Four major publishers and Apple have reportedly settled a case with European antitrust regulators after negotiations began in September, ending an ongoing row over e-book price fixing.
Apple, along with HarperCollins, Hachette Livre, Verlagsgruppe Georg von Holtzbrinck-owned Macmillan and CBS-owned Simon & Schuster have all agreed to legally binding conditions that would ease pricing restrictions on Amazon and other e-book sellers.
A fifth publisher, Penguin, owned by UK group Pearson, is still under investigation as the publisher 'chose not to offer commitments.' However, the Commission has said that it was still in discussions with the publisher.
The European Commission said in a statement that the companies 'may have contrived to limit retail price competition for e-books in the European Economic Area (EEA), in breach of EU antitrust rules.' In order to address these concerns, the e-book publishers have offered to 'terminate on-going agency agreements and to exclude certain clauses in their agency agreements during the next five years.'
It has taken a year for European antitrust authorities to reach this point after UK trading authorities first raided offices and began investigating on behalf of the EU. Once the EU was involved, allegations were made that Apple and its partner publishers had conspired to restrict competition by fixing the prices of e-books.
The Commission said it would open an antitrust case to investigate whether the publishers were 'helped' by Apple to fix e-book pricing. It is also alleged that the actions could have blocked rivals, such as Amazon, which has a different 'wholesale' pricing model, and ultimately hurt consumers. The publishers also agreed to end a 'most-favored-nation' clause, which allows a retailer to apply a lower retail price for an e-book by another retailer, regardless of the model used by other retailers. This meant that retailers could take a slice of the profits, which could have a knock-on effect to smaller booksellers.
The Commission said in the statement that it was concerned that the switch to these agency contracts 'may have been coordinated between the publishers and Apple, as part of a common strategy aimed at raising retail prices for e-books or preventing the introduction of lower retail prices for e-books on a global scale.' The Commission said it was 'satisfied' that these commitments would 'remedy the identified competition' that Europe's executive body identified.
