UK govt takes iTunes gripe to Europe

Discussion in 'Off-Topic Chat' started by TheMusicMan, Dec 27, 2004.

  1. TheMusicMan

    TheMusicMan tMP Founder Staff Member

    The UK's Office of Fair Trading (OFT) has reported Apple's iTunes Music Store to the European Commission (EC) on the grounds that the service may infringe European trade regulations. The reason for the move lies in Apple's refusal to allow buyers in one country to purchase music from another nation's iTunes store. While UK consumers pay 79p for songs, customers in France and Germany pay €0.99. At current exchange rates, that comes to 68p. Unfortunately, Apple prevents UK buyers from going to the French store and buying songs there, more cheaply than from the local iTunes store. That ban may well run contrary to European laws which govern the free movement of goods and services between EU member states - the single market. Apple has maintained in the past that its hands are tied. Different states have different music licensing regimes and it's the terms of its licences that prevent it from selling, say, a France-sourced version of song to a UK consumer.

    The differential pricing is also a result of this licensing mess, and from differing tax regimes between EU member states. Indeed, the EC is itself aware of the problem, and earlier this year effectively told the Union's various rights agencies to devise a standard, cross-border licensing scheme.

    In April this year, a month before its UK launch, Napster said it had been frustrated by the mass of different licensing hoops it would have to jump through to open online music stores throughout Europe. In the end, unlike Apple, it settled for a UK-only launch. At the time, Apple Europe chief Pascal Cagni made a similar complaint.

    However, Apple's own cross-border store, which sells to a number of European countries, including Spain, Italy and the Netherlands, has clouded the company's argument. If Spanish and Belgian buyers can acquire the same song from the one store, why can't British or German buyers do the same?

    The OFT's move follows an investigation begun in September this year at the behest of UK consumers' association, Which? ®

    Full story at theRegister
  2. rutty

    rutty Active Member

    It's getting ridiculous all these different licenses for different countries. Fine, each country should have a choice over taxation/legislation and such like, but this is not helping the consumer in any way. It's own-country protectionism which is doing nothing to help a one-world market. Oddly enough the companies themselves are happy to maintain it so they can maximise their profits where they can while complaining about it in public.

    I'm not using it until it's much cheaper, I have enough CDs to keep me going for the time being.
  3. jonford

    jonford Member

    I as well am not to bothered about downloading mp3s at the moment, I still like cds with all the cover art and extra information you get, plus with shops like music zone you can get some bargains.
  4. TheMusicMan

    TheMusicMan tMP Founder Staff Member

    Point being though Dave is that the advert says ..."there is always MasterCard!!" methinks that some companies are now setting up e-businesses that won't allow you to use your mastercard or any other payment medium for that matter any more, unless you are of course purchasing in your personal point of origin.

    I believe even Amazon are starting to do this now too. At one time you could search for a book on and perhaps find out that this book wouldn't be delivered for 28 days - you'd then do a search on and find that (1) it can be delivered in 3-5 days and (2) it was the same amount in US Dollars i.e. £30.00 in UK and $30.00 in US.

    So much for free trade eh.... this has to stop...
  5. rutty

    rutty Active Member

    Too damn right! Too many people taking pieces of that particular pie though. Vive la revolution! :D
  6. brasscrest

    brasscrest Active Member

    This also happens in the US, where different states have different laws on taxes due for purchased goods. For example, if I buy a computer in Maryland, I must pay a 5% tax (based on the sale price, kind of like a VAT, but not quite). But if I go to visit my parents in Delaware, I can buy the same computer and pay no tax at all. Theoretically, I'm supposed to pay the tax in Maryland when I "import" the computer by bringing it home. But this is unenforceable except for items that must be registered (such as automobiles).

    Now, if I buy the computer online (like I did the one I'm using right now), who gets the tax? Am I buying the computer in my home state, since that's where the order was originally made? Or am I buying the computer in the state where the company is located? Or is it the state from which the computer is actually shipped?

    In the US, this has never been resolved. Currently, most online operations (including iTunes) operate using archaic rules that were intended for use by mail order operations. The international nature of the Internet has made these laws obsolete. Every couple of months, some state legislature comes up with a scheme to "tax the Internet". So far, these efforts have been defeated because the federal government has the authority to regulate commerce between states.

    Hopefully the EC will come up with an equitable way to do this. Maybe then the US can take that model and apply it in some form in-country.

    In direct relation to recorded music, the real problem is that the current method of distributing such music by a physical means (like a disc) is rapidly and irreversibly becoming obsolete. Unfortunately, the publishers and labels, who have a large investment in the current methods, have for the most part not yet been able to cope with this fact. In my opinion, it will take an entirely new approach to how recorded music is produced and paid for in order for real electronic distribution to happen. This change is coming soon, probably in the next five to ten years. Optical disc technology is (practically) about 25 years old now and is ripe for replacement.

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