Apple has pre-empted any regulatory action by the European Commission by announcing today that it will lower the prices on its U.K. iTunes store to match the standardized pricing across Europe.
Apple says the new pricing will take effect within six months and bring the U.K. in line with iTunes stores in Austria, Belgium, Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and Spain.
However, Apple says that, because some distribution costs are higher in the U.K., it will reconsider its continuing relationship with any label that does not lower its wholesale prices to the pan-European level within six months.
"This is an important step towards a pan-European marketplace for music," said Steve Jobs, Apple's CEO, in a statement. "We hope every major record label will take a pan-European view of pricing."
The developments follow the European Commission issuing a Statement of Objections in April 2007, stating that the U.K. iTunes store might be in breach of EU competition rules -- the first step in formal antitrust proceedings. The regulator has now closed the case which dates back to 2004 when the British consumer association Which? complained that iTunes stores in France and Germany charged 99 euro cents ($1.45) per track, while the U.K. price was 79 pence ($1.56). The U.K.'s Office of Fair Trading referred the complaint to the EU regulator.
"This puts an end to the different treatment of U.K. consumers who currently have to pay higher prices for downloads," the European Union's competition regulator said in a statement in response to Apple's announcement. "Consequently, the Commission does not intend to take further action in this case."
Apple has said that copyright restrictions prevent it from operating a single iTunes store across Europe. However, the Commission said that antitrust proceedings have clarified that agreements between Apple and the majors do not determine how the iTunes store is organized in Europe.
Which? responded positively to today's announcement.
"We complained about Apple's price discrimination back in 2004 -- so we're glad they've finally agreed to give British music lovers a fair deal," says Which? lawyer Chris Warner in a statement. "The fact they'll soon be able to download tracks for the same price as European customers will be music to the ears of U.K. iTunes customers.
"We hope other internet companies -- including online music companies - will follow Apple's lead and match U.K. prices to prices in continental Europe."
He added that Which? would now like to see Apple lift restrictions that stop people downloading music from iTunes Web sites in other countries.