Apple and publishers settle ebook pricing investigation with EC

Apple, Simon & Schuster, HarperCollins, Hachette and Macmillan have reached a settlement with the European Commission over the issue of ebook pricing.

Last year the EC opened an investigation into whether the firms had broken EU antitrust rules by engaging in “anti-competitive practices affecting the sale of e-books”.

A number of publishers sell ebooks under the agency pricing model, which sees publishers set the final retail price and pay the retailer a commission, in order to sell through Apple’s iBooks app.

They subsequently extended the model to other retailers including Amazon’s Kindle store in compliance with a Most Favoured Customer clause negotiated with Apple which ensured rivals were never offered better terms than the iPad maker.

The effect of these moves was that titles were generally on sale at the same price through all retailers, minimising opportunities for price competition.

Under today’s settlement, the EC has accepted commitments from Apple and the four publishers to end agency pricing and allow, for a two year period, other retailers to set their own prices and offer discounts and promotions to customers.

In addition the settlement prevents Apple and the publishers from agreeing a new Most Favoured Customer clause for a period of five years.

Joaquin Almunia. Vice President of the European Commission responsible for Competition Policy, said: “These are the commitments we accepted. The alternative would probably have been to impose fines at the end of a long procedure. However this was not the best solution in the case of a nascent and very fast-moving market.

“Accepting these commitments means removing immediately the results of the collusion and restoring normal competitive conditions. This route is the quickest way to bring competition back to this market, to the benefit of all consumers who buy e-books in Europe.”

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