Most of you, and Appleinsider's own reporrt have missed the point. The issue under European rules is not that the price has to be the same in all European markets. It is that there must be free access for all members of the EU to all markets in the EU. This is where the car makers came unstuck because they were trying to stop residents of say France from buying cars in Denmark where because of high local taxes, cars were much cheaper. (the manufacturers were charging a lower price). All that has to happen is that Apple must stop blocking residents in one EU country from buying stuff from the iTunes store in another. Then Apple/ the record labels will be in full compliance.
Just thinking further about this EU issue, it may also have repercussions for Apple's business model for the iphone- I should be able to buy an iphone in one EU country and use it in another. This is clearly difficult with a locked phone!
"We think prices should be the same," he told the conference attended by Reuters. "We think anybody in Europe should buy off any store."
...
The Commission's complaint, which dates back to 2005, stems from the fact that iTunes stores in France and Germany charge 99 euro cents ($1.38), while Britons must pay 79 pence ($1.58).
...
What's the betting that across Europe, all the prices rise to the higher level rather than our prices in the UK drop?
No its not an unfair thing for the EU to do, it is called the European Single Market and everybody else seems to manage quite fine sticking to it. The whole point of it is that it encourages free trade accross Europe and creates a competetive level playing field, which ultimatley is good for both business and the consumer. Steve Jobs is full of BS, if he really wanted to charge the same accross Europe then why does he not just bloody do it??
As has been pointed out that was one of the most ignorant posts on the site.
Perhaps you better do some research. First of all, the music producers are country dependent. What one country agrees cannot be unilaterally applied to another.
It is getting closer, but they still vary from country to country.
Quote:
Originally Posted by JeffDM
Do you think that the wholesale pricing might be different between different countries? It wouldn't make sense for Apple to take a loss in one country or to charge a lot more in another to equalize the prices.
Quote:
Originally Posted by SpamSandwich
Uh, because he would be losing money for Apple... which is not a good thing.
Quote:
Originally Posted by Isidore
Most of you, and Appleinsider's own reporrt have missed the point. The issue under European rules is not that the price has to be the same in all European markets. It is that there must be free access for all members of the EU to all markets in the EU. This is where the car makers came unstuck because they were trying to stop residents of say France from buying cars in Denmark where because of high local taxes, cars were much cheaper. (the manufacturers were charging a lower price). All that has to happen is that Apple must stop blocking residents in one EU country from buying stuff from the iTunes store in another. Then Apple/ the record labels will be in full compliance.
Regards Isidore
Okay, you all seem to have got the wrong end of the stick here. My post was in response to the actual article you all should have read before commenting on it, in the article it says Steve Jobs would like to see the same pricing model across Europe. I simply responded that nobody is stopping him so why does he not do it?? How can he say he would like something that is in his power to deliver but not do it, that is why he is full of BS.
I snuck in a comment about the EU free trade because someone above me was having a go, I never said that the EU demands equal pricing across member states.
I have been stating in previous posts that the EU demand the freedom to buy goods and services in any member states, this is where Apple are in trouble because they stop people in the UK buying itunes tracks from the french iTunes store and the same for other countries.
I am Irish (part of the EU) i have been working in business in the UK for the last 15 years, i think i understand exactly what the rules are, to call me ignorant is just plain ignorant.
Quote:
Originally Posted by Walter Slocombe
As has been pointed out that was one of the most ignorant posts on the site.
See above, what exactly was ignorant about it? Maybe you should of read the article first and you would see what i was responding to.
What "everybody" are you talking about? This is a purely nonsensical assertion. And you only add to that when you make a sweeping claim such as "Steve Jobs is full of BS."
Actually, if anyone is full of BS..... (you can complete the sentence).
(And, if you use Safari, could you please take the trouble to turn on "check spelling as you type" -- it is under "Edit" and "Spelling." Poor spelling only detracts further from what you are trying to say).
You my friend are a rude, ignorant and complete and utter arsehole, and i refuse to take criticism on spelling from an American, your country have bastardised the English language beyond all recognition.
Most of you, and Appleinsider's own reporrt have missed the point. The issue under European rules is not that the price has to be the same in all European markets. It is that there must be free access for all members of the EU to all markets in the EU. This is where the car makers came unstuck because they were trying to stop residents of say France from buying cars in Denmark where because of high local taxes, cars were much cheaper. (the manufacturers were charging a lower price). All that has to happen is that Apple must stop blocking residents in one EU country from buying stuff from the iTunes store in another. Then Apple/ the record labels will be in full compliance.
Regards Isidore
Excellent summary Isidore. I find it amazing that an international company like Apple (with all their highly paid lawyers) simply doesn't understand a basic tenant of EU trade law. Maybe they know something the rest of us don't. I don't follow these things but even I know about this law.
Excellent summary Isidore. I find it amazing that an international company like Apple (with all their highly paid lawyers) simply doesn't understand a basic tenant of EU trade law. Maybe they know something the rest of us don't. I don't follow these things but even I know about this law.
I am not sure about that. I think they fully understand the basic EU tenet, since SJ explicitly says (see story) "We think anybody in Europe should buy off any store." There is nothing ambiguous about that.
The problem is, the record companies -- with some of whom Apple already has a testy/tenuous relationship -- will throw a legal hissy-fit. I am sure Jobs could dare them to do so with a simple software update, but given how marginally profitable the iTunes Store is for Apple (and all the other higher value-added things that Apple's management needs to spend time on), I wonder if they think it's not worth the hassle. At this stage, it is far easier for Apple to say, "put a couple of lawyers on the case in Brussels, and we'll worry about it if/when it becomes a front-burner issue."
I see no no reason to not take SJ fully at his word when he says that he would love to fix this problem. After all, he put his money where his mouth is on the DRM issue; and again similarly on the iPhone credit. A CEO of a $120 billion company does not make casual comments on these sorts of issues, because (s)he risks all sorts of shareholder lawsuits.
Most of you, and Appleinsider's own reporrt have missed the point. The issue under European rules is not that the price has to be the same in all European markets. It is that there must be free access for all members of the EU to all markets in the EU. This is where the car makers came unstuck because they were trying to stop residents of say France from buying cars in Denmark where because of high local taxes, cars were much cheaper. (the manufacturers were charging a lower price). All that has to happen is that Apple must stop blocking residents in one EU country from buying stuff from the iTunes store in another. Then Apple/ the record labels will be in full compliance.
Regards Isidore
Spot on. That's the real issue. Under EU rules there should be free trade of goods across borders so I (in the UK) should be able to buy from a store in Germany. Tax is charged at the local rate for the store btw, not my rate.
Quote:
Originally Posted by disillusion
Actually, Apple is not the main interest of this investigation. It is just loosely associated through the iTunes store.
Since Apple is the one that is selling the tunes, it's more than loosely associated.
Quote:
Originally Posted by Shaun, UK
Excellent summary Isidore. I find it amazing that an international company like Apple (with all their highly paid lawyers) simply doesn't understand a basic tenant of EU trade law. Maybe they know something the rest of us don't. I don't follow these things but even I know about this law.
I'm sure they do know the law and possibly they are not breaking it.
Firstly, the only operate ONE itunes store. It's based in Luxembourg where the VAT is the lowest in the EU.
Secondly they technically are allowing sales to any member country from the country they operate in.
Then it gets way more complicated. They're operating in Luxembourg under English laws (not Luxembourg's or even the EU's). They charge VAT at the rate of the purchaser's country, not Luxembourg. They restrict content to local music company distribution deals. They charge different prices for each country which isn't illegal even though they're technically still all in Luxembourg.
What's the big deal. This isn't milk or beef or some other staple. A dime or two is hardly enough to matter when buying music is so much easier. Even gas stations selling the same gasoline brand around my neighborhood have high and low prices. If you want gas in your tank, you pay the price.
It's not about the pricing. It is about not being able to buy from any store you want. Europe believes, and rightly so, that you should be able to buy from any store in europe, no matter where you are located.
Apple tried to solve the copyright restrictions, sometimes record company's only have the rights for some but not all european countries, by creating a store per country. Each store only has the songs for which the rights are valid for that country.
Their is no easy solution for this. I think Apple should create a single store with one single price for everybody. The UK has still the pound as currency but they can pay in Euro's without any problems, the credit card company will do the conversion.
They could also sell the songs without rights for that particular country as imports. At a higher price perhaps, but it could be done.
Yes, we have different VAT rates (they can be very different), but that's not different from USA where you have a different rate in every state ? isn't it ?
You are correct, but you missed my point.
In the US, sales tax is always appended to the bill after the fact. So if I live in VA, I must pay VA sales tax on the purchase, no matter where the store is physically located. (The store isn't required to collect the tax if they don't have a point of presence in the buyer's state, but the buyer is still supposed to pay.)
The VAT system used in Europe is a bit different. The tax isn't appended to the price - it's incorporated into the price. So a store in two different countries will have to post different prices, even if their costs and profit margins are the same.
And now we get to a part of the law I don't quite understand. If I live in one EU nation and I make a purchase from a store in another nation, what's the status of the VAT? Do I pay the nation hosting the store, at that nation's rate? Do I pay my own nation at my own nation's rate? Something else?
If it works like sales tax in the US, where you pay your own nation, regardless of the store's location, then each store's server will have to know the VAT rate of each EU nation. When you log in, it will have to recompute the prices based on your account's configured location, in order to collect the correct VAT. I'm not sure how the public would respond to this - if an Italian and a German see different prices posted at the same store, won't that create even worse anger than there is now?
Now, if VAT is owed to the country hosting the store, then Apple's job becomes simple - each store's prices simply reflect that nation's VAT rate. But I would be surprised if that's actually the law, since it would encourage everybody to buy from the nation with the lowest VAT, upsetting all the other nations.
At least that's my understanding of the legal issues that may be involved. Of course, record-label contracts will add even more complexity.
And now we get to a part of the law I don't quite understand. If I live in one EU nation and I make a purchase from a store in another nation, what's the status of the VAT? Do I pay the nation hosting the store, at that nation's rate? Do I pay my own nation at my own nation's rate? Something else?
Now, if VAT is owed to the country hosting the store, then Apple's job becomes simple - each store's prices simply reflect that nation's VAT rate. But I would be surprised if that's actually the law, since it would encourage everybody to buy from the nation with the lowest VAT, upsetting all the other nations.
If you buy goods from another EU country you pay the VAT that applies in that country, not your own. I recently bought a dishwasher from the UK so I paid the 18% VAT that applies there, not the 21% that applies in Ireland.
This should 'encourage' countries to lower their VAT rates so they are more uniform, but in practical terms, few households (except mine) are going to bother with the hassle of trying to communicate across language barriers and the problems associated with shipping. In practical terms, it is only worth buying really expensive stuff from other member sates because of the extra cost of postage/shipping.
There should be one iTunes store in the EU, everything it sells should be available to everyone in every EU state at the same price and the VAT should be that which applies in the sate where the store is located.
The problem is the Copyright laws that have allowed the record companies to place restrictions on rights and availability. This whole problem stems from that. The simple solution is an EU directive to member states to modify their varying Copyright laws so they are uniform throughout the EU and so they no longer contain aspects which allow copyright holders to engage in restrictive market practices within the EU and so manipulate prices to their maximum benefit.
Before some smart arse pipes in with that being their duty to their shareholders - it is entirely against the more important and overriding principle around which the EU was founded, namely it should operate as a single market. The Copyright laws are antediluvian throwbacks that should be trashed and re-written so companies like Apple don't have this problem in the first place.
Have you noticed that the record companies seem to be too scared to appear - two have dropped out? I think they are scared stiff and don't want to draw attention to the problem I outlined in case it resulted in a solution such as I suggest.
If you buy goods from another EU country you pay the VAT that applies in that country, not your own. ... This should 'encourage' countries to lower their VAT rates so they are more uniform, but in practical terms, few households (except mine) are going to bother with the hassle of trying to communicate across language barriers and the problems associated with shipping. In practical terms, it is only worth buying really expensive stuff from other member sates because of the extra cost of postage/shipping.
Thanks for the information.
In the case of downloaded product (software, music, etc.), these barriers don't really exist. Which means everybody is going to flock to the store hosted where VAT is lowest - upsetting all the other nations, if they want to collect VAT from their own locally-hosted stores. I'm sure this is a factor in the labels' intransigence.
I'm not saying there's anything wrong with consumers flocking to the lowest price - I would do the same thing - but politics and greed is always the first thing in government's mind. Convenience to the consumer is something they only grudgingly consider if the issue is big enough to change the outcome of an election, and even then they usually don't care.
But maybe this lawsuit will, among other things, be the cattle-prod-up-the-nether-regions that the politicians need to actually do something right for a change.
Comments
Regards Isidore
Regards Isidore
...
"We think prices should be the same," he told the conference attended by Reuters. "We think anybody in Europe should buy off any store."
...
The Commission's complaint, which dates back to 2005, stems from the fact that iTunes stores in France and Germany charge 99 euro cents ($1.38), while Britons must pay 79 pence ($1.58).
...
What's the betting that across Europe, all the prices rise to the higher level rather than our prices in the UK drop?
P
No its not an unfair thing for the EU to do, it is called the European Single Market and everybody else seems to manage quite fine sticking to it. The whole point of it is that it encourages free trade accross Europe and creates a competetive level playing field, which ultimatley is good for both business and the consumer. Steve Jobs is full of BS, if he really wanted to charge the same accross Europe then why does he not just bloody do it??
As has been pointed out that was one of the most ignorant posts on the site.
The real problem is that we must be able to order on any EU store, there should be only one store for EU but because of music companies, it's not
Actually, Apple is not the main interest of this investigation. It is just loosely associated through the iTunes store.
Perhaps you better do some research. First of all, the music producers are country dependent. What one country agrees cannot be unilaterally applied to another.
Unfortunately, many erroneously assume that product prices are the same across the European Union. As the linked document show, dead wrong! http://ec.europa.eu/internal_market/...5-price_en.pdf and http://www.europakonsument.at/Europa...ng=EN&id=24575
It is getting closer, but they still vary from country to country.
Do you think that the wholesale pricing might be different between different countries? It wouldn't make sense for Apple to take a loss in one country or to charge a lot more in another to equalize the prices.
Uh, because he would be losing money for Apple... which is not a good thing.
Most of you, and Appleinsider's own reporrt have missed the point. The issue under European rules is not that the price has to be the same in all European markets. It is that there must be free access for all members of the EU to all markets in the EU. This is where the car makers came unstuck because they were trying to stop residents of say France from buying cars in Denmark where because of high local taxes, cars were much cheaper. (the manufacturers were charging a lower price). All that has to happen is that Apple must stop blocking residents in one EU country from buying stuff from the iTunes store in another. Then Apple/ the record labels will be in full compliance.
Regards Isidore
Okay, you all seem to have got the wrong end of the stick here. My post was in response to the actual article you all should have read before commenting on it, in the article it says Steve Jobs would like to see the same pricing model across Europe. I simply responded that nobody is stopping him so why does he not do it?? How can he say he would like something that is in his power to deliver but not do it, that is why he is full of BS.
I snuck in a comment about the EU free trade because someone above me was having a go, I never said that the EU demands equal pricing across member states.
I have been stating in previous posts that the EU demand the freedom to buy goods and services in any member states, this is where Apple are in trouble because they stop people in the UK buying itunes tracks from the french iTunes store and the same for other countries.
I am Irish (part of the EU) i have been working in business in the UK for the last 15 years, i think i understand exactly what the rules are, to call me ignorant is just plain ignorant.
As has been pointed out that was one of the most ignorant posts on the site.
See above, what exactly was ignorant about it? Maybe you should of read the article first and you would see what i was responding to.
What "everybody" are you talking about? This is a purely nonsensical assertion. And you only add to that when you make a sweeping claim such as "Steve Jobs is full of BS."
Actually, if anyone is full of BS..... (you can complete the sentence).
(And, if you use Safari, could you please take the trouble to turn on "check spelling as you type" -- it is under "Edit" and "Spelling." Poor spelling only detracts further from what you are trying to say).
You my friend are a rude, ignorant and complete and utter arsehole, and i refuse to take criticism on spelling from an American, your country have bastardised the English language beyond all recognition.
Most of you, and Appleinsider's own reporrt have missed the point. The issue under European rules is not that the price has to be the same in all European markets. It is that there must be free access for all members of the EU to all markets in the EU. This is where the car makers came unstuck because they were trying to stop residents of say France from buying cars in Denmark where because of high local taxes, cars were much cheaper. (the manufacturers were charging a lower price). All that has to happen is that Apple must stop blocking residents in one EU country from buying stuff from the iTunes store in another. Then Apple/ the record labels will be in full compliance.
Regards Isidore
Excellent summary Isidore. I find it amazing that an international company like Apple (with all their highly paid lawyers) simply doesn't understand a basic tenant of EU trade law. Maybe they know something the rest of us don't. I don't follow these things but even I know about this law.
.. utter *rse****...
For full effect, I prefer the American spelling on that one! The Br. sounds too polite.......
Excellent summary Isidore. I find it amazing that an international company like Apple (with all their highly paid lawyers) simply doesn't understand a basic tenant of EU trade law. Maybe they know something the rest of us don't. I don't follow these things but even I know about this law.
I am not sure about that. I think they fully understand the basic EU tenet, since SJ explicitly says (see story) "We think anybody in Europe should buy off any store." There is nothing ambiguous about that.
The problem is, the record companies -- with some of whom Apple already has a testy/tenuous relationship -- will throw a legal hissy-fit. I am sure Jobs could dare them to do so with a simple software update, but given how marginally profitable the iTunes Store is for Apple (and all the other higher value-added things that Apple's management needs to spend time on), I wonder if they think it's not worth the hassle. At this stage, it is far easier for Apple to say, "put a couple of lawyers on the case in Brussels, and we'll worry about it if/when it becomes a front-burner issue."
I see no no reason to not take SJ fully at his word when he says that he would love to fix this problem. After all, he put his money where his mouth is on the DRM issue; and again similarly on the iPhone credit. A CEO of a $120 billion company does not make casual comments on these sorts of issues, because (s)he risks all sorts of shareholder lawsuits.
Most of you, and Appleinsider's own reporrt have missed the point. The issue under European rules is not that the price has to be the same in all European markets. It is that there must be free access for all members of the EU to all markets in the EU. This is where the car makers came unstuck because they were trying to stop residents of say France from buying cars in Denmark where because of high local taxes, cars were much cheaper. (the manufacturers were charging a lower price). All that has to happen is that Apple must stop blocking residents in one EU country from buying stuff from the iTunes store in another. Then Apple/ the record labels will be in full compliance.
Regards Isidore
Spot on. That's the real issue. Under EU rules there should be free trade of goods across borders so I (in the UK) should be able to buy from a store in Germany. Tax is charged at the local rate for the store btw, not my rate.
Actually, Apple is not the main interest of this investigation. It is just loosely associated through the iTunes store.
Since Apple is the one that is selling the tunes, it's more than loosely associated.
Excellent summary Isidore. I find it amazing that an international company like Apple (with all their highly paid lawyers) simply doesn't understand a basic tenant of EU trade law. Maybe they know something the rest of us don't. I don't follow these things but even I know about this law.
I'm sure they do know the law and possibly they are not breaking it.
Firstly, the only operate ONE itunes store. It's based in Luxembourg where the VAT is the lowest in the EU.
Secondly they technically are allowing sales to any member country from the country they operate in.
Then it gets way more complicated. They're operating in Luxembourg under English laws (not Luxembourg's or even the EU's). They charge VAT at the rate of the purchaser's country, not Luxembourg. They restrict content to local music company distribution deals. They charge different prices for each country which isn't illegal even though they're technically still all in Luxembourg.
Sounds like a right pigs ear of a system.
What's the big deal. This isn't milk or beef or some other staple. A dime or two is hardly enough to matter when buying music is so much easier. Even gas stations selling the same gasoline brand around my neighborhood have high and low prices. If you want gas in your tank, you pay the price.
It's not about the pricing. It is about not being able to buy from any store you want. Europe believes, and rightly so, that you should be able to buy from any store in europe, no matter where you are located.
Apple tried to solve the copyright restrictions, sometimes record company's only have the rights for some but not all european countries, by creating a store per country. Each store only has the songs for which the rights are valid for that country.
Their is no easy solution for this. I think Apple should create a single store with one single price for everybody. The UK has still the pound as currency but they can pay in Euro's without any problems, the credit card company will do the conversion.
They could also sell the songs without rights for that particular country as imports. At a higher price perhaps, but it could be done.
Yes, we have different VAT rates (they can be very different), but that's not different from USA where you have a different rate in every state ? isn't it ?
You are correct, but you missed my point.
In the US, sales tax is always appended to the bill after the fact. So if I live in VA, I must pay VA sales tax on the purchase, no matter where the store is physically located. (The store isn't required to collect the tax if they don't have a point of presence in the buyer's state, but the buyer is still supposed to pay.)
The VAT system used in Europe is a bit different. The tax isn't appended to the price - it's incorporated into the price. So a store in two different countries will have to post different prices, even if their costs and profit margins are the same.
And now we get to a part of the law I don't quite understand. If I live in one EU nation and I make a purchase from a store in another nation, what's the status of the VAT? Do I pay the nation hosting the store, at that nation's rate? Do I pay my own nation at my own nation's rate? Something else?
If it works like sales tax in the US, where you pay your own nation, regardless of the store's location, then each store's server will have to know the VAT rate of each EU nation. When you log in, it will have to recompute the prices based on your account's configured location, in order to collect the correct VAT. I'm not sure how the public would respond to this - if an Italian and a German see different prices posted at the same store, won't that create even worse anger than there is now?
Now, if VAT is owed to the country hosting the store, then Apple's job becomes simple - each store's prices simply reflect that nation's VAT rate. But I would be surprised if that's actually the law, since it would encourage everybody to buy from the nation with the lowest VAT, upsetting all the other nations.
At least that's my understanding of the legal issues that may be involved. Of course, record-label contracts will add even more complexity.
You are correct, but you missed my point.
And now we get to a part of the law I don't quite understand. If I live in one EU nation and I make a purchase from a store in another nation, what's the status of the VAT? Do I pay the nation hosting the store, at that nation's rate? Do I pay my own nation at my own nation's rate? Something else?
Now, if VAT is owed to the country hosting the store, then Apple's job becomes simple - each store's prices simply reflect that nation's VAT rate. But I would be surprised if that's actually the law, since it would encourage everybody to buy from the nation with the lowest VAT, upsetting all the other nations.
If you buy goods from another EU country you pay the VAT that applies in that country, not your own. I recently bought a dishwasher from the UK so I paid the 18% VAT that applies there, not the 21% that applies in Ireland.
This should 'encourage' countries to lower their VAT rates so they are more uniform, but in practical terms, few households (except mine) are going to bother with the hassle of trying to communicate across language barriers and the problems associated with shipping. In practical terms, it is only worth buying really expensive stuff from other member sates because of the extra cost of postage/shipping.
There should be one iTunes store in the EU, everything it sells should be available to everyone in every EU state at the same price and the VAT should be that which applies in the sate where the store is located.
The problem is the Copyright laws that have allowed the record companies to place restrictions on rights and availability. This whole problem stems from that. The simple solution is an EU directive to member states to modify their varying Copyright laws so they are uniform throughout the EU and so they no longer contain aspects which allow copyright holders to engage in restrictive market practices within the EU and so manipulate prices to their maximum benefit.
Before some smart arse pipes in with that being their duty to their shareholders - it is entirely against the more important and overriding principle around which the EU was founded, namely it should operate as a single market. The Copyright laws are antediluvian throwbacks that should be trashed and re-written so companies like Apple don't have this problem in the first place.
Have you noticed that the record companies seem to be too scared to appear - two have dropped out? I think they are scared stiff and don't want to draw attention to the problem I outlined in case it resulted in a solution such as I suggest.
If you buy goods from another EU country you pay the VAT that applies in that country, not your own. ... This should 'encourage' countries to lower their VAT rates so they are more uniform, but in practical terms, few households (except mine) are going to bother with the hassle of trying to communicate across language barriers and the problems associated with shipping. In practical terms, it is only worth buying really expensive stuff from other member sates because of the extra cost of postage/shipping.
Thanks for the information.
In the case of downloaded product (software, music, etc.), these barriers don't really exist. Which means everybody is going to flock to the store hosted where VAT is lowest - upsetting all the other nations, if they want to collect VAT from their own locally-hosted stores. I'm sure this is a factor in the labels' intransigence.
I'm not saying there's anything wrong with consumers flocking to the lowest price - I would do the same thing - but politics and greed is always the first thing in government's mind. Convenience to the consumer is something they only grudgingly consider if the issue is big enough to change the outcome of an election, and even then they usually don't care.
But maybe this lawsuit will, among other things, be the cattle-prod-up-the-nether-regions that the politicians need to actually do something right for a change.