Apple has reignited its war of words with the music industry after agreeing to slash the cost of downloading music via its iTunes platform by 10 per cent, due to pressure from the European Commission to standardise its pricing across Europe.
Apple will make the cut over the next six months to align its UK prices with what it charges in other European countries such as Germany and France where consumers pay less to buy music through iTunes. Although Apple did not detail its new pricing strategy, single-track downloads cost the equivalent of 74p in Europe, compared with 79p in the UK, while an album costs £7.49 on the Continent versus £7.99 in Britain.
Brussels has closed proceedings against Apple as a result of its decision to slash its UK prices. "Following iTunes' announcement, UK consumers will soon pay the same for music downloads from iTunes as customers from eurozone countries," the anti-trust watchdog said.
Yet Apple continued to point the finger firmly at the music companies for the discrepancy in prices across Europe, arguing that it has to pay some record labels more to distribute their music in the UK than it does in other countries. It went as far as to threaten to break off its relationship with any record label that refused to lower wholesale charges, removing that company's songs from iTunes.
Steve Jobs, Apple's chief executive, said: "This is an important step towards a pan-European market-place for music. We hope every major record label will take a pan-European view of pricing."
Despite Apple's arguments that it pays music companies more to sell their music in the UK compared with other markets, the European Commission stated that agreements between the US company and the major record companies do not determine how iTunes is organised in Europe. As a result, the regulator dropped its case against the major music companies – EMI, Universal Music, Warner Music and Sony BMG – arguing that it was country-specific copyright laws, not restrictive business practices, that were responsible for the variance in iTunes' pricing.