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Download rates raise music pricing debate: iTunes discriminates against UK consumers, says CA.(Downloads)
"Consumers' Association rails at over-priced music"--it is a headline which has echoes of 1994, but in 2004, it reflects a new spin on an old complaint. And once again it brings the structures of music pricing under the microscope.
Apple, the runaway market leader of the fast-emerging legal digital music market, has been dragged into the spotlight by the watchdog group, which has gone as far as to suggest iTunes Music Store's pan-European pricing structure is an example of "anticompetitive and discriminatory behaviour against UK consumers."
In its official complaint to the Office of Pair Trading, the organisation says the online retailer is "distorting the very basis of the single market" by charging UK consumers 79p (1.16 [euro]) a track, compared to the 0.99 [euro] (68p) price point offered to French and German consumers.
While the pressure has come off CD pricing as supermarkets and parallel importers have dragged prices down across the market to around a tenner for a chart title, it is the fact that iTunes' product is digital and can be distributed only by Apple that forms the central tenet of the CA complaint.
"This is not the same as other markets, because there is a distinct market for digital downloads," says CA principal policy advisor Phil Evans. "If someone is pricing differently on tennis balls or TVs, you can just go to France and buy them there, but you can't do that here because this is a digital product and Apple controls the distribution.
"The nub of the problem is not really that they are ripping us off--which is a pain in the butt and not very clever on their part--but that they deny us the ability to get round that system by buying in France."
The allegations represent the arrival in the digital world of an age-old argument which, according to online retailers--as it was for retailers and record companies before them--takes little account of the complexities of the global music market.