One common policy Apple has introduced into its iTunes service is its 99c pricing where ever it had launched its service, apart from the UK. However, while the 99c price may look the same in the US, Europe and the US, the currency conversion varies quite a bit which means Apple is selling its music at different prices. For example, iTunes Canada 99c price works out at 83c US (~16% cheaper than US service), 57c in Euro (~36% cheaper than in European) and 43p in UK Pounds (~46% cheaper than in UK).
While the price of CDs also do vary from country to country, it is possible for a customer to choose where to purchase their music. However with iTunes, its service forces the customer to pay the price of their local country by pricing the music based on their IP address and their registration details.
While the pricing by location may work fine in the US and Canada, the European law allows the UK to get the same benefits of the single market along with other member states. As a result iTunes violates this since the UK service prevents customers from purchasing tunes from its European service to avail of the cheaper pricing in Euro. So far the British Office of Fair Trading has been accusing Apple of overcharging its UK customers as a result.
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Britain's Office of Fair Trading (OFT) is accusing Apple of overcharging British customers for its iTunes product, according to a UPS story that appeared in Forbes. It's also rumored that agencies in other countries are looking into Apple's pricing practices as well. The OFT was alerted to the overcharging scheme by Which? magazine, a UK version of consumer reporting. The story in Which? appeared September 15 and said that British customers were paying as much as 20% more than buyers of the popular Apple iTunes in Germany or France. Under European law UK consumers are supposed to enjoy the same benefits of the single market as other citizens of member states. However, the iTunes service is set up in a way that prevents UK consumers from taking advantage of the cheaper download service offered to the French and Germans. Read the full article here. |
While I can see why iTunes in Canada and the US may vary and the same with comparing the iTunes in Europe against the US, it does seem odd that iTunes in the UK costs more than the European price. Some may say that Apple had taken precautionary measures with its UK service in case the UK pound weakened against the Euro. However, it is not fully clear why did Apple not give the choice of paying in 99c (Euro) on its UK service, thus giving the option to pay the same as what other Europeans pay.
In a way, it does seem unfair that Apple does not allow one to purchase music from another country where the same song is sold cheaper. In fact, Some music shops that sell CDs such as CD-WOW also allow customers to purchase from their International stores as well as pay in a currency of their choice. The same can be said about many websites selling software.
On the other hand, it seems like Apple has decided to stick with a fixed price policy and not allow any exceptions. One likely reason I can see is to avoid customer complaints with questions like 'If I can purchase music cheaper from your store at ###, then why do you charge more if I pay for it here in my currency?". Another reason may be that Apple would prefer to avoid any losses by price matching or allowing consumers to purchase from its International stores.
Feel free to discuss and find out more about iTunes on our Music Downloads, P2P & Legal Issues Forum.
Source: Axcess News
