In 2004, the UK consumer protection group, Which?, brought Apple iTune’s unfair pricing practices to the attention of Britain’s Office of Fair Trading.  Which?, previously known as  The Consumers’ Association, contended that UK consumers were being charged unfairly for purchases made through Apple’s iTunes Music Stores for song downloads to Apple iPods.  

The Office of Fair Trading eventually turned this matter over to the European Commission, noting that since Apple iTunes Stores operated in many European countries, the European Commission was better suited to investigate the complaint.

While American consumers were paying $.99 per downloaded song, consumers in the UK were paying the equivalent of $1.53 per song.  Meanwhile, European customers were paying the equivalent of $1.33 per song, which is approximately twenty percent less than the UK customers’ cost.  The price for European consumers was consistent across all countries (Austria, Belgium, Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, and Spain).  The addition of a Canadian iTunes store in December, 2004 further fueled the fire, as Canadians were charged the equivalent of $.83 per song.Not only were UK iTunes customers charged more for their purchases, but they were not allowed to enter any of the other European countries’ iTunes Stores to buy songs at a lower rate.  Credit card information was used to determine the consumers’ countries of residence, blocking nonresidents from access to any given store.  Eddy Cue, an Apple executive, defended this practice by stating, “The costs do vary by region for Apple.”  He explained that the market, taxes, and Apple’s music costs fluctuate according to each country.In reference to the UK’s increased iTunes prices and the fact that purchasing music from another country’s iTunes Music Store was prohibited, Phil Evans, principal policy advisor for Which?, remarked, “UK consumers are getting a raw deal from Apple.”  He further stated, “We’re campaigning for free movement of goods and services in Europe, and we’ll take on any company, or group of companies, that seek to carve up the market to their benefit.” After three years, the announcement was made in January, 2008 that the fight for lower iTunes song prices in the UK had been won.  The European Commission communicated that Apple agreed to decrease the price of iTunes song downloads in the UK by ten percent.  The price change would take effect by July, 2008.  .  Neelie Kroes, European Union Competition Commissioner, stated, “The Commission is very much in favor of solutions which allow consumers to benefit from a truly single market for music downloads.”  The European Commission’s findings included verification that Apple did not have agreements with any major record companies that would lead to an outside influence on how iTunes Stores operated in Europe.  

Although Apple agreed to a decrease in iTunes prices for the UK, they made it clear that several record companies also need to lower their prices for music distribution.  Apple will no longer accept being charged a higher price for music distribution in the UK than in the European countries and will discontinue agreements with any company that continues this practice.