The competition watchdog is being urged to investigate Apple’s iTunes service over claims that it is over-charging UK music fans by up to 20 per cent.
The Consumers’ Association (CA) said that while iTunes charges UK based customers 79p to download one track, customers in France or Germany have to pay only 99 euro cents - the equivalent of 67p. The US iTunes site charges users 99 US cents (55p) per song.
Apple has denied the charge, saying that UK fans are used to paying higher prices for music and its pricing structure was in line with other British online stores.
iTunes has kickstarted the UK market in legitimate music downloads, selling more than one million tracks since its summer launch, driving fans away from illegal file-sharing websites.
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UK consumers are barred from accessing cheaper iTunes European downloads because they must give a registered address and payment details in either France or Germany.
The CA has written to the Office of Fair Trading (OFT) accusing Apple of a possible violation of EU competition law, under which UK consumers are supposed to enjoy the same benefits of the single market as other citizens in member states.
With sales transacted through credit cards and no shipping costs involved, the CA is asking why there should be a price distinction between European countries.
A Consumers’ Association spokesman said: “There appears to be considerable evidence that the iTunes set-up is prejudiced against the UK public and distorts the very basis of the single market.”
He added: “Residency-based price discrimination frustrates consumer benefits possible under the single market. If the OFT agrees, it will be another example of the rip-off culture that the British public are often victims of.”
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A spokesman for Apple responded: “The underlying economic model in each country has an impact on how we price our track downloads.
“That’s not unusual. Look at the price of CDs in the US versus the UK. We believe the real comparison to be made is with the price of other track downloads in the UK.”
Apple’s pricing structure does not suffer by comparison to its UK rivals. Mycokemusic, which has sold 700,000 downloads this year, offers single tracks at an average price of 99p. But unlike iTunes, Mycokemusic does allow consumers to listen to sample full tracks at 1p per song.
The re-launched Napster website charges users 99p to copy one track on to a CD or MP3 player, while a monthly subscription offers access to 700,000 songs. HMV operates a download site, where fans can download 50 tracks a month for £4.99.
The iTunes Music Store remains the world’s number one music service with over 125 million songs purchased and downloaded to date. But Apple’s success has forced competitors into a round of price-cutting.
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In the United States, Real Networks, a rival company, has slashed the price of songs available through its own service to the equivalent of just 27p. American fans can buy whole albums for £2.72 compared to £7.99 through iTunes, although the price-cut is a temporary offer.
Executives are confident that downloading, once seen as the downfall of the music industry, will actually herald an era of profitability comparable to the late-1980s introduction of the CD.
One UK independent website, Wippit, has been selling discount digital tracks for 29p since April and believes the market will thrive on competition.
A spokesman for the OFT said: “This is an issue we are aware of and we are looking into the complaint from the Consumer’s Association.”