The European Commission is investigating whether eBook publishers have broken EU antitrust rules by engaging in “anti-competitive practices affecting the sale of e-books”.
A number of publishers sell beooks 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 February the UK’s Office of Fair Trading announced an investigation into agency pricing. That investigation has now been closed “on grounds of administrative priority” but the OFT “will continue to co-operate closely with the Commission going forward.”
In March Commission officials carried out unannounced inspections at the premises of several eBook publishers.
On Tuesday the Commission released the following statement:
“The European Commission has opened formal antitrust proceedings to investigate whether international publishers Hachette Livre (Lagardère Publishing, France), Harper Collins (News Corp., USA), Simon & Schuster (CBS Corp., USA), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany) have, possibly with the help of Apple, engaged in anti-competitive practices affecting the sale of e-books in the European Economic Area (EEA)1, in breach of EU antitrust rules.
“The opening of proceedings means that the Commission will treat the case as a matter of priority. It does not prejudge the outcome of the investigation.
“The Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition in the EU or in the EEA.
“The Commission is also examining the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books. The Commission has concerns, that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union – TFEU).
“The duration of antitrust investigations depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.”