Apple Getting The Microsoft Treatment From EU
from the the-tragedy-of-success dept
By entering into an agreement with EMI to sell DRM-free music, Apple may pacify some of its critics in Europe that want the company enjoined from selling DRM-laden tracks. But, just as it dodges one bullet, there may be another one to contend with. There are reports that the EU is set launch an investigation into the iTunes store for alleged antitrust violations. This time, the problem is not DRM, but rather the fact that Apple has different iTunes storefronts in different European countries. A spokesman for Apple said that the company doesn't believe it's in violation of the law, and that it's only following the wishes of the music labels in selling music on a country by country basis. This is basically the same line it's trotted out with respect to DRM, that it's all the labels' fault. While some consumers might find themselves inconvenienced by the system, this seems like a rather weak reason for the EU to go after the company -- it's certainly unclear how this falls under the rubric of anticompetitive behavior. The EU already has a clear track record of going after companies that are too successful, with Microsoft being a prime example, and it's starting to look like Apple is getting the same treatment.
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Parallel importing or not?
I wonder how this relates to the CD-WOW case. There it was shown that it was legitimate for copyright holders to appoint exclusive country-specific distributors, and anybody trying to bypass those distributors was guilty of copyright infringement.
So here we have Apple setting up country-specific iTMS storefronts, but suddenly the EU deems these to be anticompetitive.
Yes, country-specific sales policies are anticompetitive in a common market. Parallel importing renders such policies ineffective. The question is: does the EU have laws against parallel importing or not?
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So...
EU: Boy you're gunna get a spanking now Apple!
Apple: The record labels made me do it!
In other words Apple has pretty much twice now admitted they're nothing but the record industry's little tool.
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You forgot something
I mean, if it costs the same in the US, it should cost the same in the UK, it should cost the same in Germany. There's no shipping on downloads, obviously.
Personally, I say Apple deserves this investigation.
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The EU is slowly but surely moving to socialism, the government will control everything - want music? EtUnes.
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Who knows, with all the crazy VAT and other taxes out there, it may cost more to shove that song through the pipes.
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Re: Bob Jones and Anon
So let's get this straight - if Texans were forced to pay more money for the same download than say folks in Washington the US government and people would be cool about this?
The EU operates almost as a federal government on trade issues for its member countries - similar to that other socialist country the USA...
As for crazy VAT - that's UK only (other member countries have other taxes and some are similar in nature) and yes we all have different tax methods in-country. Again kind of like, oh I dunno - different US states maybe? (Alright maybe a bit more complex but we can handle it)
You're right about one thing though - it's probably not completely in line with the "capitalistic ideology of setting prices to what the market can bear."
Guess what? Not everyone shares your bizarre ideology completely 100%. I realise that to a person used to living in a completely bi-partisan society where everything is black or white, democrat or republican, capitalist or pinko-commie, this makes us all the latter. It's the fact that you genuinely seem to believe this, that makes me laugh the most
As for Leonard's "Apple should stop selling ipods and close down their store in Europe" - yeah sure, take your ball back. Or perhaps Apple's executives are wise enough to remember what happened to the spoil brat who did this at school? Someone else brought a ball in and he sat all alone.... yeah Mr Jobs wants to lose the chance to sell to a couple of hundred million people like he wants a hole in his head! (He would finally impress me as having some balls if he did though!)
Basically you all seem pissed that you can't just come to another country, and expect to sell things in a manner which would get you jumped on at home. Go cry somewhere else - my stone heart is devoid of sympathy (hey perhaps I am a Euro-republican after all!)
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Re: Re: Bob Jones and Anon
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A response to Lawrence and Bob
The CD-WOW case is different because CD-WOW was importing CDs from *outsite* the EU (Hong Kong).
Bob (and the AC below him),
The EU is not investigating prices, nor is the EU telling Apple what price they can use.
What the EU is objecting to is that UK users are restricted from buying only from the UK iTunes store and cannot buy from, for example, the German store.
So, Apple would be completely within the law to set their price higher in the UK as long as UK users could simply switch to the German store and buy the track for less there.
Not socialism, rather it's free market capatalism. The governemt is ensuring a free market across the EU. Apple can set whatever prices it wants in different EU countries, but EU citizens are free to buy from whomever offers them the best price.
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free movement of goods
There is a "free movement of goods" regulation in Europe. No one will argue Apple asking diferent prices in diferent stores as long as a UK citizen can buy online music from the ITunes Italy store.
http://www.europarl.europa.eu/facts/3_2_1_en.htm
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It's very simple
So in term of CD WOW, it makes no difference. CDWow are outside the EU and not protected by EU law. They are caught in that stupid UK anti-parallel importing clause in UK copyright law (which cannot be applied to other ETA countries).
This means that a UK citizen should be able to buy their music from iTunes Germany if they wish. But Apple says no. Buzzzzz, wrong answer, the laws says yes so Apple must comply. The record companies already comply, they had no choice, you can order CDs from any company in Europe.
And discriminatory pricing is always cracked down on, so car makers tried to sell more expensive cars to the UK.... Buzzzzzzz, wrong answer, the law says they can't do that and the EU makes sure that if you want to buy a right hand drive from a Beligum car dealer then he will be able to get it and sell it to you.
As for VAT, its everywhere in Europe, 17.5% in UK, 16% in Germany (called MwST), France 19.6% (called TTC I think?), Spain 16% (called IVA). It has nothing to do with this and does not explain the price differences.
Apple are in the wrong here.
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In the UK, iTunes songs are sold for £0.79, and there is 17.5% VAT, making the pre tax cost 67.23 pence. For 12 of the last 15 years, GBP has been above the 1.5 USD mark, with a value now far higher than that. Using $1.5 as the commercial exchange rate, an iTunes track costs 101 cents, that's two cents higher.
For a digital distrobution, where there are no shipping costs, this rise of greater than 2% is poor value for the consumer.
However the real problem for the EU is not this. The problem is that Apple have a seperate storefront for each country, and you cannot purchase from one country when you live in another. The EU is a free trade zone, and it is perfectly legal to drive accross the border and shop in another country within the EU, which Apple does not allow.
And this is not to mention the wrongful light that the EU anti-trust/monopoly investigate is being painted in. A case, we should note, that has clear merit, and similar cases have happened in the US and found MS guilty.
Enrico said it all far better than I ever could, though.
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Re: Bob Jones
I don't want to retread the same ground, but the other posters that pointed out your mistakes had the right idea.
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Texans aren't "forced" to pay for anything. If they choose to buy, then yes, Apple is well within its legal rights to sell its music at whatever price it wants, varied across the country. And it does -- iTunes music costs more to buy in California than in Delaware, due to the former's sales tax.
The USA is a free market economy, not a regulated socialist one, so generally consumers set the prices rather than government.
Incidentally, the comparison of "would the US accept different prices between states" is even more absurd when you consider that the UK and Germany are separate countries, with separate governments, currencies, languages, laws, and armies -- completely unlike US states that have the same government, currency, language, laws, and army.
I agree with those who call for Apple to shut down its music store if the EU gets greedy. The US government should also engage in aggressive retaliation against EU imports with tit-for-tat fines and trade barriers to respond to Europe's attack on our technology industry.
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