Fans score with Apple deal
2008-01-10 07:31
Brussels - British music fans will
pay less for downloads from Apple's online iTunes store after
Apple Chief Executive Steve Jobs reached a deal with the
European Commission.
British consumers have been angry at paying nearly 10%
more than others in Europe for iTunes content to play on
Apple's hugely popular iPods.
Apple will cut prices within six months as "the direct
result of talks that have taken place between Steve Jobs and
(European Competition Commissioner) Neelie Kroes", Commission
spokesperson Jonathan Todd said on Wednesday.
The deal, which saw the Commission dropping charges against
Apple, resolves one of several irritants in the relationship
between consumers, Apple and record companies.
Apple said it has had to pay some record companies more for
content in Britain and warned it will "reconsider its continuing
relationship" with labels that do not lower wholesale prices in
Britain to the pan-European level within six months.
"This is likely to further damage Apple's already fractious
relationship with the major labels....," said Jonathan Arber, an
analyst at media consultancy Ovum.
Music companies are quickly moving towards dropping copy
protection, known as digital rights management, in part to free
themselves from the increasing power of iTunes, he said.
iPods don't dominate
Consumers have also complained about the failure of iTunes
downloads to play on anything except iPods. But Apple may
legally continue that practice, the Commission said.
"We are in favour of interoperability," said Commission
spokesperson Todd.
"But the bottom line is that Apple is not in a dominant
position on the market, and therefore the fact that they choose
not to ensure interoperability is not an antitrust violation".
The pricing problem addressed by the Commission arose
because customers can only buy music from national versions of
the iTunes store, as determined by their credit cards.
For example, a consumer in the UK must use a credit card
from a bank with an address in Britain.
In addition, the music must be cleared for sale in that
country under national copyright rules, meaning that not all
iTunes content is for sale in all countries. A video available
in France may be unavailable in Belgium, for example.
The Apple deal may foreshadow further Commission action
against such inconsistencies.
A basic EU treaty provision assures a single market.
"The Commission is very much in favour of solutions which
allow consumers to benefit from a truly single market for music
downloads," Kroes said in a statement.
The Commission said its investigation disposed of its
original concern that deals between the major record companies
and Apple accounted for the price differences.
In April 2007, the Commission said Apple had breached EU
rules by agreeing with Vivendi's Universal Music Group, Sony BMG
Music Entertainment, EMI Group and Warner Music Group to curtail
cross-border access to iTunes.