In a significant move that would reduce the prices of e-books in European Union territory, the European Commission on the one hand and Apple and Hachette Livre, HarperCollins, Simon and Schuster and Macmillan on the other hand have entered into a settlement.
According to the terms of the settlement, Apple and the four Publishers would cease to restrict the sale of cheap e-books. The Commission has been investigating a suspected concerted practice aimed at raising retail prices for e-books in the European Economic Area on the part of Apple and these Publishers. This practice is in breach of EU antitrust rules and regulations.
According to the Commission, Amazon and other retailers were faced with a suspected concerted and coordinated demand by the four publishers to agree to the so-called agency model, which allows publishers rather than retailers to set the prices of e-books. This coordinated commercial behaviour between competitors is prohibited as per EU laws.
The Commission suspects that this act on the part of Apple and Publishers was part of a global strategy to restrict competition at retail level and achieve higher prices. To settle the case, Apple and the four Publishers offered a range of commitments to the Commission that will include the termination of current agency agreements, and, for two years, giving e-book retailers the freedom to set their own prices for e-books.
Meanwhile, the Commission is still engaged in discussions with a fifth publisher – Penguin’s owner Pearson. 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.