Let Apple Price its Music

This IHT story shows some really bizarre actions by the European Competition Commission against Apple. The substance of the action is that the commission accused apple of unfairly making British buyers of music from the iTunes stores in the UK to pay a higher price than equivalent consumers in the rest of Europe.

Despite my unqualified enthusiasm for enforcement actions that increase the degree of economic competition, I am not sure that the commission is working in the the interests of the consumers by trying to impose a standard price within the EU countries. Instead, the Commission would be better advised to seek to abolish the requirement that buyers of music must use a payment card that was issued by a bank based in the country from which the purchase is being made.

Considering that music is a now a good being purchased and delivered through the internet and consumers should not be compelled to make purchases from specified sites based in certain countries in the first instance. That restriction is a far greater hindrance to competition that harms consumer interests than the price discrimination that that the commission is sweating about. In a single market, consumers ought to be able to purchase goods using a card issued in any member country.

Even more puzzling is that this complicated situation is the result of different requirements of copyright laws. The story suggests that part of the settlement will lead to the creation of a single market for music. That is what the Commission should have sought in the first place and left the matter of prices alone.