Music fans in the UK have reason to celebrate. Apple announced it will lower the prices it charges for music on its UK iTunes Store within six months. The decision marks the end of a European Commission antitrust probe into Apple’s pricing practices.
The prices will match the standardized pricing on iTunes across Europe. Consumers in the UK have been paying about 10 percent more for digital music downloads than consumers in other European nations.
Apple said it must pay some record labels more to distribute their music in the UK than it pays them to distribute the same music elsewhere in Europe. The company said it will reconsider its continuing relationship in the UK with any record label that does not lower its wholesale prices in the UK to the pan-European level within six months.
“This is an important step towards a pan-European marketplace for music,” Apple CEO Steve Jobs said in a statement. “We hope every major record label will take a pan-European view of pricing.”
Apple Case History
The European Commission launched an antitrust probe into Apple’s iTunes, its method of selling music over the Internet, and its agreements with record labels in April 2007. The Commission said the distribution agreements Apple has inked with record labels to sell their music on iTunes in European Union countries “contain territorial sales restrictions” that violate its competition rules.
The Commission took exception to the fact that consumers were restricted in their choice of where to buy music and consequently what music is available, and at what price. For example, in order to buy a music download from iTunes in Belgium, a consumer must use a credit card issued by a bank with an address in Belgium.
If Apple had been found guilty of breaching EU antitrust rules, it would have faced fines up to 10…