazon.