Apple settles its case with the EC, will equalize iTunes pricing

With Macworld just around the corner, Apple today settled a dispute around iTunes pricing involving the European Commmission (EC), a British consumer group, and four major music companies.

With the agreement now having been reached, Apple has announced plans to lower the prices for music at its UK iTunes Store to match already standardized pricing for iTunes in other countries in Europe.

Through an announcement issued earlier today from London, Apple effectively settled charges brought against the company last spring, when the European Commission said Apple had broken European Union rules by agreeing with four music companies to curtail cross-border downloads of iTunes music.

The dispute got started back in 2005, when the British consumer organization Which? made a formal complaint to the Commission that UK residents had to pay 79 pence (then the equivalent of $1.56) for downloads, whereas iTunes stores in Germany in France were only charging 99 euro cents, (the equivalent of $1.45).

For a while, the EC also apparently contemplated taking further antitrust action against Apple.

But Apple has now promised to match prices within the next six months for song downloads in the UK and 16 other countries in Europe -- including France and Germany -- where the pricing is already equalized.

In a written statement, officials of the Commission said that they welcome Apple's decision.

"This puts an end to the different treatment of UK consumers who currently have to pay higher prices for downloads," according to the EC's statement.

"The Commission's antitrust proceedings have also clarified that it is not agreements between Apple and the major record companies which determine how the iTunes store is organised in Europe. Consequently, the Commission does not intend to take further action in the case."

In its own written announcement, Apple officials said that the company must currently pay some record labels more money to distribute its music in the UK than in other countries in Europe.

"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," according to Apple's statement.

Music companies involved in the dispute include Sony BMG Music Entertainment, Warner Music Group, EMI Group, and Vivendi's Universal Music Group.