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Wednesday, September 19, 2012, 06:07 pm
Apple, publishers agree to settle EU e-book price-fixing inquiry
Apple and four major publishing houses agree to kill off an e-book price-setting system in the European Union in hopes of ending an antitrust investigation over the matter.The European Commission said on Wednesday that it is willing to drop its probe into an alleged price-fixing scheme by Apple, Simon & Schuster, HarperCollins, Hachette Livre and Verlagsgruppe Georg von Holtzbrinck, after the companies agreed to let online retailer Amazon sell the same e-books at discounted prices for a period of two years. The agreement is currently undergoing peer review, reports The New York Times.
EU flags flying in front of the European Commission's headquarters in Brussels, Belgium. | Source: European Commission
First launched in December 2011, the Commission's inquiry is in related to Apple's so-called "agency model," which allows book publishers to set the prices for e-books sold in the iBookstore under a most favored nations clause, meaning the houses couldn't sell their product elsewhere for a lower price. If the investigation were to have found the companies in violation of European antitrust laws, each faced penalties equaling up to 10 percent of revenue from global sales.
With the settlement, the companies agree to dismantle the most favored nations clause. If the peer review is in favor of the agreement, the Commission said it might work to make the plan legally binding, and in doing so would end the antitrust case without an admission of guilt from the parties.
While Apple and the four publishing houses agreed to the settlement terms, Penguin Group is holding out and remains under investigation.
Wednesday's announcement is similar to the counterpart price-fixing case in the U.S. leveled by the Department of Justice in which HarperCollins, Simon & Schuster and Hachette recently settled for $69 million. Apple, Penguin Group and Macmillan continue to fight the allegations, with both companies asking for a court trial to decide the matter.
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Previous Comments View All
Apple is innocent they will be exonerated, as they were in Europe.
Clearly, you have a special dictionary, in which "capitulation" and "exoneration" mean the same thing...
Did you get it in the App Store, by any chance?
Clearly, you have a special dictionary, in which "capitulation" and "exoneration" mean the same thing...
Did you get it in the App Store, by any chance?
Were they found guilty of price fixing in Europe?
The answer is NO, NON, NEIN, NEI, EI, NE, NEE, NEEN, NÃO.
They made a minor tweak to one clause and kept their existing agreements in place.
For all the talk about how "consumer-oriented" the EU is supposed to be, this just grants Amazon the same virtual monopoly on ebooks that they now have in the US. Bezos and his buddies now have free reign to dictate low-ball deals to authors as well as the potential to require Kindle versions for authors wanting to sell physical books on Amazon's European stores.
it's very bad news for editors and authors.
They need to control THEIR price and to avoid consumers think books should be sell for mostly nothing...
The market is not fine at all with so low price.
Were they found guilty of price fixing in Europe?
The answer is NO, NON, NEIN, NEI, EI, NE, NEE, NEEN, NÃO.
They made a minor tweak to one clause and kept their existing agreements in place.
Well, a settlement like this is just that, a settlement, that has no implication on whether Apple was right or wrong. Nothing to be unhappy about, but nothing to be happy about either. Amazon still got to lower prices for 2 years.
it's very bad news for editors and authors.
They need to control THEIR price and to avoid consumers think books should be sell for mostly nothing...
The market is not fine at all with so low price.
Actually the authors can control their prices. They just have to avoid using those big publishers. You got it all wrong, authors can always just sell the books by printing their own books and negotiate their own contracts with any retailers if they want to control the price. In fact, by using those big publishers, the authors voluntarily give up the rights to control the price.
Done, just time for the other shoe to fall in the US - Regardless The FEDs and EU got what they wanted already, Kill Agency Model as a norm.
Were they found guilty of price fixing in Europe?
The answer is NO, NON, NEIN, NEI, EI, NE, NEE, NEEN, NÃO.
They made a minor tweak to one clause and kept their existing agreements in place.
Didn't say they were innocent neither, if they were then why the settlement?
For all the talk about how "consumer-oriented" the EU is supposed to be, this just grants Amazon the same virtual monopoly on ebooks that they now have in the US. Bezos and his buddies now have free reign to dictate low-ball deals to authors as well as the potential to require Kindle versions for authors wanting to sell physical books on Amazon's European stores.
EU competition laws apply to all companies trading in the EU. If Amazon does something anti-competitive, and someone complains, they will be investigated. Just like Apple, just like Microsoft.
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So they removed the "most favoured nation" clause, which technically is not "price fixing", with no issues over the use of an agency model.
This is different to the US where the DoJ wants to dismantle the entire agency model based contracts.
Apple is innocent they will be exonerated, as they were in Europe.