(AFP) – Jan 9, 2008
BRUSSELS (AFP) — Apple escaped on Wednesday a potentially costly antitrust battle with EU competition regulators after promising to cut British prices for music downloads on its popular iTunes online media store.
The European Commission said it was dropping its antitrust case against Apple after the US computer maker announced plans to lower British prices for song downloads to the same level as in other EU countries.
"The Commission is very much in favour of solutions which allow consumers to benefit from a truly single market for music downloads," Competition Commissioner Neelie Kroes said in a statement.
EU regulators levelled formal antitrust charges against Apple and major record companies in April 2007 for charging different prices for the same downloads in different EU countries.
Under the arrangement, British consumers currently pay nearly 10 percent more than their peers in countries using the euro because iTunes users can only download music from the site in the country where they live.
The US computer giant, which also makes hugely popular iPod media players, said Wednesday it would lower prices in Britain within six months in order to standardise British prices with those elsewhere in Europe.
In reaction the European Commission, Europe's top competition watchdog, welcomed the decision, which it said "puts an end to the different treatment of UK consumers."
Apple said that it was the record companies that make it pay more in Britain at the wholesale level than elsewhere in Europe and that it would "reconsider" its relationships with any label that did not lower its British prices.
"This is an important step towards a pan-European marketplace for music," said Apple chief executive Steve Jobs said in a statement. "We hope every major record label will take a pan-European view of pricing."
If the Commission had decided to go ahead with its case, the action could have led to fines equivalent to up to 10 percent of Apple's worldwide annual turnover if it found the company guilty of restrictive business practices.
The Commission's case, which was launched following a complaint from British consumer protection association Which?, targetted agreements between Apple and record companies requiring consumers to purchase music in the country of residence.
Although the EU competition watchdog was originally concerned that the agreements restricted consumers' choices and the prices they pay, it concluded that iTunes was set up in a country-specific way to take different copyright laws into account.
"The Commission is very much in favour of solutions which would allow consumers to buy off the iTunes' online store without restrictions," it said in a statement.
"But it is aware that some record companies, publishers and collecting societies still apply licensing practices which can make it difficult for iTunes to operate stores accessible for a European consumer anywhere in the EU," it added.
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