Apple Scraps iTunes Pricing Policy For EU

Apple Inc. will scrap its restrictive online pricing policies across Europe for its iTunes music downloads, the European Union said Wednesday.

Consumer advocates said the price system meant people in Britain paid more to download songs than customers in countries using the euro.

The maker of the popular iPod media players had been under investigation since April by EU authorities after a British consumer group complained that Apple and major record companies were unfairly restricting the choice and cost of downloads from the U.S. company's European music stores.

The European Commission said it had closed its antitrust probe into Apple's iTunes operation concluding it had found no evidence that the U.S. tech giant had broken any EU laws in its dealings with record companies and how Apple organizes its European iTunes stores but said problems still remained over copyright issues.

EU Competition Commissioner Neelie Kroes welcomed the agreement, saying it would "allow consumers to benefit from a truly single market for music downloads" across the 27-nation bloc.

Apple said that it would lower prices it charges for music on its British iTunes site "within six months" to match prices charged on its other 16 iTunes stores across Europe.

"This is an important step toward a pan-European marketplace for music," said Apple Chief Executive Steve Jobs in a statement.

EU regulators opened a probe into iTunes last year. They alleged distribution agreements Apple signed to sell music from its online stores in EU countries contained territorial restrictions which violated EU competition rules because consumers can only download music from the iTunes store in their country of residence.

Downloaders have to provide a credit card issued by a bank with an address in the country where they live.

Britain's Consumers' Association Which? filed a complaint with EU regulators in 2004 complaining that British customers of iTunes downloads had to pay more than those in France or other iTunes stores in countries using the euro currency.

The commission said it found that prices for downloads from Britain cost nearly 10 percent more than those from other iTunes stores in the euro-zone.

The European Commission said it would not address other complaints over copyright restrictions which Apple says it is forced to abide with.

The EU executive office said there is "no agreement" between Apple and major record companies on how iTunes stores are organized in Europe, notably on allowing consumers to download music from an iTunes store outside their country of residence.

The commission said it still wanted a situation where consumers could make purchases from iTunes "without restrictions." But it said it was "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."

European consumer groups had argued that buyers of online music should have the right to access shops in different EU countries.

Apple has insisted it has to keep in place national iTunes stores due to stringent copyright restrictions set up by record labels, but Steve Jobs said Wednesday he would continue to try to convince record companies to lift such restrictions so Apple can set up a single iTunes store for all of Europe.

"We hope every major record label will take a pan-European view of pricing," Jobs said.