Glasgow’s Evening Times reports that iTunes has been accused of ripping off customers:
The Consumers’ Association said today that by charging 20% more in the UK than in France and Germany, Apple could be guilty of an “anti-competitive practice” in the single European market.
It wants the Office of Fair Trading to investigate why the firm charges 79p per song in the UK, but just 76p in France and Germany. It charges 55p in the US.
Consumers’ Association adviser Phil Evans said: “There appears to be considerable evidence iTunes distorts the basis of the single market.”
I’m pretty sure Apple operates with the same margins in the UK as it does elsewhere, and as a result the price of downloads is dictated not by Apple, but by the record labels. If that’s the case, shouldn’t the Consumers’ Association be pointing the finger at them?
In a statement, Apple says: “The underlying economic model in each country has an impact on how we price our track downloads. That’s not unusual – look at the price of CDs in the US versus the UK. We believe the real comparison to be made is with the price of other track downloads in the UK. We are extremely proud to launch the iTunes music store in the UK with by far the lowest price for track downloads, just 79p for every track.”
Incidentally, the rules of the new UK download chart state that any digital download with a wholesale price of less than 40p isn’t eligible for the chart. Assuming downloads are being bought by Apple at around 40p, add in the cost of music licensing, payment processing, tax and other overheads and you’re pretty close to 79p per track.