Thursday, December 13, 2012, 08:56 am

EU ends antitrust probe after Apple, publishers agree to let retailers set e-book prices

By Sam Oliver

A European Union antitrust probe into Apple and major publishers was officially ended on Thursday, after regulators accepted a deal from those being investigated.

Apple and four major publishers have agreed to ease pricing restrictions on retailers, such as online e-book seller Amazon.com, for two years. As a result, the EU has ended its antitrust investigation, according to Reuters.

The biggest winner in the settlement is Amazon, which will be able to set prices for e-books as it sees fit. Previously, publishers decided to join with Apple and utilize the "agency model," which allowed the publishers to set their own prices on the iBookstore while Apple took a 30 percent cut of sales.

Publishers then chose to block Amazon and other retailers from selling e-books unless they too chose to adopt the agency model, rather than being able to set their own prices. Publishers felt Amazon's low-margin business model was unfairly forcing lower e-book prices, but regulators in the EU felt the moves violated European antitrust laws.


Last month, it was reported that the EU was expected to accept the e-book settlement proposed by Apple and the publishers. The deal allows Apple and others to avoid fines that could have reached as high as 10 percent of their global sales — which, in Apple's case, would have been $15.6 billion for its 2012 fiscal year.

Apple is joined by Simon & Schuster, HarperCollins, Hachette, and Macmillan in the settlement with the European Commission. Not included in the agreement is Penguin, which remains under investigation, but has offered its own concessions.

The anticipated settlement 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.