Apple today announced that it has reached an agreement with antitrust regulators in the European Union (EU), ending an investigation into its pricing schemes for online music there. Apple says that it will lower prices on music it sells in the UK to match that sold elsewhere in Europe within six months.
However, Apple also curtly laid the blame for the pricing differences on the recording labels and issued a threat to those companies. "Apple currently must pay some record labels more to distribute their music in the UK than it pays them to distribute the same music elsewhere in Europe," the company noted in a statement. "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."
The EU exonerated Apple, noting that the company's difficulty in selling music at identical prices throughout Europe is caused by country-specific copyright laws, and not special agreements with record labels. The result, however, is a fragmented market for music in Europe: In each country, iTunes offers different content and, often, different prices. The EU says it is working towards establishing rules that would allow for a single market for music downloads in Europe.
The EU inquiry into pricing at Apple's iTunes Store is the first formal antitrust investigation that the company has faced so far, but it's surely not the last. According to media analysts, the company currently dominates the markets for online music and video. Its iPod portable media players and the iTunes Store both dominate their respective markets, with most competitors mopping up single digit shares in each. This level of domination is sure to catch the attention of antitrust regulators around the world, especially given the huge growth expected in these markets in coming years.
