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ITunes Overcharging in the UK 77

Posted by michael from the rip-mix-burned dept.
KennyMillar writes "The BBC is reporting that the OFT (Office of Fair Trading) has ruled that Apple is overcharging for iTunes downloads in the UK. They have referred the case to the European Commission for a ruling. One important note is that UK iTunes customers cannot buy from the French or German iTunes Stores, and this goes against European Freedom of Trade rules. A spokesman from OD2 agreed that people in the UK should not be charged more than customers in the Eurozone. I've emailed Apple asking for 20% refund on all my downloads, but I won't hold my breath!"
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ITunes Overcharging in the UK More

ITunes Overcharging in the UK

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  • Consumer Globalism (Score:5, Insightful)

    by crow ( 16139 ) on Tuesday December 07, 2004 @01:52PM (#11021397) Homepage Journal
    This is a case of the other side of the coin of globalism. Big companies like to be able to move their operations around wherever they want to minimize expenses, but consumers also want to be able to shop wherever they want to minimize prices. The infrastructure that supports one also supports the other. We need to keep vigilant to make sure the laws equally support both.

    Of course, in this case, Apple is probably just passing on the policies set by the recording companies in their contracts. If my guess is right, then hopefully they can use this ruling to get more equitable terms in their contracts.
    • Of course, in this case, Apple is probably just passing on the policies set by the recording companies in their contracts. If my guess is right, then hopefully they can use this ruling to get more equitable terms in their contracts.

      I'm sure its the record companies that have dictated the pricing structure, but with exange rates, even if apple changed the price so it was more in line with the Euro using countries, the value of the currency could change again.

      I guess you could do it dynamicaly, but $0.83-

      • Tell can charge exactly .99 euro in all or europe and .99 cents in America. Of course that means the europeans are being overcharged, but that doesn't violate euro policy as its still consistant throughout Europe.

  • DVD parallel? (Score:2, Interesting)

    by Anonymous Coward

    Wouldn't the same principles forbid use of CSS to charge different prices for DVDs in different regions? Is this why DVD vendors in the UK are free to sell "region free" DVD players without any hassle?

    • Re:DVD parallel? (Score:5, Informative)

      by Bulln-Bulln ( 659072 ) <bulln-bulln@netscape.net> on Tuesday December 07, 2004 @03:50PM (#11023367)
      Wouldn't the same principles forbid use of CSS to charge different prices for DVDs in different regions?

      No, because there's only a single DVD region for the EU (and even other countries outside the EU, like Switzerland).
      The iTunes case is about different prices inside the EU. A German guy is free to buy a car in Spain. A UK resident can't buy a song from the French iTMS. That's likely to be illegal.

  • The European Union is Like a Schizophrenic Lawyer (Score:5, Interesting)

    by 99BottlesOfBeerInMyF ( 813746 ) on Tuesday December 07, 2004 @02:06PM (#11021610)

    Seriously, if the European Union would get off it's butt and actually make the various European versions of the RIAA offer the same licensing across all of Europe, like they have already ordered them too, then this would not be an issue. Apple charges different prices because they are charged different prices. Now the UK has ruled that Apple is violating a EU law, but obeying it would break the law in any given member of the European Union. This is largely a matter of considering intellectual property to be a good or service, when sold by Apple, but not otherwise considered a good or service across the EU as a whole.

    Mostly this is just the UK pissing and moaning because they are getting ripped off more by their RIAA clone than other countries are and they want Apple to do something about it. Apple doesn't really care how much the songs cost, they just want them as cheap as possible. They don't even make any money on the issue, it is just a way to get people to buy computers and mp3 players.

    I'm sure this will result in the EU ordering each country to license IP across the EU under the same terms as locally, and in another 10 years most of the countries will actually get around to doing so. In the mean time, Apple will fight things out in the courts, stop selling in the UK, raise prices across all of the EU, or take a loss selling into the UK for the sake of good will. None of which seems like a good deal for anyone involved.

    • The problem still remains that apple are breaking the law, all of their problems could be more easily solved by having one music store for the whole of europe, offering all prices in euros, and letting the credit card companies deal with currency conversion, and then they just take whichever deal from IP providers, and host the service in that country. If the IP providers object, they can be easily taken to court, everybody's happy.

      • If the IP providers object, they can be easily taken to court, everybody's happy.

        If only it were that easy. There is no actual law that says IP providers have to offer the same price as IP providers in other EU countries. (There is an EU directive for each country to pass laws to that effect.) And a license to music is contingent upon your location under laws in most EU member states (Thanks to pressure from the U.S.). The problem is that the UK council is not seeing is that according to EU law, Apple

        • >This is further complicated by the fact that
          >although their end user license says you can
          >only buy from the country in which you reside,

          And this is the problem, not really that one charge different prices in different countries (or even within a country, happens for almost anything). Someone in UK is allowed to buy from France without there being allowed to be any restrictions or problems that does not exist also from someone in France. This is clearly not the case here.

          • Someone in UK is allowed to buy from France without there being allowed to be any restrictions or problems that does not exist also from someone in France.

            Try thinking of it in terms of something else that is regulated by law individually in each country. For example, Suppose a company was selling hovercraft operating correspondence classes, including a hovercraft operators permit. In each country the end result for the user is the same, they know how to operate a hovercraft and have permission to do s

            • It all comes down to were it is sold I presume. The thing is, you can't decide if someone can buy based on were they LIVE. This is what they are doing. If you go to the french site and they notice you seem to live in England, you would not be allowed to buy, THAT is what they are not allowed to do. The fact that one can buy directly in one country while never going there over then net is possibly complicating it but not really a problem. One have been able to do it before the internet by sending a normal ma
      • Comment removed based on user account deletion
    • This has nothing to do with intelectual property. It's like if they had a shop in france and charged english people who came into it 20% more due to their accent.

      • This has nothing to do with intelectual property. It's like if they had a shop in france and charged english people who came into it 20% more due to their accent.

        Yup, just like that. Well, except if they had different shops for each country and were selling music online, and charged prices based upon your credit card's billing address.

        Do you really think this is a discrimination issue? Against the British?!? They are selling at different prices because they are selling different products. It costs a

        • I didnt say it was discrimination , i was giving a physical example. Why cant i buy from the french shop where apple pay the RIAA? I can buy french cds in france. Who are apple to come along and say whats what in the EU?

          • Re:The European Union is Like a Schizophrenic Lawy (Score:4, Insightful)

            by 99BottlesOfBeerInMyF ( 813746 ) on Tuesday December 07, 2004 @05:44PM (#11025129)

            Who are apple to come along and say whats what in the EU?

            Umm, Apple is just caught between conflicting laws. It's the EU and the UK who is saying what is what. Apple negotiated a price with the BPI, added their expenses, then picked a round number close to it. If the EU can't license music for the same price across all it's member countries, why should Apple be tasked with sorting it out? If you have to sell for the same price, fine charge Apple the same price, if not, fine don't complain when Apple sells different things for different prices. Guess what, the BPI won't sell music across it's borders at all, that is because it is illegal. Apple is just running a whole series of stores selling different products (different due to the fact that the laws on pricing and sales are differnt) in different countries. Consumers may see a song as being the same, but until the law reflects that fact, Apple can't be expected to pass laws and change it.

            • The thing is not that they charge different prices really, but that they won't allow someone from the UK to shop from France. Hence, the result is that they end up having to pay more. That in itself is not the problem, is it a result of it. If the ones supplying Apple won't allow it, then Apple simply can't make a deal with them.

              I can go and order a book from a French bookshop over the net, I then pay what someone in France would (possibly higher postage). The French shop can't say I must go to their Swedi

              • I can go and order a book from a French bookshop over the net, I then pay what someone in France would

                It's true, you can. But you can't order an e-book from a store in France. The reason is that a book is physical purchase that happens to have intellectual property already published on it. The other is a license to a copy of intellectual property which someone in France does not have the rights to sell you, since the right to publish it in your country is owned by a different party. Get it?

                • You miss the point, it doesn't matter were you live in Europe, you are allowed to buy from anywere. The fact that someone wants to not allow it is the problem. You are not allowed to dissalow people from anpother EU country to buy it. IN what way you sell it is irrelevant.
            • So why do they not take a more 'global' approach and license the music from the cheapest source in the EU and sell it EU wide? That way they would be putting the various national licensing organisations in competition with each other. As has already been noted, it is possible to buy CDs from any other EU country, so it should be possible with online music downloads. The only difference in price (paid by the consumer) should be accounted for by the varying VAT rates.

              • it is possible to buy CDs from any other EU country, so it should be possible with online music downloads.

                When you buy a CD, you buy a CD. When you buy an mp3, or AAC file, you are buying a license to make a copy (Actually several copies) for your own use, in your country. One is a purchase of a physical object, one is a license to intellectual property. Just because intellectual property laws are stupid, don't blame Apple. They are just stuck between two conflicting laws.

  • will the price be based in euros or pounds? (Score:3, Interesting)

    by jxyama ( 821091 ) on Tuesday December 07, 2004 @02:08PM (#11021662)
    one thing is that just like other merchants, iTMS song/album prices end in 0.X9. $0.99 in the U.S./canada, 0.79 pounds in U.K., 0.99 euros...

    at this moment, the easiest thing to do is to lower the british price to 0.69 pounds, which is consistent with the exchange rate. it may fluctuate - how much of a fluctuation is considered ok? or should apple open up iTMS for the entire european continent and accept credit cards from everywhere? how often will they have to change the prices with the exchange rate? will apple keep 0.99 euros and change the british price or keep 0.69 pounds and change the euro price?

    • wow -- if it's .99 dollars and .99 euros then apple might just be making money on iTunes in euro! at the very least, they bring in 33% more for each song.

      (though i don't know how much they have to pay in other costs so the profit may still be the same.)

    • Re:will the price be based in euros or pounds? (Score:4, Interesting)

      by dschuetz ( 10924 ) <david@@@dasnet...org> on Tuesday December 07, 2004 @02:33PM (#11021986)
      will apple keep 0.99 euros and change the british price or keep 0.69 pounds and change the euro price?

      Apple's an American company. They should just set the price at $0.99 and let everyone do the math at checkout.

      99 US cents = 0.74 Euro cent = 51 pence
      99 Euro cent = $1.33 = 68 pence
      79 pence = $1.53 = 1.14 Euro

      So going with UK units, the US and Europe get screwed. With Euro pricing, the US gets screwed, while the UK gets a drop in price. Pricing based on the dollar, the US stays the same, and both Europe and the UK get a bargain. Sounds like a win/win for everyone!

      I mean, really, think of the slogan:
      "One world. One price. One dollar."
      (or is that too....er...militaristic?)

      • Apple's an American company. They should just set the price at $0.99 and let everyone do the math at checkout.

        It is not a matter of exchange rates. Apple has to license the songs from a different organization, for a different price, in each country. All they can do to be compliant is either charge an average across the EU, funneling money from one EU country's version of the RIAA to another's version of the RIAA, or set the price as the highest price in any EU country and charge more money in some coun

        • Apple has to license the songs from a different organization, for a different price, in each country.

          Yeah, I sorta deliberately glossed over that.

          On the other hand, if they only sell *from the US server*, then do they really need to license in each country?

          A further modification of my slogan:
          "One world. One song. One price."

          After all, it's the same bloody song no matter where you buy it, screw those other countries' licensing schemes. The artist will still get paid, right, whether the purchase comes
          • On the other hand, if they only sell *from the US server*, then do they really need to license in each country?

            Yes.

            The artist will still get paid, right, whether the purchase comes from the US store or the UK store. Right?

            No. The copyright holders might be different in different countries. It's not unusual to sell one's rights in something to different people domestically and abroad. Plus, copyright isn't (and shouldn't be) standard worldwide.

            You should be allowed to buy from wherever the hell you p
            • The problem being that this can undercut domestic policies. E.g. if you can buy from a country with no copyright law, then the copyright law in your own country becomes pretty worthless.

              Agreed - and I don't have any easy answer for that. However, I don't think that anyone would say that you should surrender your CDs when you travel overseas (and especially not when you *move* overseas). So why should a purchase from a foreign country be any different? So long as what you purchase is legal where you pur
              • The way we currently do it in the US is to classify importation as a subset of distribution, which is an exclusive right of the US copyright holder.

                Since the first sale doctrine only applies to copies lawfully made under US law, foreign imports generally don't qualify. (reimports would, though)

                The only ones that are okay fall under the 602 exemption, both halves of which must be satisfied. Thus, imports that don't fall under 109 are only okay if they are 1) authorized by the US rights holder, or 2) both f
      • As a matter of European law, all prices quoted must be inclusive of VAT (sales tax). The US price of 99c is, I believe, exclusive of applicable sales taxes, or sales tax does not apply.

        Plus, credit card companies do not use the mid-rate when converting currency - you always lose a few pence each way.

  • Uk doesn't use the Euro, why again??? (Score:3, Interesting)

    by acomj ( 20611 ) on Tuesday December 07, 2004 @02:40PM (#11022076) Homepage
    When I was in England in the late 90's there was debate about whether or not the UK should use the Euro. They (the english decided against it.)

    The Euro has increased a lot in value relative to other currencies this year so it would make sense that it seems like overcharging. Much like the dollar vs. the canadian dollar. There is no equity in currency values.
    The Ecomists big mac index [economist.com] shows that big macs cost different ammounts in different places, even adjusted for currency differences. Why wouldn't music?

    Is apple expected to change the cost of songs every couple months due to currency valuations?

    • Re:Uk doesn't use the Euro, why again??? (Score:5, Informative)

      by guet ( 525509 ) on Tuesday December 07, 2004 @04:23PM (#11023864)
      England is not the UK. In fact the labour governement is still 'considering' the Euro, but given that Gordon Brown (not English), likely the next Prime Minister, is hostile to it a switch doesn't look likely in the short term. Eventually I imagine they'll have to switch over to the Euro - it's certainly quite handy for frequent travellers within the EU and for businesses.

      The prices have never been equivalent to the exchange rates (not even close). The UK store has consistently been more expensive. This is probably because the record companies think they can get away with it (as they do with CDs), not because of exchange rate difficulties.

      It's really a bit of a farce that they're forced to have different stores in different countries anyway. Apple would probably prefer to just have one store and let the user change their language/music preferences, but the music companies have too much to lose from allowing a global marketplace in their IP, so they're trying to hold out as long as possible.

      As with regional DVD encoding it'll probably die a quiet death somewhere between 2010 and 2020.

  • Your all missing the point... (Score:3, Insightful)

    by pnjman ( 640553 ) on Tuesday December 07, 2004 @02:55PM (#11022393)
    It's not the fact that the prices differ, it the fact that a customer with a credit card in one EU country can't buy songs from the itunes store of a diffirent country. EU law says that EU citizens are free to buy goods or services from anywhere in the EU without any any rescrictions. To be fair it's not apples fault it the record companies who won't allow the tracks to be distributed under the same liecence through out the EU. Cases like this will push through laws requiring the harmonising of EU IP laws.

  • Refund? Why? (Score:3, Insightful)

    by dn15 ( 735502 ) on Tuesday December 07, 2004 @03:17PM (#11022799)
    I've emailed Apple asking for 20% refund on all my downloads, but I won't hold my breath!
    With all due respect, why should they give you a 20% refund? They didn't trick you. They didn't lie about what the songs cost. They simply charged a price and you chose to pay it

    Now certainly you have a right to complain and say it's unfair that they charge difference prices in different countries. But I certainly don't think there's a valid argument for getting a even a partial refund.

    • Re:Refund? Why? (Score:3, Informative)

      by DjReagan ( 143826 )
      The problem is that Apple does not give you a choice about which country you use. If you're registered in the UK, then you can only purchase songs from the UK iTunes site. This is what is against EU regulations.
      • The problem is that Apple does not give you a choice about which country you use. If you're registered in the UK, then you can only purchase songs from the UK iTunes site. This is what is against EU regulations.
        No, apple didn't give you the choice of buying from another EU country which is illegal in the EU, but it did give you the choice of buying the music or not buying the music. And the author of the article agreed to buy the music for the agreed price and hence has to pay for it at that price. The
        • It's not about his entitlement to the money, but rather Apple's disentitlement, as their business practices obtaining it were (presumably) in violation of the law. Allowing someone to retain the profits of violating the law counterproductively preserves the incentive to violate the law.

          However I know essentially nothing of the relevant EU business law, so this is theoretical.

          -

          • Re: (Score:3, Interesting)

            by account_deleted ( 4530225 )
            Comment removed based on user account deletion
            • What tripe, the copyright issue is not connected to the EU selling issue. Really how hard is this to figure out.

              You cannot refuse to sell to someone in another member state, how you arrange your suppliers is your issue, if you cannot meet that law because your suppliers cannot agree then you don't sell their product. It doesn't matter if its music or beans the same rules apply, the whole idea of IP rights being involved is rubbish, thats apple's problem.
        • No company can set shop in different EU countries and then dictate in which one you can buy.

          It is that simple.

          • No company can set shop in different EU countries and then dictate in which one you can buy.

            I seriously doubt Apple made a separate UK store just because they felt like it. Why would they have two European stores if there wasn't some other reason?

            I think dictating which store you can use is a result of copyright/licensing issues. Making you buy from one store or another is probably legally valid in that context. Bear in mind that Apple would probably be violating licensing terms with the record compan

  • Inacurate title (Score:3, Informative)

    by beelsebob ( 529313 ) on Tuesday December 07, 2004 @05:05PM (#11024501)
    The problem is not that Apple charges more in the UK than in the EU - they are absolutely allowed to do that. What they are not allowed to do is ban people in the UK from buying things from the various EU stores (and as a by product, that means that we in the UK may be able to get cheaper songs from the EU store).

    Bob

    • that means that we in the UK may be able to get cheaper songs from the EU store

      Except that doing so is not legal, according to UK law since only the UK recording industry has rights to sell songs in the UK. Actually the issue is the same price, since the EU law states that you have to offer the same price to all EU members. They need to fix their intellectual property laws.

      • Re:Inacurate title (Score:4, Informative)

        by beelsebob ( 529313 ) on Tuesday December 07, 2004 @05:57PM (#11025345)
        No, the issue is not to do with price. If UK law says only the BPI is allowed to sell songs in the UK, then UK law goes against EU law and needs to be updated. Apple are quite at liberty to sell songs at £5,000,000 each in the UK and 1 cent in the EU, but they MUST allow us to buy songs from the EU stores and run the risk of no one buying the £5,000,000 tracks.

        The EU law does not say that you must offer it at the same price to all EU members, it says that you must allow all EU members to buy from any place they like.

        Bob
      • since only the UK recording industry has rights to sell songs in the UK

        but they are not selling the song in the UK, they are selling it in france, or germany etc. it just so happens that we in the UK could access it (as we can order a cd from the german amazon).

        for me it's simple. I can mail order things from overseas, including music. so why can I not buy music from overseas itunes stores? I can see that the record companies would find this worrying, but tough, that's the law and they need to deal with
  • to be honest I think the UK should be screwed for every cent they have for not joining the euro "oh, we'll lose our sovereignty!". look guys you lost it years ago - you're just the lapdog of the USA and in fact it's for the US's best interest to keep you out of the euro. Don't want the euro to be too powerful or all of that oil will be paid with them instead of the USD.

    Anyway, maybe this might backfire and the EU will force the European equivalents of the RIAA to standardise over the whole EU. Who knows?

    ci

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