The basic facts: Apple charges UK iTunes Music Store customer 79-pence, approximately 1.2 Euros (approximately $1.40 US) for a single song. French and German customers are charged only .99 Euros—20-percent less. A similar song on the US iTunes Music Store is only 99-cents.
Why the huge disparity in pricing?
The Consumer’s Association has called on the United Kingdom’s Office of Fair Trading to investigate Apple because the company appears to be practicing an anticompetitive and discriminatory pricing structure.
The CA says Apple is breaking EU law because prices are different in the UK than elsewhere in Europe or the United States. Apple reported replied to the charges saying that the economic model in each country is different and iTunes Music Store costs are different.
iTunes Music Store users in the UK have complained about pricing since the store first opened this year. iTMS is expected to open for the rest of Europe later this year.
One of the basic principles of marketing allows companies to charge what the market will bear. Obviously, products cannot be expected to be priced exactly the same throughout all countries in Europe; costs of distribution vary.
In the case of music, Europe is long known as a licensing quagmire, resulting in a cost differential in each country.
CDs don’t cost the same in the US as the UK. Even French and German pricing for CDs is different than UK or eastern European countries.
Still, UK iTunes Music Store customers may gain sufficient leverage to force Apple to a more uniform pricing policy.
It’s interesting to note that the “scandal” started by the Consumer’s Association of UK demands that pricing for UK music should be the same as in France and Germany and that Apple’s higher UK prices go against the principles of the single market formed by the European Union.
Britain (UK) is a member of the European Union (reluctantly) but doesn’t use the Euro as currency.
What do you think? Is this much ado about not much? I tend to think so. Pricing changes based on market conditions, though. If enough users raise enough noise, Apple would be forced to respond. What price is fair for a single? An album?
We recently ran an online poll of readers asking about iPod, iTunes Music Store, and what percentage of “legal” music is on your iPod or iTunes.
How many songs are on your iPod, legal or not legal? All you have to do is Click Here.
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