Company: Apple Computers
Apple iTunes 'overcharging in UK'
|3rd Dec 2004
||Questionable Business Practice
|The Office of Fair Trading (OFT) has referred Apple's iTunes service to the European Commission on grounds that it overcharges UK customers.
The move follows a complaint from Which? that iTunes charges UK users 20% more than those in France and Germany.
Which?, formerly the Consumer Association, also complained that the UK customers were barred from logging on to the French and German sites.
The OFT is asking the European Commission to rule on the matter. It said the Commission was better placed to judge on the matter because "Apple iTunes operates in more than three European Union member states".
Phil Evans, principal policy adviser at Which?, said it was a freedom of trade issue. "The online music market is a huge growth area; the Single Market should work the same in this market as in others," he said.
"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." No-one at Apple was immediately available for comment.
Whereas iTunes customers in the UK have to pay 79p to download a song, those in Germany and France are only charged 99 cents or 68p.
Back in September Apple defended the price differential, saying that "the underlying economic model in each country has an impact on how we price our track downloads".
"That's not unusual - look at the price of CDs in the US versus the UK," an Apple spokesman said. "We believe the real comparison to be made is with the price of other track downloads in the UK."
Ed Averdieck, European sales and marketing director for OD2, which runs music download sites for everyone from HMV to Wanadoo, Tiscali and MTV, said there was no reason why firms should charge UK customers anymore than those on the continent.
"Our retailers charge everyone in Europe the same price, and we believe there should be such a unified pricing policy." he said. "If you look at MSN, for example, it charges 99 cents in the eurozone and 69p in the UK [the same amount].
"We believe this is right and that there is no reason why UK consumers should have to pay any more."