So punishing consumers because they live in a different country is better?
That is eactly why it is a "very scary step in the wrong direction."
The EU is basically forcing buisinesses (in this case Apple) to regulate prices across multiple demographics without consideration to all of the other variables (taxes, licenses, strength of currency, etc) that vary based on the country in which they operate.
If these changes affect the business case of providing those goods or services in that country, and doing so will no longer be profitable, you can bet that you will see the number of choices available to the consumer diminish (or prices rise).
In this case, Apple had to perform an analysis to see how much of the EU marketshare was generated from the UK. Analyze if the price reduction (and losses) under the new UK price structure, could be eaten (ie offset by greater profits in the rest of the EU), and determine a course of action.
It looks like that analysis is very close to a breakeven point of tipping Apple's iTunes profitability into the red. This leads us to the statement that Apple will have to renegotiate with the content owners (record companies) to reduce their wholesale costs. If those negotiations fail, that will be less content to the UK and less choice for the consumer.
Very scary indeed.
Hickman
