The iTunes music store, which has been running in the US since
April 2003, opened for business in the UK, France and Germany in
June this year. The three stores offer single downloads for a price
of €0.99 in France and Germany, and £0.79 (€1.20) in the UK.
In October, a broader European version of the store was opened,
extending the service to music fans in Austria, Belgium, Finland,
Greece, Italy, Luxembourg, Netherlands, Portugal and Spain at the
price of €0.99 per song.
The issue came to the attention of the OFT in September when
campaign group Which? (formerly known as the Consumers'
Association) complained that the service charges UK customers 20%
more than its French and German customers, and bars customers in
the UK from logging on to the French and German sites to get a
cheaper deal.
The OFT has now referred the matter to the European Commission,
describing it as "better placed to consider this matter, in
particular as Apple iTunes operates in more than three EC Member
States."
In addition, said the OFT, the 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 on-line
exploitation of music is licensed across Europe.
The Commission is already investigating a potential breach of
competition law caused by an agreement among 16 EU
royalty-collection societies that creates a "one-stop shop" music
licence.
Which? welcomed the referral.
"UK consumers are getting a raw deal from Apple," said Phil Evans,
principal policy adviser, Which?, "The on-line 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," he added.
Apple has made no comment as yet, although at the time of the
original complaint by Which?, the company explained:
"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. We
believe the real comparison to be made is with the price of other
track downloads in the UK."
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