iTunes downloads in UK to become cheaper

By David Lawsky and Huw Jones

BRUSSELS (Reuters) - British music fans will pay less for downloads from Apple's online iTunes store after Apple Chief Executive Steve Jobs reached a deal with the European Commission.

British consumers have been angry at paying nearly 10 percent more than others in Europe for iTunes content to play on Apple's hugely popular iPods.

Apple will cut prices within six months as "the direct result of talks that have taken place between Steve Jobs and (European Competition Commissioner) Neelie Kroes", Commission spokesman Jonathan Todd said on Wednesday.

The deal, under which the Commission dropped charges against Apple, resolves one of several irritants in the relationship between consumers, Apple and record companies.

Apple said it has had to pay some record companies more for content in Britain and warned it would "reconsider its continuing relationship" with labels that do not lower wholesale prices in Britain to the pan-European level within six months.

"This is likely to further damage Apple's already fractious relationship with the major labels," said Jonathan Arber, an analyst at media consultancy Ovum.

Music companies are quickly moving towards dropping copy protection, known as digital rights management, in part to free themselves from the increasing power of iTunes, he said.

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