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EU authorities may soon strike a deal with Apple on ebook price fixing investigation

EU regulators might soon accept an offer by Apple and four major book publishers over an anti-trust investigation, according to Reuters. Apple, Simon & Schuster, HarperCollins, Hachette, and Macmillan—as well as Penguin, which is not one of the firms making the offer—are being investigated for conspiring to fix e-book prices at artificially high levels. At issue are two main things: the “agency model” under which publishers, not retailers, set e-book prices (thus allowing them to maintain a minimum price) and “most-favored nation” clauses that prevent publishers from offering their books at a cheaper price to retailers other than Apple (thus preventing Amazon from undercutting Apple).

The European Commission detailed the proposed offer in its Official Journal in September:

For a period of two years, the four publishers will not restrict, limit or impede e-book retailers’ ability to set, alter or reduce retail prices for e-books and/or to offer discounts or promotions.

The deal would put an end to the investigation and help the companies avoid fines, two sources told Reuters. A decision is expected next month. If a deal is made, consumers are likely to benefit from cheaper prices for e-books. Publishers have argued that without deals like the one they struck with Apple, Amazon will be free to undercut all other e-book retailers until it becomes a dominant market player—at which point it would be free to raise the prices again. Regulators, though, seem unconvinced.

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