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UK music -10% on iTunes, EU case closed

ITunes music with 10% discount on the current price on the British store. Here is the answer that Apple d to eliminate the contrasting factors with the European commission that had put forward doubts about marketing practices according to which the costs differentiated between the various stores.

The decision to lower (within six months, from the current 79 cents to 74) the price of music on the iTunes Store UK eliminates the main contrast factor between the EU, on the one hand, Apple and the record companies on the other. The complaint that had attracted the attention of the Union and the request for explanations sent to the majors and Cupertino started from a consumer association in the United Kingdom. Under the rules of the common market that is not allowed to impose restrictions on the movement of goods (as is the case with iTunes which obliges to purchase in stores for each country), preventing customers from looking for more favorable prices in the various countries. In the specific case, while leaving in force the restriction on the purchase of music in the country of residence (or where you have the bank account), the price difference is reduced, which is actually the real "puntum dolens": the higher price than to other European markets. In short, buying in Great Britain and buying in France or Italy will cost the same price and therefore every objection falls, as Commissioner Neelie Kroes makes it clear: ?The European Commission – the Commissioner for Competition – welcomes the decision that allows you to create a real single market for music download ?.

During the investigation it was also clarified that the organization of the stores is not the result of an agreement between the record companies and Apple, even if the EU admits that based on the policies applied by the record companies, it may be difficult for Apple to create a single European iTunes market.

The statement, contained in some press releases that followed the agreement, suggests that, however, it was Apple who decided to organize the stores in a national key even if Cupertino in the past has denied that this was the case and that he would have preferred organize a single pan-European shop. The fact that music cost more in the United Kingdom than elsewhere, instead, is the result of the choices of the record companies themselves, as can be understood from a declaration by Cupertino issued by Thomson Financial News.

Other thorny issues could arise from this situation, this time between Apple and the record companies.

"Apple – says the California company – will reconsider relations with every record company that will not lower, within six months, the wholesale price of songs to the level of other markets". A rather bellicose statement that could be a prelude to some further contrast with the record companies with most of which the relationships are not already idyllic. For example, the majors could refuse to reduce the sale price of wholesale songs, arguing that it is up to Apple to open iTunes without discriminating the geographical origin of the customers, leaving them free to go elsewhere to look for music, and not to change their policy. of price applied to the British market.

A second problem could occur when the exchange rate changes. What will happen when the pound fluctuates upwards or downwards in relation to the Euro? If the spread becomes evident, will Apple still change prices in favor of UK citizens? The not entirely peregrine hypothesis, given that in 2004, for example, the differential between the Euro and the Pound was more favorable than today to the British currency so that the difference in price between the music sold on the UK and European iTunes it was 20% instead of 10% like today.

Finally, it remains to be seen what will happen in Norway and Denmark, always part of the Common Market but where, as in the United Kingdom, prices are higher than in the Euro area or in Sweden where they are (even if only by three cents) lower .

Be that as it may, Apple's step closes the case, at least in relation to the EU: "We no longer intend to pursue other actions," said Neelie Kroes.