The falling value of the pound and strength of the euro mean that an iTunes price imbalance no longer exists

R E L A T E D C O N T E N T

Apple scraps UK iTunes price cut

Currency markets have already done the job

Iain Thomson in San Francisco, vnunet.com 16 Jul 2008

Apple has dropped plans to cut the price of iTunes downloads in the UK, claiming that the rising euro has equalised the price paid across the EU.

The company said in January that it would cut the price paid by UK consumers for music tracks, which were then among the highest in the world.

The announcement followed the news that the EU was to investigate iTunes pricing in the UK under competition law.

The investigation came after UK users of iTunes complained of being overcharged. Tracks then cost 79p or 99p in the UK, compared to the equivalent of 67p and 87p in the rest of Europe.

"The Commission has sent a Statement of Objections to major record companies and Apple in relation to agreements between each record company and Apple that restrict music sales," said EU Competition Commissioner Neelie Kroes.

"Consumers can only buy music from the iTunes online store in their country of residence. Consumers are thus restricted in their choice of where to buy music, and consequently what music is available, and at what price.

"The Commission alleges in the Statement of Objections that these agreements violate the EC Treaty's rules prohibiting restrictive business practices (Article 81)."

But the falling value of the pound and strength of the euro mean that the price imbalance no longer exists.

"The announcement was that we would match the UK price to that of other lower priced European countries," an Apple spokesman told the BBC. "This is no longer necessary as exchange rates have effectively done it for us."

Nevertheless Apple might still face an investigation as the prices charged in Europe are much higher than in the rest of the world.

In the US and Canada tracks cost 99 cents, the equivalent of 49 pence. Apple has claimed in the past that this large imbalance is down to the higher cost of doing business in Europe.

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