Apple has announced it will bring UK pricing on iTunes inline with the rest of Europe within the next six months, which should mean the cost-per-track falls to 74p (or 74.2p by this morning's exchange rate).
The announcement follows that previously reported European Commission investigation into allegations that the iTunes Music Store breached EU rules by charging different prices in the UK than the rest of Europe, while at the same time preventing British music fans from buying music via iTunes services based in other EU countries.
The issue arises because of a slight inconsistency between copyright laws and EU competition regulations that has only really become an issue in the internet age. The former tend to operate on a national level, and allow content owners to limit licensing deals to certain territories, forcing digital music sellers to restrict access to their download stores to internet users in specific countries. But EU competition regulations aim to allow customers in Europe to shop around the Union in order to find a best price. Of course shopping around is much easier with online digital content purchases, because you don't need to physically travel to a retailer, or pay excessive delivery costs for having something shipped from the other side of the continent.
But it is the price inconsistency that really makes this whole thing an issue. Apple's UK licensing deals work out more expensive than those elsewhere in Europe. Under EU rules Apple should allow me, a British music fan, to access iTunes France in order to secure the best price for mainstream downloads. But if they did so, they would breach their licence agreements with the record companies, which restrict the sale of tracks on iTunes France to people accessing the service via a French internet connection.
It was Which? magazine who asked the European Commission to investigate the whole thing, and Apple and the major record companies were subsequently called in for questioning. The former, as usual, blamed the record companies, though to be fair to the IT firm, it is the record labels' licensing restrictions that prevent UK customers from accessing other European iTunes stores, and it is arguably the UK labels' wholesale pricing that forces the 79 pence price point.
Apple's announcement - that they will adjust UK prices so that they match prices elsewhere in Europe - will seemingly bring to an end the EU's investigation on the matter, and EU Competition Commissioner Neelie Kroes is claiming the pledge followed talks between him and Apple boss Steve Jobs.
Though if you look at Apple's statement, the pledge is seemingly more of an ultimatum to the UK labels than a promise to customers. The key sentence in the firm's statement is probably this one: "Apple will reconsider its continuing relationship in the UK with any record label that does not lower its wholesale prices in the UK to the pan-European level within six months". Arguably the statement is a way of forcing the UK divisions of the major record companies to comply with Continental European pricing in the next few months, or risk being publicly identified as the bad guys (again) who are preventing British customers from exercising their rights as EU citizens to get the best possible price for their downloads.
Of course the move by Apple will fix the pricing inconsistency, but not actually overcome the real issue, of whether or not British customers can buy their music from the French iTunes. But that would require some harmonisation between copyright and competition laws, which not even Steve Jobs will achieve through a clever press release.
Though if we're going to push for harmonisation, we'd probably be better off trying to lobby for a free market between us and the USA, where, given the current exchange rate, iTunes downloads are fifty pence each.