A Stitch in Haste

A silly, stupid Euro-meme that I thoroughly debunked several months ago has returned to cause mischief in what is an otherwise unmitigated technical and cultural success:

The [U.K.] Office of Fair Trading (OFT) has referred Apple's iTunes service to the European Commission on grounds that it overcharges UK customers.

The move follows a complaint from Which? that iTunes charges UK users 20% more than those in France and Germany.
...
Whereas iTunes customers in the UK have to pay 79p to download a song, those in Germany and France are only charged 99 cents or 68p.

Back in September Apple defended the price differential, saying that "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," an Apple spokesman said. "We believe the real comparison to be made is with the price of other track downloads in the UK."

Ed Averdieck, European sales and marketing director for OD2, which runs music download sites for everyone from HMV to Wanadoo, Tiscali and MTV, said there was no reason why firms should charge UK customers anymore than those on the continent.

"Our retailers charge everyone in Europe the same price, and we believe there should be such a unified pricing policy." he said. "If you look at MSN, for example, it charges 99 cents in the eurozone and 69p in the UK [the same amount]. We believe this is right and that there is no reason why UK consumers should have to pay any more."

Um, no. To recap my earlier post:

The busybodies have it exactly backwards. The very fact that Apple can charge different prices proves that there are different markets. That's the very definition of a "market."

Of course, the real complaint of the busybodies is that Apple ought not to be allowed to charge different prices even though they can. To which the only proper answer is "why not?"

There is nothing intrinsically immoral about price discrimination (i.e., charging different buyers different prices for the same good). In fact, there can be powerful social-utilitarian arguments in favor of allowing it, if you're into that sort of thing (I'm certainly not). In any case, if Apple can extract different prices in different countries, then they have every right to do so, as long as they do not engage in any anti-competitive practices (and exactly what should constitute "anti-competitive" is a whole different violent rant thoughtful post).

The fact pattern has not changed, so my reasoning and conclusion do not change either. Let Apple charge whatever price it wants wherever it wants.

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