UK Consumer Group Smacks iTunes Music Store for Unfair Pricing

[Jason Dunn]

<div class='os_post_top_link'><a href='http://news.com.com/English+beat%3A+Consumer+group+raps+iTunes+pricing/2100-1027_3-5367762.html?tag=nefd.top' target='_blank'>http://news.com.com/English+beat%3A+Consumer+group+raps+iTunes+pricing/2100-1027_3-5367762.html?tag=nefd.top</a><br /><br /></div><i>"A consumers group has asked the United Kingdom's Office of Fair Trading to investigate Apple Computer, claiming the company's iTunes song shop is overcharging British users. The London-based Consumers' Association has a beef with Apple because of the company's pricing structure in Europe. To download one track costs a U.K. consumer 79 pence ($1.40). In France and Germany, it's 99 eurocents ($1.20). This means that a shopper in the United Kingdom pays more for every track."</i><br /><br />An interesting battle brewing there - I wonder what the results will be? Does Apple's explanation in the article hold water, or are they price-gouging in markets that will support higher prices?

[Mojo Jojo]

I think I need someone to explain to me this whole European-UK-Euro deal to me. I mean they want the same Euro rates for products but they don't want to switch to the Euro? Yet if the Euro goes down they want their currency to maintain its value?

Okay... thats one thing I can't get my mind around, second thing is... what happened to market economy? If Apple wishes to ask a higher price, they are not forcing anyone to come to their store. While the name is iTunes are the French, Germany, and UK label deals all equal in pricing? What if Apple charges more because it COSTS more to do business in the UK with their record labels?

This really strikes me as a cake and eat it too complaint.

That or we really need to get our act in gear over hear in the U.S. as I want gas prices the same as what New Jersey pays, I also want home buidling costs like they have in Alabama...

[Felix Torres]

Think of this as the wages of hype. :-)

Apple presents itself as a *dominant* player in music downloads.
Well, dominant players get scrutinized for all sorts of stuff that competitors do all the time and get a free pass on (just ask Microsoft :twisted: ).
So, Apple is getting to see all the disadvantages of having a monopoly without actually getting to have a monopoly...

In the UK situation what happens is the the UK has not signed up for the Euro *nor* have they definitely rejected it. Rather it is on the agenda as a "someday soon" transition to come but only when certain predefined criteria are met. And it's a very political issue. What the agreement is intended to do is ensure that British customers don't get gouged in order to press the case for Euro conversion. Which realistically would have the *opposite* effect, brits being almost as contrarian as their transatlantic cousins. The issue is really a 50-50 split even today. So nobody on either side of the channel wants to see profiteering upset the, ahem, apple cart. ;-)

As for Apple's explanation, they're really quite blunt; they're just going with their usual "all the market will bear" pricing.

And since Britain, unlike France and Germany, doesn't much subsidize its music industries, CD prices are higher than in the subsidized "defense of our great culture" continent. Which Apple takes as a sign that an extra 30% markup is in order.

Apple's mistake is not being market-savvy enough to understand that open market forces are *not* in effect in the dirigiste countries.

So essentially they're victims of their own hype and euro-naivete.
Expect to see more of these problems and companies other than Microsoft and Boeing to be affected in the emerging transatlantic economic war.

Just because europeans have "capitalist" economies, doesn't meant they're Capitalists; there are currently four brands of capitalism on planet Earth and the next big war will be fought over which of the four is best.

Welcome to the 21st century. :roll: