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

November 6, 2012
November 6, 2012

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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