Monday, April 30, 2007

Is Apple Price Discriminating?

European Union, is not only fighting against Intel and Microsoft, but also Apple, over the pricing of their iTune songs. Online shoppers in Europe must download songs in the country that they live in, and prices are different in the European Union's member countries. The commission believes that the arrangement between Apple and record companies put "territorial restrictions" on the sale of music. An example in the article is that one song purchased by a British shopper was 1.17 euros while another shopper was able to buy it for .99 euros. This is a great example of price discrimination in which I believe would be an example of first degree.

9 comments:

BHowell said...

This seems to me to be a perfect example of price discrimination on the surface; someone is being charged more than someone else for the same product. However maybe the shopper in one country has to pay more because there is less of a demand for that type of music in that country, therefore it costs more to sell it there. When you look at car insurance for example, companies can justify that it costs more to insure someone therefore they charge them more. Maybe because the location, technology, or regulations it costs more to sell the songs in that country.

tyler morando said...

This is a great example of price discrimination. I know different countries have different currency values, but why charge customers with the same currency different prices? I guess the demand of the music is more valuable to other people.

Danny Cawley said...

This is definately an example of price discrimination. Apple is attempting to maximize their profits through selling as much of their product as they can at different prices. Since people can afford to pay a higher price in some countries for the songs, then why not charge them those higher prices? The same idea applies with a country that cannot afford that same price. If the people in the weaker country cannot afford and are not willing to pay that higher price then why not sell to them at a lower price so they can still make some profit.

Bai Zepeng said...

Price discrimination happens when people are being charged by different prices on the same thing, or say the things have the same amount of value. The cost of Downloading music from Itunes should roughly cost the same in different members of the European Union, therefore, they should not charge different prices. However, if it was in the case of CD album, then there would be no doubt that it costs different to produce an CD album in different countries depending on technology and paten rights. To sum up, whether Apple is placing discrimination on downloading musics from Itune depends on whether it costs Apple the same for downloading the music in different European memebers.

Morgan K said...

Maybe this price discrimination has to do with a countries ability to pay, rather than a simple price difference. In the U.S, a prime example of this would be the housing market. The average price of what we consider to be a nice home in Appalachia is in the low $100,000's. However, that same home in California would be in the millions of dollars. So, maybe these European countries are applying that to even the smallest of things, when it's only portions of euros at stake.

brianhahn said...

I agree with everyone else that it is price discrimination, but come on, they are just making money, which is a smart thing to do. People who want the music are going to have to cooperate with microsoft and apple so they are going to have to deal with it.

Rob Phillips said...

If apple is selling the same song at different prices then there is no doubt that this is an example of price discrimination... It would be interesting to know if this was an isolated incident or if it happens all the time in europe

Melissa said...

I believe this is an example of price discrimination. Why does one person get to purchase the song for .99 euros and another person has to buy the song at 1.17 euros. I think that everyone should be charged the same amount with downloading any song because they are just trying to make money.

Eric Dowler said...

While this could be price disrimination, an analysis of possible wage differentials and geographical location (costs, etc.) could play a part in the price differenece amongst the European Union.