Apple has announced that within six months it will cut the prices it charges for music from its UK iTunes store to match those charged in other European countries. The decision brings European Commission antitrust proceedings triggered by a complaint from UK consumer organisation Which? to an end.
According to Wragge & Co antitrust partner Bernardine Adkins, the case is the first indication of a post-Microsoft nervousness among companies who operate differential pricing across the EU.
Bernardine says, “The Commission's resolve to come down hard on companies who engage in discriminatory pricing between EU Member States appears as strong as ever. What is unusual is that although the Commission found Apple hadn't breached competition law, the company has still made concessions on price.”
“It is interesting to speculate whether Apple's decision was taken under the fear of a further investigation under Article 82 EC, which prohibits the abuse of a dominant position. Having seen Article 82 used effectively against Microsoft, might other organisations with no case to answer nonetheless bow to Commission pressure?”
The Commission had been investigating Apple's practice of only allowing EU consumers to purchase music from the iTunes store in their own state. At issue was whether this practice amounted to the imposition of territorial sales restrictions, in breach of Article 81 EC that prohibits anti-competitive agreements.
The Commission did not find any such agreement between Apple and the major record producers. Apple had acted unilaterally in order to take account of country-specific aspects of copyright laws and was not in breach of Article 81. The Commission also appears to have conceded that the creation of a pan-European iTunes store is not currently possible, given the licensing practices of record companies, publishers and collecting societies.